More than ever before there is a global concern to entrench financial deepening access to previously ignored areas due to some areas considered economically unviable where majority of the MSEs operate their businesses. There is an increasing need to promote technological and institutional innovation as a means to expand financial system access and usage, including addressing infrastructure weaknesses and empowering business enterprises by developing financial literacy and financial capability programs to bring all people on board and all to participate in economic development of a country, perhaps agent banking will offer a solution to slow pace of individuals enterprise development especially from the rural areas. The uptake of agent banking in Kenya has not been well appreciated by the target beneficiaries who include among others the micro and small enterprises in the rural areas in Kenya who were expected to benefit from this technologically innovative service. In as much as it has been witnessed that there is an increase in penetration of agent banking services clients have not fully made use of the available agents at their localities to cut down on transaction costs occasioned by travelling to traditional branches and also time wasted on queuing for services . It can also be noted that, the banks have not fully taken advantage of agent banking to explore all market segments at a low operating costs. The researcher also identified some of the factors hindering the well functioning of agent banking despite mounting financial literacy training to Equity bank clients. Lack of mobile network services and float, lack of capital, issues of insecurity and fear of robbery. The paper is based on a study conducted to reveal the challenges which are hindering the rural people of Kenya from benefiting from agent banking.
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