This archive report was first published on 12 September 2019.
Published on September 12, 2019, a report by the banking industry highlighted the significant contributions of Kenyan banks to the country's sustainable development.
Kenyan banks have been at the forefront of driving and shaping the country's GDP growth through affordable finance, job creation, taxes, and credit access.
One of the key areas where banks have made significant contributions is in job creation. In the 2017/2018 financial year, banks spent Sh39 billion on staff costs, including wages and benefits, to more than 30,000 workers.
Additionally, salaries and wages as a ratio of the bank's income increased to 18.6 per cent in 2017 from 16.9 per cent in 2016.
Related to this, a 6 per cent salary increase for banking sector workers was implemented.
Another significant contribution of banks is in taxes. The National Government has benefited from banks' profitability as tax revenue paid has increased exponentially over the years. In the 2016/17 – 2017/2018 financial years, banks paid more than Sh143 billion to the Kenya Revenue Authority (KRA).
Furthermore, banks have facilitated credit access to households and private sectors, with the total value of outstanding gross loans and advancements increasing by Sh126 billion to Sh2.53 trillion as of September 2018.
Moreover, banks are working to reduce barriers to access to credit/finance for vulnerable groups – women, youth, and persons with disability.
However, the introduction of interest rates controls in 2016 led to reduced lending to Micro, Small, and Medium Enterprises (MSMEs), contributing to a 1.4 per cent drop in GDP growth in 2017.
