Chapter One — 1.1 Background to the Study

Agency Banking has increasingly attracted the attention of researchers, regulators, and practitioners concerned with operational efficiency of banks. This growing interest reflects the recognition that agency banking does not operate in isolation, but interacts with a wider set of institutional and market conditions found within Enugu State.

Within the context of Enugu State, this relationship carries particular significance. Organizations in this setting operate under a distinct combination of economic, regulatory, and market conditions that may amplify or dampen the effect of agency banking on operational efficiency of banks, making a context-specific inquiry both timely and necessary.

1.2 Statement of the Problem

While agency banking is widely discussed in policy and industry circles, empirical evidence on its actual effect on operational efficiency of banks within Enugu State remains sparse and, in places, contradictory. This lack of localized, rigorous evidence makes it difficult for decision-makers to know with confidence whether current approaches to agency banking are helping or hindering operational efficiency of banks — a gap this study sets out to close.

1.3 Objectives of the Study

1. To examine the effect of Agency Banking on operational efficiency of banks in Enugu State.
2. To assess the extent to which agency banking influences operational efficiency of banks within the study area.
3. To identify the challenges associated with agency banking in relation to operational efficiency of banks.
4. To recommend strategies for optimizing agency banking in order to improve operational efficiency of banks.

1.4 Research Questions

1. What is the effect of agency banking on operational efficiency of banks in Enugu State?
2. To what extent does agency banking influence operational efficiency of banks within the study area?
3. What challenges are associated with agency banking in relation to operational efficiency of banks?
4. What strategies can be adopted to optimize agency banking in order to improve operational efficiency of banks?

1.5 Significance of the Study

This study is significant to a range of stakeholders. For policymakers and regulators, the findings offer evidence to guide the design of frameworks that support healthier outcomes around operational efficiency of banks. For managers and practitioners within Enugu State, the study provides practical insight into how agency banking can be better managed. Finally, it contributes to the academic literature on finance / banking by extending existing knowledge into a specific empirical context, and offers a reference point for future researchers.

1.6 Scope of the Study

In terms of scope, this BSc study confines itself to Enugu State, focusing specifically on how agency banking relates to operational efficiency of banks within that setting. Findings are interpreted within these boundaries rather than as universal claims applicable to every organization or market.