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The African Economic Research Consortium (AERC) participated in the 13th Annual Banking Research Conference on the theme “Banking sector resilience: Navigating macro-imbalances, responsiveness to evolving business landscape and driving sustainability.” This event took place on 26th – 27th September 2024 in Nairobi, Kenya. 

Prof. Victor Murinde, Executive Director, AERC delivered the keynote on “Bank stability, bank business model and the financial resource curse.” In his presentation, he observed that abundant reserve of natural resources often precipitates a resource curse in countries with weak governance institutions. This, he added fosters political corruption, thus eroding democratic accountability. 

“Recently, strong fluctuations of natural resource prices have focused the attention on the transmission of this instability to the banking system,” said Prof. Murinde. The novelty of an article he published recently related to this topic considered bank business model and credit policy with micro level data. 

Prof. Murinde welcomed the participants to the forthcoming AERC Biannual research workshop whose plenary session will be on FinTech Revolution in Africa, noting that FinTech’s have revolutionized retail electronic payment systems—a revolution that has evolved into a technological platform to manage micro-savers’ accounts, virtual savings and credit systems. Each of these AERC’s biannual research workshops attract hundreds of researchers, academics, policy makers and other economists who participate in the AERC Research Programme. The workshops provide a forum in which the participants can meet each other within a worldwide network of professionals, and deal with issues relevant to Africa’s economic development. 

On his part, Raimond Molenje, Ag. Chief Executive Officer, Kenya Bankers Association (KBA), observed that the Conference’s theme this year underscores the need to address the complex and interconnected challenges the that define the current banking sector landscape. “With the growing economic uncertainty, marked by inflationary pressures, debt crises, and shifting monetary policies; understanding these macroeconomic dynamics is crucial to better navigate the risks posed by these imbalances and develop policies that foster stability and long-term resilience in the banking sector,” said Mr. Molenje.

“The rapid technological advancements and shifting expectations are transforming how consumers engage with financial services. As fintech innovations, digital banking, and personalized financial products redefine the activities in the market, the strategies adopted by banks to maintain competitiveness, relevance, and trust in a constantly evolving business environment remain fluid” he said.

Betty Korir, Vice Chair of the Kenya Bankers Association (KBA) Governing Council and Chief Executive Officer, Credit Bank stressed the fact that commercial banks need to innovate to remain competitive. This will aid them to remain global players. She observed that challenges the banking industry in Kenya face requires strategic responses to support the national economic development agenda. “Some of the wonderful papers that will be presented here will continue to shape the banking sector and the policy framework in this country,” said Ms. Korir. 

The AERC is a leader in policy-oriented economic research in the continent, and its biannual research workshops have become the largest gatherings of professional economists in sub-Saharan Africa. The Consortium is a public not-for-profit organization devoted to building capacity for economic policy research into problems pertinent to the management of economies in sub-Saharan Africa. The AERC is a network that builds capacity through three primary components: research, graduate training in economics, as well as communications and policy outreach. The organization integrates high quality economic policy research, postgraduate training, and policy outreach within a vast network of researchers, universities, and policy makers across Africa and beyond. 

Kenya Bankers Association is the umbrella body of Banks licensed by the Central Bank of Kenya with a current membership of 46. The Association promotes and develops sound and progressive banking principles, practices and conventions and contributes to the developments of the sector. It influences the policy landscape by proactively engaging the policy development stakeholders for the development of a conducive business environment on behalf of its members. 

The Centre for Research on Financial Markets and Policy was established by the Kenya Bankers Association to offer an array of research, commentary, and dialogue regarding critical policy matters that impact on financial markets in Kenya. The Centre sponsors original research, provides thoughtful commentary, and hosts dialogues involving scholars and practitioners, and conferences on key financial market issues.