CBK Data Reveals Poorest Counties Based on Bank Branches
KEY POINTS
The Central Bank of Kenya listed Nairobi, Mombasa, and Kiambu as the richest counties in Kenya based on the number of bank branches in these regions.
The Central Bank of Kenya listed Nairobi, Mombasa, and Kiambu as the richest counties in Kenya based on the number of bank branches in these regions.
CBK data shows that these counties have 794 branches which account for 53 percent of Kenya’s 1,502 banking outlets. This means that over half of the bank branches in the country are found in the three counties.
Nairobi, Kenya’s capital city and the commercial herb is by far still the richest county leading with the highest number of bank branches that account for 39.5 percent of the total outlets.
There still seems to be elements of economic imbalance in the different counties even after the introduction of devolution which was meant to yield equal sharing of resources among the counties.
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Many counties are still lagging probably because they have not attracted investors who have the power to increase wealth in the regions through their investments.
“Banks follow economic growth. As a result, branches are concentrated where the centers of the economy are,” said the NCBA Managing Director John Gachora.
Gachora also added that the banks concentrated in the major cities because this is where they would find the type of corporate clients they need.
According to the Kenya National Bureau of Statistics carried out in 2020, Nairobi was the richest county and contributed 21.7& to the overall country’s GDP followed by Nakuru, Kiambu, and Mombasa.
The regulator reports this year is almost in line with the KNBS data that points out the distinction that makes these counties either wealthy or poor. CBK data on the spread of bank branches matches previous counties’ wealth data from the KNBS.
Mombasa and Kiambu which follow Nairobi closely have other economic activities including tourism, horticulture, agriculture, and other major activities that attract investors.
The report also shows that 20 out of the 47 counties have less than 10 bank branches each, for instance, Samburu, Tana River, and Mandera have only three outlets each.
Other counties such as Kisumu, Nyandarua, Meru, Nakuru, and Kakamega have fewer bank branches despite being popular around the country.
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Bank branches have not registered a big change even though lenders have been deepening both into digital and mobile banking in the last four years.
The rise of mobile banking, however, has been a positive move because it has filled the gap left by mortar and brick apart from allowing the lenders to directly reach their customers.
Mr. Gachora said that financial inclusion in the country has been a success and most people living in rural areas are now able to access mobile banking services.
He added that more branches are likely to be opened will focus tom sales as opposed to service as most services are now available on digital platforms.
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