This study examined the ways in which the KCB Mtaani (agency banking) has been used as a competitive strategy at KCB through the enhancement of the financial inclusion within Nakuru County. The need for a competitive strategy was informed by the intense competition in terms of profitability and market share of the different banks. The specific objectives of the study included to examine the cost of banking transactions, to determine the efficiency of agency banking in time saving, to investigate the convenience of banking products and to determine the contribution of Kenya Commercial Bank agency banking to Kenya Commercial Bank’s Customer Base as a competitive strategy. The theoretical framework was based on the financial intermediation theory, Silber’s Constraint Theory of Innovation and Porter’s competitive strategies theory. The research design of the study was the descriptive survey design. A sample size of 236 respondents derived through the Yaro Yamane formula was used. The stratified sampling method was used to get representative sample members from each of the KCB branches. The study also used structured questionnaires as the data collection instruments. The research findings were analysed through SPSS and the results presented in tables. Both descriptive and inferential statistics were used. The descriptive statistics that were used include the frequency distribution and chi square while the inferential statistics included correlation and multiple linear regressions. Correlation analysis results showed that cost(r=0833, α = 0.01), efficiency(r = 0.756 α = 0.01), convenience (r = 0.801 α =0.01) and customer base(r = 0.698 α = 0.01) had positive significant influence on the increase in competitive strategies. Regression results indicated that 63.6% of the changes in competitive strategies could be accounted to changes in cost of banking, efficiency in time saving, convenience and contribution. The study will be of significance to KCB management and CBK for helping the organizations gain insights into the role of agency banking in enhancing competitive advantage. The study found out that Kenya Commercial Bank is a market leader in agency banking and that adoption of agency banking led to increase in geographical coverage area, penetration of the unbanked population and improved customer service. The study recommends the adoption of agency banking as a competitive tool by all commercial banks and that banks should invest in systems and equipment that supports agent transactions and seamless interaction between agent banking systems and the banks main system, the study also recommends that banks should vet their agents properly to ensure that service standards are maintained across all the agent outlets. The study suggested that future researchers should undertake a study on the management perception of agency banking as a competitive tool in other banks and also on effectiveness of agency banking as a competitive tool in the banking industry.
