BMI View: Kenya is a regional leader in commercial banking with a high level of complexity andsophistication, but the sector is set for restructuring through liquidations and mergers brought about bypoor governance that led to the liquidation of three banks over the past two years as well as a decliningclient base and declining asset quality. Mobile money is rapidly increasing access to electronic financialservices and financial inclusion is high. Mobile platforms are also being used to offer insurance, loans andfrom 2017 to purchase government bonds. While there are significant short-term challenges to growthcaused by an interest rate cap, slower economic growth and the collapse of banks beset by poorgovernance, Kenya possesses significant growth opportunities. As such, banking assets and insurancepremiums will grow above the economic trend over the medium-term.
Latest Trends & Developments
Regulatory reform will see the Insurance Regulatory Authority (IRA) and the Capital Markets Authority(CMA) merged with the Sacco Societies Regulatory Authority (SASRA) and the Retirement BenefitsAuthority (RBA) to form a new Financial Services Authority. A bill was approved by cabinet in April2017 and will go through legislative approval. The aim is to strengthen dispute resolution mechanismsthat are already established in law and therefore improves consumer protection.