NASSAU, BAHAMAS- The Central Bank of The Bahamas is moving to tackle the growing problem of financial exclusion in the Family Islands with a proposed agency banking framework designed to extend basic financial services to underserved communities.
According to a newly released consultation paper from the Central Bank, the initiative aims to address the steady depletion of physical bank branches on islands outside of New Providence and Grand Bahama, where smaller populations have struggled to maintain traditional banking infrastructure. “The challenge to achieving this objective is the archipelagic construct of The Bahamas,” the Bank noted. “Residents of these islands have in some cases been categorised as ‘unbanked’ and ‘underserved’, in so far as access is concerned.”
Under the proposed model, banks and credit unions licensed and supervised by the Central Bank would be permitted to partner with authorised non-bank entities to offer a defined set of financial services. These agents—typically retail businesses or payment service providers—would serve as customer touchpoints for services such as deposits, withdrawals, bill payments, and other basic transactions.
This approach mirrors successful examples in other jurisdictions. The consultation paper points to Jamaica, where agency banking has expanded significantly since 2016, and to Latin American countries like Brazil and Mexico that have achieved notable improvements in financial inclusion through similar frameworks. In South Africa, agency banking enabled major banks to partner with retail chains, allowing 35 percent of the adult population to access services in 2021—more than double the reach of traditional bank branches and mobile apps.
In The Bahamas, the Central Bank is also seeking to ensure that agency banking is fully integrated with the SandDollar, the country’s central bank digital currency. “Agency platforms and services [must] satisfy and maintain full interoperability with SandDollar,” the Bank stated, adding that the model is intended to support inclusive access, reduce service delivery costs, and bolster transactional efficiency across the financial system.
The Bank also envisions that the framework could empower small and medium-sized enterprises, particularly those in the Family Islands, by enabling them to serve as agents or sub-agents. This would allow these businesses to deliver services on behalf of financial institutions, provided they meet rigorous due diligence standards. Agents and their sub-agents would be held to strict anti-money laundering and compliance requirements, with licensed financial institutions maintaining ultimate regulatory accountability.
As part of the consultation, the Central Bank has invited feedback on a range of key policy questions, including whether the Post Office Savings Bank and existing e-wallet providers should be allowed to offer agency services, and what universal mandates agency banking platforms should satisfy beyond interoperability with SandDollar.
While the initiative offers the promise of greater inclusion, the Central Bank acknowledged the importance of a balanced approach: “Critical to this delicate balance is ensuring that all stakeholders, both as service providers and users, continue to demonstrate confidence in the sector’s ability to allow continued access to financial products and services with minimal… disruption.”
