Strategic Expansion: Kenyan Banks Eye 100+ Branches in Digital Age

A notable trend is emerging within Kenya's banking sector: a concerted push by several lenders to expand their physical branch networks, with many targeting the coveted '100-plus branch club.' This expansion unfolds even as customers increasingly embrace digital channels for their day-to-day banking needs, signaling a strategic re-evaluation of the role of brick-and-mortar outlets beyond mere transactional points.

NCBA Bank Kenya recently cemented its place in this exclusive group, crossing the 100-branch threshold in May 2025 with new locations in Tatu City and Nord Mall, Ruiru. Following closely is Family Bank, currently operating 97 branches, which has announced plans to open an Upper Hill outlet this week, aiming to hit the 100-mark before the close of the year. Nancy Njau, Family Bank's chief executive, emphasized the importance of proximity: “We need to be closer to our customers.” While acknowledging that 92 percent of their transactions are digital, Njau highlighted the strategic imperative of a physical presence, particularly in areas with a high concentration of Micro, Small, and Medium Enterprises (MSMEs), which constitute a core market for the Nairobi Securities Exchange-listed lender.

This drive for a wider physical footprint extends beyond Family Bank. Diamond Trust Bank (DTB) has grown its network to 92 branches from 84 in the last two years, with further expansion anticipated. Among the largest players, KCB, Equity, and Co-operative Bank continue to lead with 223, 222, and 218 branches respectively, all having recorded substantial growth. Co-op Bank, in particular, has seen the most significant increase among the top three, expanding from 171 branches in 2024. Mid-sized lenders like I&M Bank and Sidian Bank are also aggressively expanding, with I&M growing from 41 to 73 branches under its iMara 3.0 strategy and targeting 100, while Sidian Bank has increased its presence from 44 to 60 outlets. This widespread expansion reflects a strategic effort to capture the burgeoning SME market in rapidly urbanizing areas and new commercial hubs across Kenya, such as Ruiru, Kikuyu, Thika, and Naivasha, where businesses require hands-on support for working capital, asset finance, and trade finance.

The evolving function of bank branches lies at the heart of this expansion. No longer solely cash and cheque transaction centers, they are transforming into advisory and relationship management hubs. Lenders are leveraging these physical spaces to offer personalized guidance on investments, borrowing, insurance, wealth management, and complex business financing. This advisory role is particularly critical for MSMEs, where lending decisions often hinge on a nuanced understanding of a business's operations, cash flows, and growth potential – interactions that benefit significantly from face-to-face engagement and build crucial trust.

This continued investment in physical infrastructure occurs against a backdrop of accelerating digital adoption. Mobile money, banking applications, internet banking, and agency networks have streamlined routine transactions, reducing the need for branch visits for activities like low-value loans, transfers, and bill payments. Banks are increasingly adopting a multi-channel model, utilizing digital platforms for high-volume, low-value transactions while reserving branches for intricate interactions, strategic advisory services, and customer acquisition. This approach ensures that while digital convenience is paramount, the human touch remains available for complex financial needs and relationship building.

However, not all institutions are following the same trajectory. Some banks have opted to consolidate their physical presence; Absa Bank Kenya, for instance, has reduced its network from 107 branches in 2024 to 91 this year, while SBM Bank Kenya and Stanbic Bank have also seen modest reductions. Yet, even among these, there's a nuanced strategy. SBM Bank, after an initial reduction, recently opened its 34th branch in Nanyuki, targeting specific high-growth sectors like conservancies, horticulture, and local SMEs. Bhartesh Shah, CEO at SBM Bank Kenya, articulated this targeted approach: “Nanyuki is exactly the kind of market our strategy is built for. The region is a high-growth economy where relationship banking and digital convenience should work together.”

For Kenya and the broader East African region, this dual strategy of digital innovation coupled with strategic physical expansion is vital. It underscores banks' commitment to financial inclusion by reaching diverse customer segments, from digitally savvy urban populations to entrepreneurs in emerging commercial centers who value personalized advice. This multi-channel approach is crucial for supporting MSME growth, which forms the backbone of the region's economy, and for navigating varying levels of digital literacy across the populace. This report draws insights initially published by Business Daily.