- The number of banked adults has increased from 26% in 2006 to 83% in 2021.
- CBK data shows bank deposits increased by 9.6% from Sh4.6 trillion in December 2021, to Sh4.9 trillion in December 2022.
The rate at which Kenyans are saving for their future expenses and other basic needs remains low despite a remarkable success in financial inclusion over the past years.
National Treasury PS Chris Kiptoo says Kenya’s saving rate stands at about 12 per cent, against a financial inclusion rate of 84 per cent and a financial access rate of 82.9 per cent.
“Considering the inclusion success, this is quite low. The highest we have ever got is about 15 per cent some few years back,” Kiptoo said.
“Further, the rate is still below Africa’s average mark of at least 17 per cent.”
He spoke on Wednesday during the launch of the inaugural depositors’ insurance conference hosted by the Kenya Deposit Insurance Corporation (KDIC) in Nairobi.
Central Bank of Kenya (CBK’s) deputy governor Susan Koech concurred with his sentiments saying there is need to on-board more adults to the banking space.
“This while recognising the recorded growth, from 26 per cent of adult population who were banked in 2006, to 83 per cent in 2021,” Koech said.
“We need to push the number further, and build a robust saving culture among Kenyans, considering the benefits that come with saving."
She said saving does not only enhance peoples lives, but also addresses day to day challenges such as medical and other social needs.
As one of the strategies to address this, KDIC announced the launch of a web-enabled training module aimed at educating employees of commercial banks, deposit-taking microfinance, and mortgage institutions to foster deposit mobilisation.
“This will help them play a crucial role in mobilisation efforts and instil confidence among members of the public,” said Hellen Chepkwony, CEO at KDIC.
The training scheme is intended to define deposit insurance and explain how it works; identify deposit insurance stakeholders in Kenya; outline the roles and responsibilities of banks and KDIC in protecting depositors’ funds.
It further intends to breakdown the liquidation process of banks in the event of failure.
CBK data shows bank deposits increased by 9.6 per cent from Sh4.6 trillion in December 2021, to Sh4.9 trillion in December 2022, credit to deposit mobilisation through agency banking and mobile phone platforms.
Other key concerns that surfaced during the forum were the collapse of banks, a problem that has shaken the banking sector, making customers sceptical about banking.
Kiptoo said since the 1990s, the country has witnessed the closure of 28 banks, out of which 19 are currently in liquidation under KDIC management.
“To date, KDIC has paid out over Sh93 billion to depositors linked to the failed banks, and still owes Sh91.2 billion to other 95,000 depositors,” he said.