This archive report was first published on 2 July 2020.
Kenya's economy has been growing steadily, and the Kenya Deposit Insurance Corporation (KDIC) has taken note. As of today, the corporation has increased the deposit insurance coverage limit from Sh100,000 to Sh500,000.
This move is expected to protect up to 99% of depositors in the unlikely event of a bank failure. KDIC Chief Executive Officer Mohamud Ahmed explained the reasoning behind the increase, saying, "We have increased the limit to reflect the growth in our economy and will give protection to depositors in the unlikely event of a bank failure."
The new limit will cover customers with up to Sh500,000 in deposits, ensuring they recover all their money in the event their lender is liquidated. KDIC has also increased its exposure from Sh294 billion to Sh679 billion, a move that reflects its confidence in the liquidity position of Kenyan banks.
Since the Central Bank of Kenya put several banks under receivership, KDIC has ramped up its mandate. The collapse of Imperial Bank in 2016, following the death of founder Abdulamek Janmohamed, is a notable example of the importance of deposit insurance. The incident locked in billions of shillings in deposits, including those from institutional players.
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