With over 200 banks of Kenyan origin already having a presence in the region Kenyan banks seem focussed on capturing the regional market. More than 5 local banks have opted for regional expansion including Equity, Kenya Commercial Bank (KCB), Bank of Africa (BOA), I&M, Fina Bank and NIC Bank. KCB has a presence in Tanzania and is listed on the Dar es Salaam stock exchange. This was part of its growth strategy back in 2008.

Equity Bank has so far opened a total of 186 branches across East Africa. "We are lobbying for sustainable legislation to be enacted in Uganda, Tanzania and South Sudan," said the bank's CEO, Dr James Mwangi. The bank has 38 branches in Uganda, 7 in Rwanda, 4 in South Sudan and 2 in Tanzania. The National Bank of Rwanda has become the first to set up guidelines to facilitate agency banking.

Fina Bank has subsidiaries in Rwanda and Uganda. BOA has 14 branches across the continent including Madagascar and the Ivory Coast.

Regional expansion involves quite a number of hurdles ranging from language barriers to strict regulations. Banks have had problems with South Sudan’s developing infrastructure. Tanzania has also placed a cap on the number of foreign employees that can work at banks that have branches in the region.

According to a report by the CBK, regional expansion has become popular because of its potential to boost productivity and diversify the flow of income.“EAC central banks are harmonising their supervisory rules and practices,” said CBK governor Prof Njuguna Ndung’u earlier this month.

Branching out has led to stiff competition between Kenyan banks in the East African region. Uganda, being Kenya’s top export destination has seen some banks incur losses due to competition. Equity’s Ugandan subsidiary made Ksh600 million worth of losses in 2010. KCB, on the other hand, has moved to link all its branches through a diaspora account. The strategy is expected to encourage regional integration.