Banks should be made to pay queuing customers

 By MUNGAI KIHANYA

The Sunday Nation

Nairobi,

27 December 2015

On Sat 28th November 2015, Simon Mburu spent 45 minutes queuing at the bank. While on the queue, he wondered how much it was costing him to stand there doing nothing.

He estimates that his income is about Sh1,000 per day. Since he works for eight hours daily, the income lost per hour is Sh125. Therefore, during the 45 minutes he spent on the queue, he wasted about Sh94.

This got him thinking: how much is lost in the entire country by customers waiting in queues in the banking hall? “Kindly review on this comparing the money wasted in terms of time and the money that the bank would spend hiring an extra cashier or two”, he suggests.

I have written about queues in banking hall twice before – in 2006 and 2009. While doing research for the second piece, I came across an interesting article published by “The Consumers” magazine of Finland in 1999. It encouraged customers to start charging their banks for queuing. The proposed rates were 16 Euros per hour (about Sh1,800 today) for personal accounts and 42 Euros (Sh4,700) for business accounts.

But this is not the direction that Simon wants to take. He is concerned about the total money wasted compared to the cost of reducing the queue. I am not sure what benefit will come out that since the two quantities are not connected. That is, a bank does not get a direct monetary gain by having shorter queues.

Nevertheless, let’s work it out. Unfortunately, Simon did not count how many other customers were waiting with him. But in 2006, I found about 80 people in the queue and there were over 150 when I left 90 minutes later. This is typical for that bank even today!

We can justifiably assume that for the six hours that this bank remained open (9am to 3pm), there were 100 customers in the queue at any one time. So, effectively, it kept 100 people standing, doing nothing for six hours. Human resource professionals will call it 600 idle man-hours.

Using Simons average income of Sh125 per hour, it turns out that on that day, the bank wasted about Sh75,000. This is more than enough to pay the monthly salary of one teller!

Of course the 100-people queue is not a daily phenomenon. There are times when there is no queue, so the average waste is probably about half that figure, that is, Sh37,500.

Multiplying this by 20 working day in a month, we get Sh750,000. This is a lot of money, but, like I said, it is NOT a loss to the bank. It is a waste in the economy. For that reason, I would recommend that the Central Bank of Kenya comes up with a rule requiring banks to compensate customers for waiting in the queue. Sh100 per hour is a nice round figure. Only then will banks see a benefit when they reduce the queue.