Kenya has one of the largest Financial Services Sectors in Africa and the largest in Eastern Africa.
Financial Services in Kenya
Kenya has one of the largest Financial Services Sectors in Africa and the largest in Eastern
Africa. Foreign investors in the equity market rose from 0% in 2004 to 28% in December 2010
and 42% in January 2011.
The Kenyan banking sector comprises of 43 commercial banks, 1 mortgage finance company, 6
deposit taking microfinance institution and 3 representative offices of foreign banks, 121 foreign
exchange bureaus and 2 credit reference bureaus. At the end of the 3rd quarter of 2011, the size
of assets in the banking sector stood at Ksh 2 trillion, loans & advances were Ksh 1.2 trillion
while deposits Ksh 1.5 trillion. The profit before tax was Ksh 65.5 billion. About a fifth of the
population currently have access to formal banking services. However, this gap will be bridged
by the expansion of microfinance institutions and introduction of innovative services such as
mobile and agency banking.
In 2010, substantive progress was made in the integration process of the East African
Community (EAC) Common Market. The EAC Monetary Policy Committee, which includes the
EAC Central Banks, also commenced work on the interlinking of the EAC payment systems.
Connecting EAC payment systems will make it easier to invest and trade in securities listed on
the exchanges across the region.
The Nairobi Securities Exchange (NSE) witnessed significant growth since 2003/4 when
confidence started to build in the Kenyan market as a result of political change. The value of
shares traded on the NSE increased 189% to Ksh110 Billion in 2010, from Ksh38 Billion in
2009. Equity market liquidity was 9.5% in 2010 compared to 7.9% in 2005. Market
capitalization increased from Ksh463 Billion in 2005 to Ksh1,194 billion in Feb 2011, an
increase of 158%. In the same period, Bond market liquidity was 96.6% compared to 6.5% in
2005. The face value of bonds listed on the NSE increased from Ksh 209 Billion in 2005 to Ksh
500 Billion in Feb 2011, an increase of 139.0%.
ξ The World Bank (WB) has committed USD$ 70 million towards supporting integration
efforts in the EAC region. A key pillar of the WB focus is with regard to supporting
capacity building and financial market infrastructure projects. In order to position the
markets alongside these efforts, this year East African Securities Exchanges Association
(EASEA) members will be preparing the EASEA Strategic Plan (2011 -2013). As a result,
opportunities exist for companies to provide a number of products and services from
advisory and capacity building to technical support.
ξ The NSE has entered into a partnership with FTSE International to introduce FTSE/NSE
branded equity and bond indexes. The FTSE International partnership will compliment the
NSE’s push to boost its brand amongst international investors. In addition, this provides an
opportunity for London Financial Services Sector players to create a platform for greater
linkages across various services.
ξ Other opportunities include global depository receipts, trading and settlement
infrastructure, registrar services and bond market development.
ξ Payment over the mobile platform is significant growth sector in Kenya and innovation
around this area yields significant opportunities for various mobile applications and
Latest export opportunities – Financial & Professional Services
Latest export opportunities - Kenya
Getting into the market
The principal types of business enterprises in Kenya are:
1. Registered Companies (Private and Public)
2. Branch offices of companies registered outside Kenya
4. Sole Proprietorships
Companies are registered as limited liability companies as in 1 and 2 above, and regulated by the
Companies Act (Cap 486). Kenya's legal system is based on English law and practice. A wide
range of legal services are locally available.
It is advisable to quote amounts in Kenya Shillings so as to avoid losses that may occur through
exchange rate fluctuations. Providing quotes in dollars for foreign products is used but to a
limited extent. Credit is an important feature of the market and all common forms of arranging
payment are in use in Kenya. The most common payment cycle is 90 or 120 days. Extended
credit terms for large items of capital equipment are often critical to the success of a project. The
best method of payment is a confirmed irrevocable letter of credit drawn on a reputable bank.
Companies need a number of documents to set up in Kenya, including: Certificate of
Registration; Company PIN Number; VAT Number. UKTI Kenya can advise on this. It is also
essential to obtain/issue receipts and invoices whenever transacting to avoid potential disputes.
There is no restriction on repatriation of funds/profits under Foreign Investment Protection Act.
In addition, there are no foreign currency restrictions and the exchange rate is driven by market
More about doing business in Kenya
Market intelligence is critical when doing business overseas, and UKTI can provide bespoke
market research and support during overseas visits though our chargeable Overseas Market
Introduction Service (OMIS).
To commission research or for general advice about the market, get in touch with our specialists
in country - or contact your local international trade team.
ξ Greg Gibson, British High Commission, Nairobi. Tel: +254 (0)20 2844 291 or email:
ξ Dennis Keya, British High Commission, Nairobi. Tel: +254 (0)20 2844 289 or email:
Contact your local international trade team
AITEC Banking & Mobile Money COMESA 2012
Date: 7 – 8 March 2012
Website address: http://aitecafrica.com
Africa Mobile Money Research (AMMREC) 2012
5 – 6 April 2012
Website address: http://conferences.uonbi.ac.ke/index.php/ammrec/index/schedConfs/current
UKTI runs a range of events for exporters, including seminars in the UK, trade missions to
overseas markets and support for attendance at overseas trade shows.
Latest events – Financial & Professional Services
Latest events – Kenya
More about OMIS and other UKTI services for exporters