But we should also be concerned about how a continued decline in the number of community banks, in part due to the lack of de novo formations, will affect the banking and financial services system more broadly.
The recession in North America and Europe triggered by the credit crunch may reduce demand for Kenyan exports goods. •  Kenyan banks have deposits and placements in foreign institutions. Kenyan institutions also do have credit lines with foreign banking institutions. Collapse of any of these institutions or a credit crunch could hurt the economy. However, so far these effects have not been witnessed.