The goal of the study was to assess the influence of agency banking on the financial deepening of the Kenyan financial sector. The specific objectives included; determining the influence of the number of agents facilitating agency banking on the financial depth; determining the influence of the number of agency banking transactions on financial deepening and determining the influence of these transactions on financial deepening. A descriptive research design was employed to evaluate the objectives. The study targeted the entire financial sector, which comprises 43 commercial banks and 24 microfinance institutions. Data was gathered from the Central Bank of Kenya reports over the period 2011-2020 and analyzed using Statistical Package for Social Scientists. The period was considered because data on agency banking before 2011 was not readily available. Descriptive statistics and multiple linear regression were used. The results revealed that the number of agents, the number banking transactions conducted through agency banking and value of agency banking transactions had a significant and positive effect on financial deepening of the Kenyan financial sector. In particular, the regression estimations showed that a unit increase in the number of agents would increase financial deepening by a factor of 5.71; a unit increase in the number of agency banking transactions would enhance financial deepening by a factor of 3.13 and a unit increase in the value of agency banking transactions would improve financial depth by a factor of 0.493. In sum, the results revealed that agency banking exerts a positive and significant influence on the financial depth of Kenyan financial sector. In light of these findings, it was concluded that the presence of agency banking in Kenya is noticeable and is playing its role in enhancing access of financial services. This study suggests a number of recommendations that can be implemented to foster the expansion of agency banking such as ; conducive political regulatory framework, development of financial literacy programs and development of prerequisite infrastructure.

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