Tough times: Bank accounts holding Sh500,000 decline

By Newsflash Writer

The share of Kenyan bank accounts holding more than Sh500,000 fell to 0.65 percent in 2024, underscoring cash flow constraints in a sluggish economy marked by widening income inequality.

Central Bank of Kenya (CBK) data shows that the number of high-value accounts dropped to 739,803 from 742,556 in 2023, when they represented 0.71 percent of total accounts.

The decline highlights how wealth remains concentrated in a small segment of the population. Despite an average GDP growth of 5.0 percent over the past decade, analysts say the benefits have not been evenly distributed. Kenya’s economy expanded by 4.7 percent in 2024, down from 5.7 percent in 2023, weighed down by poor agricultural performance and reduced private-sector lending due to high borrowing costs.

Meanwhile, digital and mobile platforms are driving rapid growth in low-value transactional accounts, as more people opt for mobile banking services that provide convenient access to credit and savings. Many users open multiple mobile accounts, accelerating this shift. “Commercial banks mobilised for more account opening supported by the use of digital platforms,” the CBK noted in its 2024 bank supervision report. KCB and NCBA dominate the market, holding 53.69 million and 33.09 million deposit accounts respectively, accounting for 76 percent of industry total.

Top lenders hold most quality deposits

Equity Bank led in accounts exceeding Sh500,000 with 131,916, followed by KCB with 120,317 and Co-operative Bank with 87,556. Some mid- and lower-tier lenders had a higher share of wealthy accounts relative to their total accounts due to targeting niche clients. Citibank Kenya topped this category, with 61 percent of its 2,318 accounts above the half-million mark, followed by Victoria Commercial Bank at 55 percent of 8,250 accounts, and Bank of India at 48 percent of 12,505 accounts.

The Sh500,000 threshold is also the maximum refundable deposit in case of a bank collapse under the Kenya Deposit Insurance Corporation (KDIC) scheme. KDIC raised this cap from Sh100,000 in 2020, the first increase in 30 years, to restore depositor confidence after the 2015–2016 failures of Dubai Bank, Chase Bank, and Imperial Bank. Funded by a levy on commercial banks, the scheme currently covers 19.4 percent of total sector deposits worth Sh5.48 trillion, slightly below the 20 percent global best practice benchmark.

In 2024, insured deposits fell to Sh1.065 trillion from Sh1.083 trillion in 2023, suggesting that funds in wealthy accounts—beyond the insurance cap—grew over the year. The share was down from 20.6 percent coverage in 2022, when deposits stood at Sh4.76 trillion, reflecting the faster accumulation of savings among the wealthy compared to smaller depositors.