Market News

Bureaus down to 77 on rivalry from banks

A forex bureau in Nairobi. PHOTO | JEFF ANGOTE
A forex bureau in Nairobi. PHOTO | JEFF ANGOTE  

The number of licensed forex bureaus in Kenya fell to 77 last year from 80 in 2015, the latest Central Bank of Kenya (CBK) report on the financial sector shows.

The bureaus have come under increased competition from banks which are looking for larger commission earnings due to the rate cap on customer loans.

The lenders are more willing now to match the rates offered by the bureaus, having previously been relatively more expensive in currency exchange.

“The number of forex bureaus declined due to voluntary closure of three forex bureaus, conversion of one forex bureau to a money remittance service provider and the licensing of one new forex bureau during the year,” said CBK.

Nairobi has the most forex bureaus in the country at 61, Mombasa has eight, Nakuru, Kisumu and Eldoret have two each. The border towns of Namanga and Busia have one each. The number of operating bureaus stood at 126 in 2010.

The bureaus were first licensed in January 1995 to foster competition in the foreign exchange market and to narrow the exchange rate spread in the market.

As authorised dealers, forex bureaus are regulated under provisions of the Central Bank of Kenya Act (Cap 491).