Kenya has a wide and growing network of banks which offer the full range of banking and financial services. This sector has experienced increased competition over the last few years as a result of increased innovations among the players and new entrants into the market. The Banking Industry has been very proactive in increasing customer numbers has made efforts to reach to traditionally unbanked sectors of society with specially tailored banking products.

In addition to banks, there are several mortgage finance companies and deposit taking microfinance institutions that provide certain financial and banking products to their customers. In 2019, the Kenya Mortgage Refinancing Company was established to support the Country’s affordable housing agenda by providing secure, long-term funding to the mortgage lenders, thereby increasing the availability and affordability of mortgage loans to Kenyans.

The Central Bank of Kenya is Kenya’s central bank and formulates and implements monetary policy and fostering the liquidity, solvency and proper functioning of Kenya’s financial system. It also supervises banks in Kenya and formulates and implements policies to promote efficient payment, clearing and settlement systems.

The banking industry is governed by the Companies Act, the Banking Act, the Central Bank of Kenya Act and various Prudential Guidelines issued by the Central Bank of Kenya.

A license from the Central Bank of Kenya is required to operate a banking business in Kenya. There are certain minimum requirements stipulated for the issuance of a banking license. These include the minimum capital requirement and the requirement that directors, chief executive officers and significant shareholders be fit and proper. The Central Bank of Kenya placed a moratorium licensing of new banks in November 2015 following incidences of fraud and mismanagement in the banking sector. This has yet to be lifted.

Banks in Kenya have to comply with ‘Know Your Customer (KYC)’ requirements as highlighted below.

Anti-Money Laundering

Financial institutions as well as other designated non-financial institutions (including auditors, NGOs and real estate agencies) have been classified as reporting institutions, and they have an obligation of verifying the true identity of all their clients. They are also required to monitor all complex, unusual, suspicious, or large transactions and report any suspicious transactions. All transactions exceeding USD 10,000 should be reported whether they are suspicious or not.

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