BY BANKERS REPORTER
Of the 19 million bank accounts as at end of June 2021, only about 1.4 million bank accounts had balances above sh10 million shilling according to the Deposit Protection Fund (DPF).
DPF is a government agency mandated to protect all customer deposits across all regulated financial institutions.
According to Julia Oyet, chief executive at DPF, close to 93% of all bank account holders have less than sh1 million shillings in the country.
“In the unfortunate situation that a financial institution closes today, we are able to compensate 98% of all depositors,” she says.
The total number of bank accounts grew by 14.3% to 19.1 million by June 2021 from 16.7million compared to the same period.
The government established the DPF in 2016, following an amendment to the Financial Institutions Act 2004.
DPF is part of financial safety-net arrangements by the government to offer protection to depositors and promote stability of the financial system.
The concept of deposit protection is deposit insurance, meaning all monies deposited across regulated financial institutions are insured up to sh10m.