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Four counties own 55% of all bank branches in Kenya
Thursday, May 18, 2023
Graphic | Stanislaus Manthey | NMG
Four counties account for more than half of all bank branches in Kenya, revealing the concentration of wealth in a few parts of the country.
Data from the Central Bank of Kenya (CBK) Banking Sector Supervision Annual Report reveals that the four counties – Nairobi, Mombasa, Kiambu and Nakuru – had 819 branches in 2022, out of 1,475 outlets, which represents 55.5 percent of the total banks. branches in Kenya.
The concentration of banks in a few provinces highlights the economic inequality plaguing the country as areas far from commercial centers lack financial services by financial institutions.
The four provinces together contribute 43.5 percent to the country’s GDP, which boosts its economic status.
The 2019 census data reveals that the four regions have a combined population of 10.1 million, representing 21 percent of the population.
The results are consistent with the Financial Inclusion Survey, which showed that these counties were doing well.
Nairobi had the highest inclusion rate at 95 per cent, followed by Kenya’s central provinces which enjoy proximity to the capital.
Mombasa has 89.8% and Nakuru 87.8%.
The data also reveals that commercial banks are back on physical expansion as they reverse a five-year trend of closing branches in favor of digital outlets.
Lenders also benefited from the default shift to cut costs by reducing headcount.
The data shows that branch banks grew by 16 branches last year, recording the single largest annual growth in physical outlets since 2016.
The growth to 1,475 from 1,459 branches in 2021 comes at a time when banks are at a stretch to increase their digital presence over physical units.
Nairobi was the biggest beneficiary of new branches, adding nine units to close the year with 573 branches.
Mombasa lost four to end the year at 108, followed by Isiolo and Casey who gave up two runs each.
Banks’ move to pursue businesses rather than residents leaves the remaining 43 counties scrambling to acquire the remaining 656 branches.
The Tana and Mandera rivers which have the least contribution to the country’s GDP at 0.3 and 0.5 percent respectively also had the smallest number of branches last year of three each.
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