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![The closure of millions of inactive accounts is laying bare a structural shift beneath Kenya’s celebrated financial inclusion gains. This closure reveals how tens of millions of low-balance, rarely used accounts had inflated access figures while holding relatively small sums, even as total deposits climbed to about $44.6 billion and became increasingly concentrated in fewer, wealthier customers, raising new questions about the depth of engagement in the banking system, the fate of idle funds that may eventually be transferred to the Unclaimed Financial Assets Authority, and whether the next phase of inclusion will be defined not by opening accounts but by ensuring they are actively used. Banks in Kenya closed 33.8 million inactive accounts in the year to June 2025, cutting nearly a third of total accounts and potentially freezing hundreds of millions of dollars in idle balances, data from the Kenya Deposit Insurance Corporation (KDIC) showed. The closures reduced the number of deposit accounts to 78.7 million from 112.5 million a year earlier, as lenders carried out what they described as a “data cleanup exercise.” “The account clean-up was attributed to the rationalisation of dormant or inactive accounts,” KDIC said in its latest annual report, without mentioning the specific banks. Even small balances add up. A notional balance of about $7.70 in each closed account would amount to roughly $260 million, underscoring the scale of funds tied up in inactive accounts. Banks typically classify accounts as inactive after six to 12 months without customer-initiated transactions and as dormant after a year or more. Restrictions can include halting interest payments, limiting withdrawals and applying maintenance fees. Dormancy is intended to protect customers against fraud and unauthorised access, while funds remain claimable upon reactivation. KDIC said it does not separate deposits by account status. “The corporation does not segregate value of deposits based on active vs dormant since all accounts [dormant and active] are eligible for protection irrespective of the account status,” it said. Accounts that remain dormant for more than five years are transferred to the Unclaimed Financial Assets Authority for safekeeping until claimed. The clean-up offers new insight into account usage in Kenya’s banking sector, where financial inclusion has expanded rapidly. According to the FinAccess Household Survey by FSD Kenya, financial inclusion reached 84.9% in 2024, up from 26.8% in 2006. Despite the sharp drop in account numbers, total deposits rose to about $44.6 billion in the year to June 2025 from roughly $43.1 billion a year earlier, suggesting savings are increasingly concentrated in fewer, larger accounts. KDIC disclosed all the closed accounts held balances below about $3,850, the maximum insured amount per depositor. “Notably, accounts with balances below Sh500,000 decreased by the same number from 111.8 million to 77.9 million, indicating that all the accounts that were dropped fell under this category,” it said. Insured deposits fell to about $6.5 billion from roughly $6.8 billion, while the share of deposits covered declined to 14.38% from 15.69%, below the 20% level recommended by the International Association of Deposit Insurers. The agency is seeking to raise the coverage limit to about $7,700, a move that could improve the proportion of deposits protected.](https://i0.wp.com/impactnews-wire.com/wp-content/uploads/c.png?fit=250%2C150&ssl=1)
