Country Financial Sector Profilesback

Financial Sector Overview

The Economic Context

Kenya is the largest economy in the East African Community (EAC) with an estimated GDP of USD 71 billion or 45% of the region's GDP. It is also considered a lower middle-income country since 2014, following a 20% upward reassessment of its GDP. Rolled out in 2008, Vision 2030 aimed at addressing the long-term and sustainable development challenges, has promoted long-term investments that have had a positive impact on economic growth prospects and improved living standards. However, despite the significant economic growth in recent years averaging 5.9% since 2010, the country still faces many challenges, including improving the business climate (136th in the World Bank's Doing Business ranking), equitable wealth distribution (Kenya's GINI index gradually dropped from 57.46 in 1992 to 48.51 in 2005), industrialization, professionalization of the agricultural sector (accounting for nearly a third of Kenya's GDP) and balancing the macroeconomic indicators. The tertiary sector is predominant and accounts for over 50% of GDP, while the agricultural sector engages two-thirds of the active population and contributes less to GDP due to its low productivity. Kenya's economy is still vulnerable to both endogenous and exogenous factors, including fiscal slippages, weather conditions, lower than expected growth in Kenya's major trading partner countries, and uncertainties due to rising interest rates in the United States and the appreciation of the dollar.

Overview of the Financial Sector

In 2017, total financial sector assets represented 85.1% of GDP. The sector has been growing at an average rate of 7.1% since 2013 and total financial assets rose by 7.7% between 2016 and 2017. Sector growth has been driven by strong macroeconomic performance, a changing regulatory environment and increased investment in financial technology (Fintech). Financial inclusion rates continued to improve. The population living within 3 kilometres of access to financial services increased from 59% in 2013 to 77% in 2016. This development was driven primarily by the automation of transactions, with mobile telephony being people’s preferred method to access financial services in Kenya. The Treasury has recently concluded the 2018 Financial Market Behaviour Bill, which addresses systemic credit management in the Kenyan economy.

The Banking Sector

Before 2015, the banking sector was considered a dynamic and highly profitable sector, with returns on equity averaging more than 20%. Since then, however, 3 banks have collapsed, leading to a consumer confidence crisis and fragilization of the sector. This situation deteriorated further after the introduction of the interest rate ceiling in August 2016. Interest rates on bank loans had been limited to 400 basis points (4%) above the reference rate of the Central Bank of Kenya, while savers' deposits were remunerated at a rate of at least 70% of the benchmark rate. While the measure aimed to reduce the cost of credit, one of the direct consequences was a slowdown in lending to the private sector, especially SMEs. In March 2019, the Kenyan Supreme Court declared unconstitutional the decision to cap interest rates, while granting a 12-month moratorium on the revision of the Banking Act by Parliament.

The sector has also been marked by increased adoption of technology and the use of alternative channels that have enabled banks to effectively target the unbanked population. Alternative distribution channels such as mobile banking, internet banking and agent banking services accelerated customer growth.

Structure of the Banking Sector – As of 31 December 2017, the cumulative assets of the banking sector stood at USD 39.5 billion or 49.7% of GDP of the same year. The breakdown of the shareholding structure of the banking sector as of that date was as follows: 3 public banks, representing 3.5% of total assets; 22 private banks with local capital representing 64.8% of total assets; and 15 banks with foreign capital whose assets accounted for 31.7% of the total volume.

Structure of Banking Sector Loans and Deposits - Loans grew at an impressive average rate of 16% between 2011 and 2015, driven by strong economic growth. In 2015, the ratio of private sector credit to Kenya's GDP was 35%, below the sub-Saharan African average of 46% and the global average of 129%. In 2017, deposits and gross lending volume amounted to USD 29.8 billion and USD 21.3 billion, respectively, while non-performing loans represented 12.3% of the gross lending volume. About one-third of non-performing loans were concentrated in the commercial sector, with the majority of loans to Kenyan households (25.11%).

Financial Strength of the Banking Sector - The Kenyan banking sector is sufficiently capitalized. The capital ratio of banks was 18% in June 2018, well above the regulatory requirement of 14.5%. The average liquidity ratio of the banking sector is also well above the regulatory minimum liquidity ratio of 20% (overall liquidity was 48% in June 2018). Moreover, the sector remained profitable despite a drop in profitability due to reduced lending to the private sector, high deposit costs and relatively moderate economic growth in 2017.

The institutional and regulatory regime governing banks has been updated periodically to strengthen the banking sector and bring banking regulations in line with international standards.

The Stock and Capital Markets

Kenya's stock market is driven by the Nairobi Stock Exchange (NSE), which was established in 1954. Its development over the years led to the first privatization of the state's stake in Kenya Commercial Bank (KCB) in 1988, and in 1996, its largest IPO - Kenya Airways - where the Government sold 48% of its shares to more than 110,000 new shareholders. The market capitalization in April 2019 was USD 23.46 billion - or 26.6% of the previous year's GDP - and more than 66 businesses were listed in the same period. The Kenyan stock market is one of the three best performing financial centres on the continent, particularly in terms of access to foreign capital. However, between 2014 and 2018, IPOs on the NSE raised only USD 42 million, which was low compared to countries such as South Africa, Egypt, Morocco, Nigeria, Ghana and Mauritius. Other fundraising activities on the Kenyan stock market raised USD 386 million over the same period. The NSE also demonstrated a major innovation in 2017 by democratizing access to investment in Kenya's stock and financial market through the introduction of M-Akiba. This is a government-issued bond accessible to low- and modest-income persons with mobile phones.

In 2018, more than half (59%) of the region's private equity transactions were conducted in Kenya. Strong economic growth in recent years of around 5%, reinforced by private investor confidence, the Government's medium and long-term strategy and a changing middle class, were important criteria in selecting Kenya as a destination for international investors in East Africa.

Financial Inclusion

Kenya is undoubtedly Africa's, if not the global leader in mobile money services in terms of usage rates, impact on the economy and potential for innovation in the tertiary sector (start-ups and innovative payment systems). As a result of the growth of digital financial services, including mobile banking, the financial inclusion rate in Kenya (based on the criterion of access to financial services within 3 kilometres of a citizen's place of residence) has increased from 59% in 2013 to 77% in 2016.

The Microfinance Sector

The microfinance sector in Kenya has undergone profound changes since the enactment of the “2006 Microfinance Act” in 2008 and has grown by 12%, 184% and 131% in terms of new accounts, deposits and loans, respectively, from 2012 to 2017. The strong growth in deposits and loans contrasts to some extent with the tenfold increase in the number of clients. The disproportionate growth of these three indicators implicitly implies that average credit and deposit levels (per borrower) have risen significantly in recent years, thus illustrating the continuing problem of access to financial services for the extremely poor. Since 2008, 13 licenses have been granted to microfinance banks, of which 5 major stakeholders share 95% of the market sector. The levels of non-performing loans and portfolio at risk have worsened, rising by 394% and 16%, respectively, between 2012 and 2016. This is attributable to the strengthening of regulatory standards, the inadequacy of the financial products and services on offer, as well as the managerial constraints facing microfinance institutions with respect to growth-related challenges. The sector's profitability further declined in 2017, from a loss of USD 3.7 million in 2016 to USD 6.13 million. This decrease was accompanied by a reduction in deposits and loans between 2016 and 2017.

Digital Finance

One of Kenya's key drivers of financial inclusion is the unparalleled success of digital mobile money solutions adopted by the predominantly unbanked population. P2P (person-to-person) interpersonal money transfers are dominated by mobile money, with 42% of those using it for domestic payments for goods and services, and transactions with financial institutions where they hold accounts. Better still, mobile money transfers accounted for nearly half of Kenya's GDP between June 2016 and June 2017; equivalent to $34 billion for one billion transactions over the period under review. Mobile Telephone Operators (MTOs) share the Kenyan market through their mobile money electronic payment platforms, with Safaricom's M-Pesa serving as the pioneer and dominant provider. However, they have recently had to face competition from banks and microfinance institutions, which have gradually deployed mobile payment tools (USSD technology) and interbank platforms (Pesalink). Besides the first generation of financial services (deposits, withdrawals and transfers), second-generation services such as microcredit and microinsurance via mobile money are also being developed.

Savings and Credit Unions

Savings and Credit Unions (SACCOs) in Kenya receive savings from their clients. SACCO assets account for about 10% of all assets of savings-collecting financial institutions. Nevertheless, they provide financial services to more than 4 million Kenyans, about 9% of the country's workforce. SACCOs share their client segment with microfinance institutions to some extent, as they operate mainly in rural and economically marginalized areas. According to the Central Bank of Kenya's 2015 Banking Supervision Report, SACCOs' total loans and deposits amounted to USD 2,511 million and USD 2,374 million, respectively, compared to USD 458 million and USD 405 million for microfinance institutions. This represents a size of its sector equivalent to about 5 times that of microfinance banks. Furthermore, by 2015, the number of savings and credit unions had risen to 177 and their total consolidated assets increased by 13.7% to USD 3.4 billion. The total assets of the banks holding clients' savings increased by 13.7% in 2015 to USD 3.4 billion, while the average interest rates on loans, ranging from 12% to 13.5%, were on average lower than those charged by commercial banks. The number of banks that collected savings from customers increased by an average of 12% in 2015.

Although the growth potential of savings and credit unions remains high in Kenya, particularly in peri-urban and rural areas where they provide alternative to commercial bank under-representation, SACCOs, like microfinance institutions, are affected by the recent offer of mobile banking stakeholders with significant comparative advantages, particularly in terms of financial, logistical and accessibility costs. More specifically, savings and credit unions are exposed to challenges of deviating from their initial targets and objectives, collection risks (due to the ability to be simultaneously a member in several SACCOs), non-coverage by credit bureaux and low entrepreneurial potential of members.


In 2017, the insurance sector in Kenya comprised 52 insurance companies, 4 reinsurance firms, 221 brokerage businesses and 9,348 insurance agents. The sector's gross premiums in 2013 were worth USD 1.24 billion whereas they amounted to USD 2.05 billion in 2017, i.e. an increase of 62% within 5 years; 4.3 million Kenyans hold life insurance or nearly 10% of the total population. Insurance penetration in Kenya is 2.7%, which is considered low compared to the global average of 6.3%. However, compared to the wider East African region, Kenya accounts for about 70% of all insurance products purchased and is among the top 5 largest African insurance markets after South Africa, Morocco, Egypt and Nigeria. Micro-insurance growth has been driven by the sector's technological innovation. Industry investments increased from USD 900 million in 2006 to USD 4.6 billion in 2016. Regulatory reforms were announced by policy makers in July 2017 to take greater advantage of technology to improve access to insurance services and products.

The Pension Fund

The pension scheme or pension funds in Kenya consist of the Civil Service Pension Scheme, the National Social Security Fund (NSSF), occupational schemes and individual pension plans. According to estimates of the Retirements Benefits Authority (RBA), which supervises Kenya's pension funds, pension fund coverage has been estimated at 15% of the workforce. The NSSF covers over a third of pension fund members (compulsory or optional) nationwide, 20% are in the civil service and about 10% contribute to occupational and individual pension schemes.

Total managed assets amounted to USD 8.14 billion in 2015, or more than 10% of GDP in the same year, while they increased by 3.3% between 2014 and 2015. Their allocation to various asset types has contributed to the stability of the financial sector: 30% of managed funds were invested in public debt securities, 23% in listed assets, 19% in real estate, 12% in guaranteed funds, 7% in term deposits, 6% in fixed-income securities and 3% for other types of investments than the above-mentioned. In 2015, pension funds were authorized to invest up to 10% of their portfolios in venture capital funds and seed funds approved by the Capital Markets Authority. According to the sector regulator, pension fund managed assets were expected to increase by nearly USD 2 billion in 2016, reaching USD 10 billion in assets and contributions. To increase pension fund coverage among formal employees and informal economic stakeholders in Kenya, the RBA has initiated an extensive awareness and communication campaign to educate the target audience on the dangers and long-term consequences of not subscribing to a pension scheme. The aim is to increase pension fund coverage by about 5% by 2019.

Contact Details Information of Banks Operating in Kenya in 2018







 P.O Box 38610-00800, Nairobi

 (+245) 20- 4263000                                                           


  P. O. Box 69562-00400 Nairobi

 (+245) 20- 3275000 


 P. O Box 30033 – 00100 Nairobi

 (+245) 20-2248402                                                          


 P. O. Box 30246 - 00100 Nairobi

 (+245) 20-2221414


 Kwame Nkrumah Avenue, (Next to Melcom) Adabraka, PMB 298 AN

 (+245) 20-4254000 


 P. O. Box 43252 -00100 Nairobi

 (+245) 20-2242246  


 P. O. Box 66015-00800 Nairobi

 (+245) 20- 2774000


 P. O. Box 30711 - 00100 Nairobi

 (+245) 20- 2754000 


 P. O. Box 30437-00100 Nairobi

 (+245) 20-2884000


 P. O. Box 51133 - 00200, Nairobi

 (+245) 20-340208


 P. O. Box 48231 - 00100 Nairobi

 (+245) 20-3276000


  P. O. Box 61064-00200 Nairobi

 (+245) 20-2222300


 P. O. Box 30483 - 00100, Nairobi

 (+245) 20-3340401


 P. O. Box 61711 – 00200, Nairobi

 (+245) 20-2849000


 P.O Box 6450-00200, Nairobi

 (+245) 20- 5131300


 P. O Box 49584- 00100 Nairobi 

 (+245) 20-2883000


 P. O. Box 52467-00200, Nairobi

 (+245) 20- 4981000


 P. O. Box 75104-00200, Nairobi 

 (+245) 202262000


 P. O. Box 74145-00200 Nairobi

 (+245) 20- 3252000


 P. O. Box 34886-00100 Nairobi

 (+245) 20-2242348 


 P. O. Box 26219-00100., Nairobi

 (+245) 20-2843000


 P. O. Box 20613 – 00200, Nairobi

 (+245) 20-3284000


  P. O. Box 67681 – 00200, Nairobi

 (+245) 20-2226771   


 P. O. Box 43683 – 00100, Nairobi 

 (+245) 20-2740000


 P. O. Box 30584 – 00100, Nairobi

 (+245) 20-3341172


 P. O. Box 43157 – 00100, Nairobi

 (+245) 20-2226433



 P. O. Box 44905 – 00100, Nairobi

 (+245) 20-2874000


 P.O. Box 30238 – 00100, Nairobi 

 (+245) 20-3221000


  P. O. Box 22741 – 00400, Nairobi

 (+245) 20- 2224238


  P. O. Box 48400 – 00100, Nairobi

 (+245) 20-3270000


  P. O. Box 72866 - 00200 Nairobi

 (+245) 20-2828000


 P. O. Box 44599 - 00100 Nairobi

 (+245) 20-2888000


 P.O BOX 44080-00100, Nairobi

 (+245) 20-2228461


 P. O. Box 14001 -00800 Nairobi

 (+245) 20-4449266


 P. O. Box 41114 - 00100 Nairobi

 (+245) 20-2719499


 P. O. Box 43825 – 00100, Nairobi

 (+245) 20-4203000


 P. O. Box 25363 – 00603, Nairobi

 (+245) 20-3906000


 P. O. Box 72833 - 00200 Nairobi

 (+245) 20-3638000


 P. O. Box 30003 – 00100, Nairobi

 (+245) 20-3293000


 P. O. Box 34353 - 00100 Nairobi

 (+245) 20-2252216


 P. O. Box 34154 - 00100 Nairobi

 (+245) 20- 3612000


 55 Westlands Road The Exchange, 3rd Floor, Nairobi

 (+254) 733630600 


 P. O. Box 47387 - 0100 Nairobi

 (+245) 20-2723120


 P.O. Box 21357 - 00505 – Nairobi

 (+254) 203862811


  P.O. Box 73279-00200 GPO– Nairobi

 (+254) 202711076


  P.O. Box 35699 - 00800 – Nairobi

 (+254) 20 44931000


  P.O. Box 14235 - 00800 – Nairobi

 (+254) 20 3749857 


  P.O. Box 35909, 00200 – Nairobi

 (+254) 204908201


  P.O. Box 1105-00606, Nairobi

 (+254) 202 955 000





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At a Glance

At a Glance Source
Population in thousands (2019): 52573,97
GDP per capita (current US$) 2019 - World Average 10,721.61: 1,816.54
Account (%) age 15+) - (2014 vs 2017): 75% | 82%
Agriculture Orientation Index - Credit (Agriculture, Forestry and Fisheries share of GDP) (2015 vs 2016): 0.13 | 0.12
Financial Inclusion Strategies: n/a
Domestic credit provided by financial sector (% of GDP) 2017: 40.3
Made or received digital payments in the past year (% age 15+) (2014 vs 2017): 69% | 79%
Remittances % of GDP for 2018: 0.030
Mortgage Interest Rate / Mortgage Term (years): 12,4% | 12

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