Four Counties Bear 55% of all Bank Branches in Kenya

More than half of Kenya’s bank branches are located in only four counties, highlighting the country’s uneven distribution of wealth.

Out of 1,475 outlets, 819 branches, or 55.5 percent of all bank branches in Kenya, were located in Nairobi, Mombasa, Kiambu, and Nakuru counties, according to data from the Central Bank of Kenya’s (CBK) Annual Banking Sector Supervision report.

The concentration of banks in a small number of counties illustrates the economic inequalities present in the country, where financial institutions are underserved in regions far from commercial centers.

The Gross Domestic Product (GDP) of the four counties as a whole account for an average of 43.5 percent of the national GDP, solidifying their position economically.

According to data from the 2019 census, there were 10.1 million people living in the four areas collectively, or 21% of the total population.

The findings are in line with the financial inclusion survey that showed these counties were doing well.

Nairobi had the highest inclusion rate at 95 percent, followed by Central Kenya counties that enjoy their proximity to the capital.

Mombasa had 89.8% of the population and Nakuru had 87.8%.

The data also shows that commercial banks have reversed a five-year trend of closing branches in favor of online outlets and are once again expanding their brick-and-mortar presence.

By employing fewer people, lenders have used becoming virtual to reduce expenses.

According to the data, bank branches increased by 16 last year, which was the most yearly increase in physical outlets since 2016.

The increase in branches to 1,475 from 1,459 in 2021 occurs at a time when banks are working overtime to strengthen their online presence over physical locations.

Nairobi benefited the most from the opening of new branches, gaining nine units to end the year with 573 branches.

Mombasa lost four branches, bringing its total for the year to 108. Isiolo and Kisii each lost two branches.

The other 43 counties are scrambling to find the remaining 656 branches as a result of banks’ decision to pursue commercial activity rather than population growth.

The two regions with the lowest GDP contributions, Tana River and Mandera, at 0.3 and 0.5 percent, respectively, also had the fewest branches last year, with three each.