Why Kenyans Still Wait In Long Banking Lines

The Automated Teller Machine was created in 1939 with dual intentions to offer more convenience for consumers on the go, and to help banking staff manage daily transactions. Forty-five years later, and ATMs in Kenya have done little to help with long queues.

ATMs in Kenya assist 10 million account holders with various banking functions such as cash withdrawals, cash deposits, account transfers, transaction statements and bill payments. Despite the wide range of offerings, Kenyan banks continue to have long queues lined with customers waiting to be helped.

Why are they opting to wait in line when ATMs were installed to expedite banking services?

According to All Africa, Zahid Mustafa, regional consumer banking director at Barclays, explained that the problem can be attributed to a populist directive established over a decade ago. The directive hindered Kenyan banks from adding monthly maintenance fees to the country’s saving accounts.

Banks were left with frustration and no way to profit from saving accounts. Instead of taking away the option of opening a savings account, banks decided on a more devious alternative. In order to drive customers away, many banks decided to not issue ATM cards for savings account customers.

The number of saving accounts in Kenya remains low, and customers are limited to only a few withdrawals per month. Surprisingly, banks still see as many as 50 customers a day with savings account-related transactions. The high number of savings accountholders, in combination with the regular cash and check deposits and transaction requests, lead Kenyan banks to frequently suffer from long customer queues.

In regards to other account holders who still prefer to make cash deposits over-the-counter, All Africa reported this was due to the region’s problem with the quality of currency notes.

Many of the country’s bank notes are in poor shape – some even torn. Trying to deposit worn notes into ATM frequently jams the machines, and will cause transactions to fail. In order to avoid such complications, business owners and consumers often decide it is best to forgo ATM use, and just hop in line.

The problem with poor quality banking notes is not exclusive to Kenya, and is an issue that many regional countries are also dealing with.

Banks have suggested that an alternative solution would be to offer envelope deposits, but have hesitated to do so because of the high fraud risk. Fraud and fake currency is a common problem in Kenyan banks, thus re-introducing envelope deposits are not likely. 

Other banks in the region, such as Barclays Bank, have implemented other solutions to deter long lines, namely taking away ATM fees and offering online banking options. 

To read the full story at All Africa click here.