What is Banking?
Banking can be defined as the business activity that involves accepting, safekeeping and management of money by individuals or registered institutions, and then lending (selling the money as credit) to earn a profit from it.
The history of banking cannot be traced to a specific time but there is widespread belief that in the earliest times, seed loaning and safekeeping amongst early farmers could have given birth to all forms that developed into current time banking.
[Infographic: History of Banking In Kenya]
For many years in Kenya, banking was associated with high income earning citizens with majority of the population left un-banked. Banks were developing business models that favored and actually targeted high depositors as opposed to low and middle income earners. This model has changed over the years and the early 21 century has witnessed a great shift in the banking sector’s target market.
Why You Need A Bank Account
1. Security
In Kenya, many people, both low and high income earners have been known to keep a lot of cash in the houses, something commonly known as ‘mattress banking’. This is risky as homes could be robbed, destroyed in fire, floods or even losing the money by misplacing it.
Putting money away in any bank licensed under the Banking Act by the Central Bank of Kenya (CBK) is enough security for your money.
2. Convenience
Running a bank account has proven to be a convenient idea since you do not need to carry loads of cash with you when you go shopping, travel or want to do a purchase that needs a lot of money. You can access your money easily and conveniently wherever you are through the ATM or at the many bank branches across the country. The advent of mobile money is also a great convenience since you can withdraw money from your account to your mobile phone from anywhere and then access your money whenever you want to
3. Saving and Investing
When you have a steadily growing income, you’ll want to go beyond running a current account and start saving and investing your money to optimize your future financial situation. As Investopedia puts it, you simply cannot take advantage of the opportunity to earn money in the stock market or earn interest on deposits if you’re not willing to keep your cash anywhere apart from your mattress.
Requirements for Opening a Checking Account
Banks have gone easy on requirements of opening a bank account in the country. The traditional minimum balance has been scrapped on most Current Accounts, making it easy for many people operate accounts. Some of the most common requirements include.
i) Identification Documents (National ID/ Passport)
ii) Passport Photos of account holder(s)
iii) Contact details which include; Phone number, Postal Address, Physical Address
iv) Appointment of next of kin for purposes of claim
One needs to have attained the age of 18 to independently run a bank account.