OVERVIEW

Kenya has a well-developed financial sector consisting of the Central Bank, 45 commercial banks, 4 non-bank financial institutions (NBFIs), 2 mortgage finance companies, 4 building societies, 11 insurance companies, 3 re-insurance companies, 6 development finance institutions (DFIs) and building societies. The Government has put in place a policy requiring Non-Bank Financial Institutions to transform their operations into banking institutions. There are 47 foreign exchange bureaus.

These institutions offer a range of quality services countrywide to both foreign and domestic customers. These services include:

• Current accounts;
• Savings and fixed deposit accounts;
• Commercial business and personal loans;
• Safe deposit lockers;
• Purchase and sale of shares and securities;
• Mail and cable fund transfer;
• Exports and imports finance;
• Commercial letters of credit.
• Interest rates are market driven.

Kenya’s financial sector is quite stable owing to a sound financial policy that pursues institutional stability as a major strategy in financial sector development. The Central Bank oversees the operations of both commercial banks and NBFIs to ensure that sound banking practices are observed. In addition, the Central Bank of Kenya administers a Deposit Protection Fund, which protects depositors against financial loss.

Kenya’s Capital Market is developing rapidly. It has one stock market, the Nairobi Stock Exchange with more than 51 listed companies and a capitalisation of about Kshs. 1.31 billion. There are 70 securities including Common Shares, Preferred Shares, and Debt Securities listed on the Stock Exchange. The Capital Markets Authority approves the issue price, the timing of sales and the allotment plan for shares. The Government has also liberalised the Capital Market to allow foreign participation.

FOREIGN BORROWING BY RESIDENTS
Residents can borrow from abroad to finance investment in Kenya, including working capital provided:
The interest rate does not exceed two percentage points above the London Inter-Bank Rate (LIBOR); and,
No guarantee is required from the Government. Aplications outside these terms require the approval of the Central Bank.

Foreign companies can now borrow from the domestic banking system.

REMITTANCE OF FUNDS OUTSIDE KENYA

There are no restrictions on all current account transactions. Residents and non-residents are allowed to freely buy and sell foreign exchange. .

FUTURE POLICY PROSPECTS

The Kenya Government is committed to the reform process and sound macro-economics management. Its future development effort will continue to emphasise the private sector as the principal engine of growth. The Government will focus on the creation of infrastructure complementary to private investment. To maintain a conducive investment environment, the Government will continue to implement further economic reforms to encourage a vibrant and successful private sector to operate in an economy free from constraints and control.

Currency
The Kenyan currency unit is the Shilling divided into 100cents. International credit cards are accepted.
Bills: KShs.5, KShs.10,KShs.20, KShs.50,KShs.100,Kshs.200,KShs.500,Kshs.1000.
Coins: 5cents, 10cents,50 cents,KShs.1,KShs.5, KShs.10,KShs.20.
(KShs.100 = USD 1.250 = EUR 1.25 = JP¥ ) 2002 average

Office hours
Government offices operate on a five-day week while most private businesses are run on a six-day week. The official working hours are 8 a.m. to 5 p.m. on weekdays, with a one-hour lunch break. Sunday is not a working day.