The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

AGENCY banking will “not crack the nut” of financial inclusion challenges in remoter Family Island communities, a senior banker asserted yesterday, but provides another “tool in the tool-kit” for improving such access.

Gowon Bowe, Fidelity Bank (Bahamas) chief executive, speaking as the Central Bank prepares to issue its agency banking “guidance note” during the fourth quarter, told Tribune Business this method “opens another avenue” for giving Family Island residents access to financial services in areas where commercial banks no longer maintain a physical presence.

However, he warned that significant education will have to take place so that communities and residents become “comfortable” with the concept and use of agency banking, which would involve Bahamian commercial banks partnering with non-bank businesses - such as food stores, pharmacies and other retailers - to permit and facilitate them providing services such as cash withdrawals and deposits.

Mr Bowe, suggesting that the idea is “novel” for The Bahamas despite it being relatively commonplace in rural areas in developing countries, added that agency tie-ups must also be profitable and commercially viable for both banks and their partners. This, together with consumer acceptance, will determine whether agency banking can solve the financial inclusion and access concerns impacting the less-populated Family Islands.

The Fidelity Bank (Bahamas) chief spoke out after Karen Rolle, the Central Bank’s inspector of banks and trust companies, confirmed in her 2026 third quarter letter to regulated institutions that long-awaited agency banking policy and guidance is set to be released during the current quarter before the 2026 year-end.

She wrote that it “establishes a regulatory framework for the provision of basic financial services through approved agents. The policy guidance permits licensed banks and credit unions to engage eligible non-bank entities, including payment service institutions, money transmission businesses and other approved entities, to provide specified financial services on their behalf,” Ms Rolle wrote.

“The framework establishes eligibility and approval requirements for agents and sub-agents, including non-exclusive agency arrangements, while maintaining the accountability of participating financial institutions for their agents’ activities.”

Mr Bowe, who said Fidelity Bank (Bahamas) presence on Exuma, and soon-to-be Eleuthera operation, incorporates some elements of agency banking, told Tribune Business: “I think, to be perfectly honest, this is just another tool in the tool-kit for addressing remote areas’ access to banking.”

He explained that his BISX-listed institution’s Exuma tie-up with the Cash N’ Go money transmission business is not a pure agency banking relationship but, rather, one where Fidelity has installed a kiosk similar to those found in European and US fast-food restaurants where customers order and pay for their meals using debit and credit cards.

In Exuma, customers use the kiosk to conduct account deposits, withdrawals and chequing transactions and, if cash is involved, this can be picked up from or deposited at Cash N’Go whose role is strictly that of a cash provider. “The Fidelity model is conceptually similar, combines some elements of third party agents, but we’ve kept transaction management in-house,” Mr Bowe said.

“Agency banking is a novel idea in The Bahamas. It’s very common in rural areas areas around the world. It’s going to be very interesting to see how Bahamians will respond to, say, a grocery store effectively being a bank; to walk into a grocery store and say: ‘I want to withdraw or deposit money on my account’.”

Mr Bowe said the Central Bank’s agency banking guidance note will likely be more of a policy document setting out how the service will be regulated and “codify” the procedures institutions and their agents must adopt. He emphasised that “it’s not a mandate that you must engage agency banking”, and individual commercial banks will do their own vetting on potential agents, plus determine via risk management who they partner with and their agreement.

Acknowledging that food stores and other retailers operating as banking agents may take some getting used to for Bahamians, especially when they do not see bank logos on the property’s exterior, the Fidelity chief added: “I think it is going to require a fair amount of education, but it’s only one method of getting to the islands. It’s really only a tool in the tool-kit…

“I’m probably going to sound overly tempered, but it will only be as effective as its environment is accepting of the concept. It’s still a business decision for licensed banks as to who they partner with and, equally, that it be accepted in the community as the equivalent of a bank. Some people may say they don’t want to do their banking business in a food store because there are persons shopping, persons will know my business if they see me putting in or taking money out.

“It’s really going to hinge on how the final agreement looks, how they set-up the agency business, and what’s going to make it commercially viable for agents and banks? The agent is not doing it for free. There’s going to be a fee associated with it. Is the principal [bank] charged that fee, is it going to be passed on? Will it be similar to highly-populated areas that have a bank?” Mr Bowe asked.

“There are a lot of things required before it will have a meaningful impact. This isn’t going to crack the nut, if you will, but this is another avenue being opened to say that if you are accepting of it, and it’s commercially profitable, this is another tool in the tool-kit for banks to provide access to the industry.”

Mr Bowe recalled a recent conversation with an Inagua resident who was “critical” of the island’s sole bank branch, Bank of The Bahamas, suggesting it was still cash, cheque and paper-based reliant with cash having to be flown in from New Providence as opposed to being digital and ATM-based. The resident, who was recently living on Exuma, suggested Fidelity’s model there was well-suited for Inagua and it should be brought to the island.

“We have to continue education with respect to moving away from cash and cheques, and as persons see that they become more comfortable with agency-type services as opposed to full ATM and banking services,” the Fidelity chief added.