Kenyan lenders opened new branches in rural counties last year in a bid to expand their branch network and boost their physical presence despite the increasing shift by customers from brick-and-mortar banking to the fast and convenient digital models.
Data from the Central Bank of Kenya (CBK) shows that local banks opened three new branches in the rural counties of Isiolo and Trans Nzoia each and two branches in each of Embu, Kericho, Nyeri and Taita Taveta to increase their brand presence in those counties and cater to customers that still rely on traditional banking for their banking transactions.
The choice of opening new bank branches in these counties also appears strategic as most of them are agricultural-rich areas with major cash crops such as maize, tea and coffee meaning they have high cash circulation.
Stable banking system
Banks also opened a branch in Baringo, Bungoma, Busia, Machakos and Nandi each even as the banking sector regulator noted that the presence of a physical branch network continues to denote a stable and reliable banking system in parts of the work despite the rapid growth of alternative banking channels.
However, the total number of bank branches decreased 2.86 per cent from 1,502 in 2020, to 1,459 in 2021, which translates to a fall of 43 branches with Nairobi registering the highest decline in the number of branches by 33 and Mombasa by nine branches.
“The decrease in bank branches is mainly attributed to closure of branches by some commercial banks due to adoption of alternative delivery channels including agency banking, mobile phone banking, and internet banking,” said CBK.