Sharp Daily
No Result
View All Result
Tuesday, June 3, 2025
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
Sharp Daily
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
No Result
View All Result
Sharp Daily
No Result
View All Result
Home News

IMF report spotlights Kenya’s overbanking predicament

Editor SharpDaily by Editor SharpDaily
October 13, 2023
in News
Reading Time: 2 mins read

Kenya, a pioneer in digital banking and financial technology, faces an unconventional challenge in its banking sector.

Despite leading in the adoption of innovative digital banking channels, Kenya grapples with concerns of overbanking. This distinctive situation is highlighted in the 2023 Financial Access Survey from the International Monetary Fund (IMF).

According to the statistics, Kenya has an abundance of Automated Teller Machines (ATMs) and commercial bank branches compared to neighboring countries like Tanzania, Uganda, and Rwanda. For instance, in 2022, Kenya boasted 6.8 ATMs and 4.3 bank branches for every 100,000 people. In contrast, Tanzania had 5.6 ATMs and 2.3 branches for the same population size, with even lower ratios reported in Uganda and Rwanda.

This unique scenario has led to the coining of the term “overbank-ness” within Kenya, reflecting the notably high density of bank branches and ATMs. Nevertheless, Kenya continues to lead in digitization, with 2,176.0 registered mobile money accounts per 1,000 adults and a significant number of mobile money agents at 559.8 agents per 1,000 square kilometers.

RELATEDPOSTS

International Monetary Fund

How Kenya’s move away from IMF Loans could reshape its economic future

May 26, 2025

Digital lending in Kenya: Convenience meets controversy

May 16, 2025

The Central Bank of Kenya (CBK) reported in its Annual Banking Supervision Report for 2022 that there are 39 licensed banks operating in Kenya. While the number of bank branches increased in 2022, particularly in emerging and new growth areas, the count of ATMs decreased. This decline is attributed to the growing adoption of agency, mobile, and digital banking services, signaling Kenya’s active shift towards digital financial platforms.

To address the issue of overbanking, the CBK consistently advocates for mergers and acquisitions in the banking sector. These strategic moves aim not only to reduce the number of licensed banks but also to mitigate risks in the industry.

Recent history shows notable mergers and acquisitions, including Equity Bank’s acquisition of Spire Bank, Co-operative Bank’s acquisition of Jamii Bora Bank, Kenya Commercial Bank (KCB) Group’s takeover of the National Bank of Kenya, and the formation of NCBA through the merger of National Industrial Credit (NIC) and Commercial Bank of Africa (CBA).

Foreign banks have also entered the market, with Egypt’s Commercial International Bank acquiring Mayfair Bank, Nigeria’s Access Bank acquiring Transnational Bank, and Premier Bank in Somalia taking control of First Community Bank.

While these M&A activities often focus on expanding into new regional markets, they also contribute to reducing the number of operational banking branches. Kenyan bank subsidiaries in the region witnessed substantial growth, reaching 552 in 2022, up from 494 in 2021, with the majority located in the Democratic Republic of Congo.

The Governor of the Central Bank of Kenya, Kamau Thugge, has expressed support for mergers and acquisitions as a means to achieve the optimal number of banks in the network. This aligns with the CBK’s goal of consolidating the sector and ensuring the stability and efficiency of the banking industry.

The issue of overbanking in Kenya and the call for mergers and acquisitions are pivotal discussions in the country’s financial landscape. The future of the banking sector is expected to witness further consolidation and strategic alliances as Kenya seeks to strike a balance between financial innovation and the ideal number of banks to serve its expanding economy and tech-savvy population.

Previous Post

Kenya to impose local health insurance requirement for foreign visitors

Next Post

Controversial “degree-less” lawyer gains backing from COTU

Editor SharpDaily

Editor SharpDaily

The latest in business, real estate, education, investments, tech and entrepreneurship, brought to you daily. Reach us through thesharpdaily@gmail.com

Related Posts

News

Co-op Bank posts KES 6.9 billion profit in Q1’2025

May 16, 2025
Agriculture And Economy
News

Lets get Kenya out of FATF list

May 9, 2025
News

The downside of Impact Investing

May 2, 2025
News

Leadership challenges at the University of Nairobi

April 24, 2025
News

Easter eggs and earnings: Growing your nest egg with CMMF

April 16, 2025
News

Geoffrey Ruku declares KES 377M net worth during CS vetting

April 15, 2025

LATEST STORIES

Best investments for Kenyan seniors: Secure, predictable & low-risk

May 30, 2025

Why June is the Secret Sweet Spot for Travel

May 30, 2025

Strategies to elevate more women to corporate leadership

May 30, 2025

Tap on Kenya’s 2025 tech revolution

May 30, 2025

How CURBS supports employers and employees

May 30, 2025

NSE deserves more attention from young investors

May 29, 2025

The silent strain of remote work on Kenya’s urban workforce

May 29, 2025

How Kenya’s crypto bill could reshape the digital economy

May 29, 2025
  • About Us
  • Meet The Team
  • Careers
  • Privacy Policy
  • Terms and Conditions
Email us: editor@thesharpdaily.com

Sharp Daily © 2024

No Result
View All Result
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team

Sharp Daily © 2024