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The Banking Sector in Kenya
BY Louise Mitchell
Kenya
12 January 2018
R 10 080.00 (ZAR)  
estimated $ 731.44 (USD) *
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The Banking Sector in Kenya


The report on the Kenyan banking industry covers deposit-taking institutions which include other credit granting, lease financing, and loyalty and reward programmes. Kenya’s financial sector is well developed contributing 7% to GDP in 2016, with the banking sub-sector accounting for more than 60% of total assets in the financial services sector between January 2016 and March 2017. With 45 licensed commercial banks, 14 microfinance banks, and eight representative offices of foreign banks serving a population of approximately 50 million people, many analysts believe the country is overbanked.


A World Leader in Mobile Money Technology


Kenya is a world leader in mobile money technology. Innovations such as agent banking, which allows commercial banks and deposit-taking Micro Finance Institutions to engage the services of third party outlets to deliver specified financial services on their behalf, have improved financial inclusion in rural and urban areas. A study by Nielsen on Kenyan Retailers and Technology revealed that while the uptake in mobile usage in Kenya, where mobile penetration has reached 96%, has been significant, there still is significant scope for growth in the market, particularly in the retail environment.


Confronted by Numerous Challenges


Economic and regulatory challenges are reflected in the decline in growth of the financial services sector to 4.3% in the second quarter of 2017 compared to 8.1% in the same period in 2016. There are concerns that the financial services system could be jeopardised if fraud allegations against officials of the Central Bank of Kenya are substantiated. Meanwhile the running costs of banks are increasing. IT expenditure continues to grow in order for banks to keep up with regulatory requirements, improve efficiencies, and to increase digital products that will make banking cheaper for customers and improve banking inclusion.


Report Coverage


The detailed report on the Kenyan banking sector describes the current market, the latest regulatory developments and discusses factors influencing the success of the sector. The report profiles 34 companies active in the sector, including the five leading banks, Equity Group, Kenya Commercial Bank (KCB), The Co-operative Bank of Kenya, Standard Chartered Bank and Barclays Bank of Kenya. Also profiled are international banks, Bank of India and Citibank NA.


Page
1. INTRODUCTION 1
2. COUNTRY INFORMATION 1
2.1. Geographic Position 2
3. DESCRIPTION OF THE INDUSTRY 3
3.1. Industry Value Chain 7
4. SIZE OF THE INDUSTRY 8
5. STATE OF THE INDUSTRY 18
5.1. Local 18
5.1.1. Corporate Actions 26
5.1.2. Regulations 26
5.1.3. Enterprise Development and Social Economic Development 28
5.2. Continental 30
5.3. International 33
6. INFLUENCING FACTORS 34
6.1. Economic Environment 34
6.2. Terrorism 35
6.3. Financial Inclusion 35
6.4. Rising Operating Costs 37
6.5. Information Technology, Research and Development (R&D) and Innovation 37
6.6. Labour 39
6.7. Cybercrime and Fraud 41
7. COMPETITION 42
7.1. Barriers to Entry 43
8. SWOT ANALYSIS 43
9. OUTLOOK 45
10. INDUSTRY ASSOCIATIONS 45
11. REFERENCES 46
11.1. Publications 46
11.2. Websites 47
APPENDIX 1 48
Current Digital Credit Products in Kenya 48
COMPANY PROFILES 50
AFRICAN BANKING CORPORATION LTD 50
BANK OF AFRICA KENYA LTD 53
BANK OF BARODA (KENYA) LTD 56
BANK OF INDIA 59
BARCLAYS BANK OF KENYA LTD 63
CARITAS MICROFINANCE BANK LTD 70
CENTRAL BANK OF KENYA 72
CITIBANK NA 75
CO-OPERATIVE BANK OF KENYA LTD (THE) 78
COMMERCIAL BANK OF AFRICA LTD 84
DIAMOND TRUST BANK KENYA LTD 88
ECOBANK KENYA LTD 93
EQUITY BANK (KENYA) LTD 96
FAMILY BANK LTD 98
FAULU MICROFINANCE BANK LTD 104
GUARANTY TRUST BANK KENYA LTD 106
GULF AFRICAN BANK LTD 109
HFC LTD 112
I&M BANK LTD 114
KCB GROUP LTD 118
KENYA WOMEN MICROFINANCE BANK LTD 121
NATIONAL BANK OF KENYA LTD 124
NIC BANK LTD 130
PRIME BANK LTD 135
RAFIKI MICROFINANCE BANK LTD 138
REMU MICROFINANCE BANK LTD 141
SIDIAN BANK LTD 143
SMEP MICROFINANCE BANK LTD 145
STANBIC BANK LTD 147
STANDARD CHARTERED BANK KENYA LTD 150
SUMAC MICROFINANCE BANK LTD 155
UBA KENYA BANK LTD 157
UWEZO MICROFINANCE BANK LTD 159
VICTORIA COMMERCIAL BANK LTD 160