Kenya’s unemployment rate stands at 39.1 percent according to stats by the UNDP and the country is the leading in East Africa with the highest number of the unemployed.
Even with the high unemployment rate, various sectors have continued to lay off staff further diminishing the hopes of those still seeking employment opportunities.
The banking sector in Kenya sent home a total of 2,792 employees in 2017 in a move to cut down on their costs in the wake of tough business environment occasioned by the implementation of the interest capping law which was enacted in September 2016.
Commercial banks in Kenya have blamed the interest law on the continuous dwindling of profits in the sector. In 2017, profits in the banking sector went down by 9.6 percent from 147.4 billion shillings to 133.2 billion shillings.
The number of employees in the banking sector in 2017 dropped by 8.3 percent from 33,693 by the end of December 2016 to 30,903 by the end of December 2017.
Although many banks have attributed the laying off of staff on the account of cutting down on costs, some have attributed the move on automation.
Kenyans banks have moved most of their banking services to digital platforms reducing the work of employees in the banking halls. In most banks, 50 to 60 percent of all the transactions are done via mobile.
The Central Bank of Kenya (CBK) does not see the reduction in the number of staff in the sector as a setback. In their supervisory report, the CBK says that the reduction is an ‘indicator of efficiency, consistent with changes in business models and automation.’
According to CBK, commercial banks will continue laying off staff as they continue to embrace the use of technologies such as blockchain as well as artificial intelligence. With these changes, the CBK says the ‘financial technology is expected to continue transforming the banking and customer experience.’