Four counties hold 55% of all bank branches in Kenya

Four counties account for more than half of all the bank branches in Kenya, revealing the concentration of wealth in a few parts of the country. Data from the Annual Banking Sector Supervision report by the Central Bank of Kenya (CBK) reveals the four counties — Nairobi, Mombasa, Kiambu and Nakuru — had 819 branches in 2022, out of the 1,475 outlets, which account for 55.5% of total bank branches in Kenya.
The concentration of banks in a few counties highlights the economic inequality experienced in the country where areas away from commercial hubs are underserved by financial institutions. The four counties combined contribute an average of 43.5% to the country’s Gross Domestic Product (GDP), cementing their economic status.
Data from the 2019 population census reveals that the four regions had a combined population of 10.1 million people, representing 21% of the 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%, followed by Central Kenya counties that enjoy their proximity to the capital.
Mombasa had 89.8% and Nakuru at 87.8%.
The data also reveals that commercial banks are back to brick-and-mortar expansion as they reverse a five-year trend of shutting down branches in favour of digital outlets.
Lenders have also leveraged going virtual to cut costs by reducing the number of personnel.
The data shows that bank branches grew by 16 last year, marking the single biggest annual growth in physical outlets since 2016.
The growth to 1,475 from 1,459 branches in 2021 comes at a time banks have been on an overdrive 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 Kisii which shed two branches each.
The move by banks to follow commercial activities rather than population leaves the remaining 43 counties scrambling for the remaining 656 branches.
Tana River and Mandera which have the lowest 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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