KEPSA WANTS LOCAL BANKS REDUCED FROM 15 TO 38

KEPSA has stated that there is a need for "significant reform within Kenya's banking sector," including reducing the number of banks from the current 38 to around 15. This consolidation, the group said, would help create stronger and more stable financial institutions better able to support business growth.
The forum also criticised what it called “lazy banking”, a practice where banks prefer investing in government securities instead of increasing credit to private businesses. “A strong push was voiced for a transition from ‘lazy banking’ to increasing private sector credit, with a target of 15 per cent from the current one per cent,” KEPSA noted.
The alliance emphasised the need for banks to shift towards lending based on cash flow for small and medium enterprises (SMEs) and startups, rather than relying heavily on collateral. The push comes as growth in loans to private businesses has slowed despite cuts by the Central Bank of Kenya (CBK) to the benchmark lending rate. Elevated interest costs have continued to weigh on borrowing.