Bank Customers’ Perception on the Adoption of Agency Banking Services in Dodoma, Tanzania

This study investigates the factors influencing the adoption of agency banking services among bank customers in Dodoma, Tanzania. It specifically examines the effects of perceived transaction costs, convenience, security, and subjective norms on customers’ adoption of agency banking. A quantitative research design was employed, utilizing survey data from 200 bank customers. Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS software was applied to test the hypothesized relationships and to evaluate both the measurement and structural models. The results indicate that greater convenience significantly enhance the likelihood of adopting agency banking. In addition, subjective norms were found to shape customers’ decisions, while perceptions of security strongly influenced their willingness to engage in agency banking. However, perceived transaction cost was found to be statistically insignificant. The study recommends that banks should expand the number of agency outlets to strengthen accessibility, and enhance security measures to safeguard both customer and agent funds. Additionally, banks should leverage subjective norms by strengthening customer awareness campaigns, promoting positive word-of-mouth, and engaging community influencers to shape favorable attitudes toward agency banking, thereby building customer trust and accelerating adoption