The number of automated teller machines (ATMs) decreased by 62 or 2.3 per cent to 2,656 by last December from 2,718 a year earlier.
Central Bank of Kenya (CBK) said the drop was driven by adoption of cost effective channels such as the use of mobile and agency banking.
Among lenders that have announced plans to cut ATMs is Equity Bank #ticker:EQTY. The lender has been shifting customers to alternative channels.
Equity recently said it had so far closed 11 ATM lobbies, each of which had multiple cash dispensing machines.
Equity chief executive James Mwangi reckons that while ATMs require upfront capital investments to acquire the machines and lease space, yet depreciate at 20 per cent annually, agency and mobile banking have no such commitments.
According to the CBK data, by December 2016, 18 commercial banks and five microfinance banks (MFBs) had contracted 53,833 and 2,068 agents, respectively, spread across the country.
This was in comparison with the previous year when the number of agents contracted by commercial banks and MFBs were 40,592 and 1,154 respectively.
The change implies a 33 per cent (increase by 13,241 agents) and 79 per cent (increase by 914 agents) growth of number of agents contracted by commercial banks and microfinance banks, respectively.
“Over 87 per cent of the approved commercial bank agents were concentrated in three banks with the largest physical branch presence namely; Equity Bank Ltd with 25,428 agents, Kenya Commercial Bank Ltd #ticker:KCB with 12,883 and Co-operative Bank Ltd #ticker:COOP with 8,856,” said CBK.