Banking Sector Stability, Efficiency, and Outreach in Kenya

Although Kenya's financial system is by far the largest and most developed in East Africa and its stability has improved significantly over the past years, many challenges remain. This paper assesses the stability, efficiency, and outreach of Kenya's banking system, using aggregate, bank-level, and survey data. Banks' asset quality and liquidity positions have improved, making the system more resistant to shocks, and interest rate spreads have declined, in part due to reduction in the overhead costs of foreign banks. Outreach remains limited, but has improved in recent years, driven by mobile payments services in the domestic remittance market. Fostering a level regulatory playing field for all deposit-taking institutions is a key remaining challenge. Specifically, an effective but not overly burdensome framework for regulation and supervision of microfinance institutions and cooperatives is a priority. Maintaining an openness to new, and non-bank, providers of financial services, which has enabled the success of mobile payments, could also further outreach.

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Bibliographic Details
Main Authors: Beck, Thorsten, Cull, Robert, Fuchs, Michael, Getenga, Jared, Gatere, Peter, Randa, John, Trandafir, Mircea
Format: Policy Research Working Paper biblioteca
Language:English
Published: 2010-10-01
Subjects:ACCESS POINTS, ACCESS TO BANKING, ACCESS TO BANKING SERVICES, ACCESS TO FINANCE, ACCESS TO FINANCIAL SERVICES, ACCESS TO LOANS, ACCESS TO SERVICES, ACCOUNTING, ASSET QUALITY, ASSETS RATIO, AUTONOMY, BAD DEBTS, BALANCE SHEETS, BANK ACCESS, BANK BRANCHES, BANK COMPETITION, BANK FAILURE, BANK FAILURES, BANK INDONESIA, BANK PRIVATIZATION, BANK SERVICES, BANKING CRISES, BANKING CRISIS, BANKING INDUSTRY, BANKING REFORM, BANKING SECTOR, BANKING SECTOR ASSETS, BANKING SECTOR EFFICIENCY, BANKING SECTOR STABILITY, BANKING SERVICES, BANKING SYSTEM, BANKING SYSTEMS, BANKS, BOND, BOND MARKETS, BORROWING, CAPITAL ADEQUACY, CAPITAL ADEQUACY RATIOS, CAPITAL FLOWS, CAPITAL REQUIREMENTS, CAPITAL RETURN, CAPITALIZATION, CENTRAL BANK, COMMERCIAL BANK, COMMERCIAL BANKING, COMMERCIAL BANKS, COMPETITIVE MARKET, CONSOLIDATION, CONTRACT ENFORCEMENT, COOPERATIVES, CORPORATE GOVERNANCE, COST OF CREDIT, COUNTRY COMPARISONS, CREDIT REGISTRY, CREDIT RISK, CREDITORS, DEBT, DEBT ISSUANCE, DEBT RECOVERY, DEFAULTS, DELIVERY OF CREDIT, DEPOSIT, DEPOSIT INSURANCE, DEPOSITOR, DEPOSITORS, DEPOSITS, DEVELOPMENT BANK, DISPUTE RESOLUTION, DIVERSIFICATION, DOMESTIC BANKS, EARNINGS, ECONOMIC GROWTH, ECONOMIES OF SCALE, EDUCATIONAL ATTAINMENT, EMERGING ECONOMIES, EMERGING MARKETS, EMPLOYMENT, EQUITY RATIOS, EXCHANGE RATES, EXPENDITURES, EXTERNAL AUDITORS, FINANCES, FINANCIAL CONGLOMERATES, FINANCIAL CRISES, FINANCIAL CRISIS, FINANCIAL DEVELOPMENT, FINANCIAL EXCLUSION, FINANCIAL INFRASTRUCTURE, FINANCIAL INSTITUTION, FINANCIAL INSTITUTIONS, FINANCIAL INTERMEDIATION, FINANCIAL MARKETS, FINANCIAL PRODUCTS, FINANCIAL SAFETY, FINANCIAL SECTOR ASSESSMENT, FINANCIAL SECTOR DEVELOPMENT, FINANCIAL SERVICE, FINANCIAL SERVICES, FINANCIAL STABILITY, FINANCIAL SYSTEM, FINANCIAL SYSTEMS, FISCAL DEFICIT, FOREIGN BANKS, FORMAL BANK, FORMAL BANKING, FORMAL FINANCIAL SERVICES, FRINGE BANKS, GOVERNMENT BANKS, GOVERNMENT DEBT, GOVERNMENT REFORM, GOVERNMENT SECURITIES, HIGH INTEREST RATE, HOLDINGS, HOUSEHOLDS, INFLATION, INFORMAL FINANCE, INFORMAL FINANCIAL INSTITUTIONS, INSTITUTIONAL REFORMS, INSURANCE, INSURANCE COMPANIES, INSURANCE CORPORATION, INSURANCE SERVICE, INSURANCE SERVICES, INTEREST EXPENSE, INTEREST INCOME, INTEREST RATE, INTEREST RATE SPREADS, INTEREST RATES, INTEREST RATES ON LOANS, INTERNATIONAL BANK, INTERNATIONAL CAPITAL, INVESTMENT BANKS, LIQUID ASSETS, LIQUIDATION, LIQUIDITY, LIQUIDITY POSITIONS, LIQUIDITY RATIOS, LOAN, LOAN LOSS PROVISIONS, LOAN PORTFOLIO, LOAN PORTFOLIOS, LOAN REQUESTS, LONG-TERM ASSETS, MACROECONOMIC POLICIES, MACROECONOMIC STABILITY, MANDATES, MARKET DISCIPLINE, MARKET ECONOMY, MARKET SEGMENTATION, MARKET STRUCTURE, MATURITY, MATURITY TRANSFORMATION, MFIS, MICROFINANCE, MICROFINANCE INSTITUTIONS, MIGRATION, MINIMUM CAPITAL REQUIREMENTS, MONEY TRANSFER, NET INTEREST MARGIN, NON-PERFORMING LOAN, NON-PERFORMING LOANS, NONPERFORMING LOANS, NPL, OPERATING COSTS, OPERATING INCOME, OUTREACH, OVERHEAD COSTS, OWNERSHIP STRUCTURE, PAYMENTS SERVICES, PENSIONS, PRIVATE BANKING, PRIVATE BANKS, PRIVATE CREDIT, PRIVATE SECTOR BANKS, PRIVATIZATION, PRIVATIZATIONS, PROFIT MARGIN, PROFIT MARGINS, PROFITABILITY, PRUDENTIAL REQUIREMENTS, PUBLIC ENTERPRISES, REGULATORY AUTHORITY, REGULATORY FRAMEWORK, REGULATORY POLICIES, REMITTANCE, REMITTANCES, RESERVE, RESERVE REQUIREMENT, RESERVE REQUIREMENTS, RESERVES, RETURN ON ASSETS, RETURN ON EQUITY, RISK MANAGEMENT, RISK TAKING, RISK WEIGHTED ASSETS, RURAL ACCESS, RURAL BRANCHES, SAFETY NET, SAVINGS, SAVINGS DEPOSITS, SAVINGS SERVICES, SELF-REGULATION, SHARE OF ASSETS, SHORT-TERM DEPOSITS, SMALL BANKS, STATISTICAL ANALYSIS, STATUTORY REQUIREMENTS, STOCKS, SUPERVISION OF BANKS, SUPERVISORY FRAMEWORK, SUPERVISORY POWERS, TAX, TAX RATE, TIER 1 CAPITAL, TREASURY BILLS, URBAN AREAS, WEALTH CREATION,
Online Access:http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20101006154729
http://hdl.handle.net/10986/3924
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