Banking

The banking sector in Kenya is notably diversified, thanks in large part to the country’s efforts to boost financial inclusion. Kenya’s predominant mobile money platform, M-Pesa, is perhaps the best known example, but other elements of the Kenyan system, such as savings and credit associations, microfinance and agency banking, also underscore the diversity and innovation within the sector. The sector appears to have moved past a period of instability. Widespread defaults are no longer common, and capital raising has left lenders with bigger balance sheets and increasingly robust fundamentals as measured by common prudential ratios. The financial sector overall is now the third largest in sub-Saharan Africa, behind those of South Africa and Nigeria. With more banks establishing themselves in multiple countries, Kenya looks to be on the right side of a growing trend. This chapter contains interviews with Njuguna Ndung’u, Governor, Central Bank of Kenya; Razia Khan, Regional Head of Research for Africa, Standard Chartered; and Habil Olaka, CEO, Kenya Bankers Association.