This study has sought to determine the factors that affect Agent Banking (AB) adoption in United Bank Share Company at Bahirdar and Gonder Area. United Bank S.C. is one of the private commercial banks operating in the country and one of the pioneers in the AB adoption process. Agent Banking is one of bank service delivery channel without opening a physical branch. Though it’s gaining importance especially in developing nation, the extent of AB effectiveness in the financial sector remains largely unknown. AB In seeking understanding of the subject area theoretical and empirical review were made and conceptual model was developed to measure those factors that were identified in the theory. The study employed both qualitative and quantitative survey to assess the factors affecting Agent Banking. A Comprehensive non random sampling method was used for selecting questionnaire respondents. Descriptive statistical tools and reliability test, correlation and linear The findings of the study revealed that the main factors affecting the adoption of agent banking in the bank in a negative way are: technological factors , organizational factors such as the needed attention for the system so that full awareness is created among customers and external Environment factors in the form of transaction limit, lack of sufficient government support and limited infrastructure development. From the findings, it can be recommended that the bank, among others need to pay the required attention to the new technology driven banking delivery system by creating awareness, working in unbanked areas and help agents while they face operational failures and give refreshment training and follow up. The national bank of Ethiopia should also give support to the AB banking service and stand behind it whenever policy interventions are required. In such away, the banking industry can develop customer base expansion, benefit from technology based competition in the form of cost reduction, awareness creation, credibility, security, ease of use, and availability to exploit the untapped potential of this banking product.