How Kenyan Banks Earned Beyond Lending 2024

Timothy Pesi
Apr 17
2 min read

When you think of how banks make money, chances are your mind jumps straight to loans — lending out cash and collecting interest.

Welcome to the world of non-funded income — where banks get paid without giving out loans.

💸 So, What Exactly Is Non-Funded Income?

It’s all the revenue banks earn without issuing loans. Think of it as the “fees and services” side of the business. It includes:

💳 Transaction and ATM fees
🧾 Monthly account maintenance charges
🧠 Advisory and wealth management services
📄 Statement or cheque book issuance
💱 Forex and currency conversion margins

These may seem like small charges — but in the aggregate, they’re anything but.

Why It Matters

When interest rates fall or economic conditions get shaky, banks tend to pull back on lending. That’s where non-funded income becomes a financial lifeline — a reliable, steady stream that cushions profits when the traditional lending engine sputters.

How Kenya’s Top Banks Stack Up

We analyzed how much of each bank’s total income in FY 2024 came from non-funded sources. The results? Some banks are acing the diversification game.

🔍 Key Insights:

🏆 NCBA leads the way with a striking 45% of its income from non-funded streams — thanks in part to its bold moves in digital and mobile banking.
💼 Equity Bank, the heavyweight in absolute non-funded income (Ksh 85.1B), isn’t far behind at 43.9% — proof that scale and smart diversification can go hand in hand.
📉 ABSA , sitting at the bottom with 25.8% and still rely heavily on interest-based income.
🏦 KCB, despite having the highest total income (Ksh 204.9B), gets just 33% from non-funded sources — suggesting room to diversify further.

🧠 What This Means ?

For investors, a strong non-funded income base signals resilience — especially in volatile interest rate environments. It’s a sign that a bank isn’t putting all its eggs in one (loan-shaped) basket.

For consumers, it’s a reminder that even those “minor” bank charges — that Ksh 50 here, that ATM fee there — are a major part of how banks stay profitable.

🚀 Final Thought

In a rapidly changing financial world, the most successful banks won’t just be great lenders. They’ll be agile, diversified, and service-driven — finding smart ways to generate value beyond interest. Because in banking, as in business, the best strategy is not putting all your income in one stream.