In 2018, Kenyan banks put KSh2.1 billion into different corporate social investments such as education, sports, healthcare, and environmental conservation. This is according to data from the 2019 Kenya Banking Industry Shared Value Report released by the Kenya Bankers Association.
Cumulatively for the past 3 years, the banks have spent KSh6.7 billion shillings on Corporate Social Investments (CSI). The top social investment areas for the banks are Education, Health and the Environment.
The Shared Value Report gives a holistic view of how vast the banking sector’s contribution to the country is. The report highlights the impact of the sector to the economy (through loans and taxes to the government), financial inclusion (supporting small businesses, youth and deepening access to finance) and CSI activities in education, health and the environment.
Kenya’s GDP increased by 4.9 per cent and 6.3 per cent in 2017 and 2018 respectively. With banks playing a central role in the economic expansion by providing finance to businesses.
The banking industry has undergone major transformation in the past five years due to changes in technology, geopolitical matters, and societal changes. Even with the shift in the banking sector, the lenders have maintained their positive contribution to the economy through the creation of employment opportunities, supporting diverse initiatives, adding to the national income through taxes, and providing funds to government and businesses.
The lenders paid KSh73 billion in taxes to the Kenya Revenue Authority. Additionally, the financial institutions spent KSh39 billion in employee expenses.
The rate of financial inclusion in the country improved from 41 per cent to 83 per cent of the population between 2009 and 2019 partly due to an efficient banking sector.
Banks suffered a setback with the introduction of the interest rate cap law in September 2016. The law resulted in decreased lending to small and medium-sized businesses. Nonetheless, banks have come up with innovative solutions to provide funds to SMEs.
The lenders are committed to working with the various stakeholders such as the government to continue driving economic growth in Kenya.