Close to 96pc of bank account holders have less than Sh100,000

Only four per cent of Kenyan bank account holders hold deposits exceeding Sh100,000 in their bank accounts.

According to the Kenya Deposit Insurance Corporation (KDIC), 96 per cent of Kenyans hold deposits that are less than Sh100,000 in bank accounts confirming a worrying trend in the country’s saving culture.

“The number of depositors at the moment stands at about 31 million account holders, which includes individuals and entities, with total deposits in these accounts valued at Sh2.5 trillion,” explained Aggrey Bett, KDIC chief executive.

“However, out of this amount, 96 per cent of account holders have less than Sh100,000 in their bank accounts.”

These small depositors who account for 96 per cent of account holders, however, account for just 20 per cent of the entire value of deposits with the remaining 80 per cent of the deposits shared by rich individuals and institutions who only account for only for per cent of the number of accounts held by commercial banks in the country.

Mr Bett further stated that KDIC, which insures deposits in all Kenyan commercial banks, deposit-taking micro lenders and mobile money, has the capacity to pay back, in full, 96 per cent of account holders should their respective banks go under.

“The Act which established KDIC gives us the mandate to insure a maximum of Sh100,000 of a customers’ deposit in any commercial bank or deposit-taking, micro-finance institution so we can pay virtually anyone with our insurance fund,” explained Bett.

He was giving update on the on-going process of liquidating Dubai Bank, which collapsed and has since been closed for gross violation of industry guidelines.

So far, only 600 customers of the collapsed bank have since made claims to their deposits with 400 having been paid out in full.

Dubai Bank had 7,700 customers with deposits reportedly estimated at Sh1.4 billion.

“We are reaching out to the public and asking anybody who had deposits in Dubai Bank to come and claim their money because we would like to compensate all account holders by the end of this year,” explained Bett.

 

Creditors and depositors with more than Sh100,000 in their accounts, however, will have to wait for longer as the KDIC liquidates the assets of the institution to recover the funds.

“The loan book of Dubai Bank was stated at Sh4 billion and we will be seeking to recover this money from the loanees who will be given about 18 months to pay back the money,” he said.

Bett said KDIC is seeking the services of forensic auditors and the Directorate of Criminal Investigations to establish the true value of Dubai Bank.