82.9% Of Adult Population Able To Access Formal Financial Services

Kenya has a total of 38 commercial banks, 1 mortgage finance company, 13 microfinance banks, 9 representative offices of foreign banks, 74 foreign exchange bureaus, 18 money remittance providers, and 3 credit reference bureaus.

Financial inclusion in Kenya has continued to rise, with 82.9 percent of the adult population able to access formal financial services. This has largely been driven by digitization, with Mobile Financial Services (MFS), transfer and lending, rising to be the preferred method to access financial services.

According to Central Bank Annual Report 2019/2020, 67.0 percent of banking transactions were conducted on mobile phones after the onset of the pandemic, compared to 55.0 percent of transactions before the pandemic.

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Despite the number of commercial banks in Kenya reducing to 38, compared to 43 banks 5-years ago. The ratio of the number of banks per 10 million population in Kenya now stands at 7.1x, which is a reduction from 9.0x 5 years ago, demonstrating continued consolidation of the banking sector.

However, despite the ratio improving, Kenya still remains overbanked as the number of banks remains relatively high compared to the population.

The Kenyan banking sector has been growing over the years. The coming of technology, especially the use of mobile has helped in boosting the banking sector and enabling financial inclusion among Kenyans.

On March 27th, 2020, the Central Bank of Kenya provided commercial banks and mortgage finance companies with guidelines on loan reclassification, and provisioning of extended and restructured loans as per Banking Circular No 3 of 2020.

The loan restructuring involves placing moratoriums on both interest and principal payments for three months, in effect giving a reprieve to borrowers who found it difficult to repay their loans due to the impact caused by the pandemic.

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