The 2025 IADI Africa Regional Committee Annual General Meeting and Conference: Strengthening Financial Stability and Deposit Insurance in Kenya and Beyond

Kenya Leads the Way in Deposit Insurance Innovation

From June 16 to 19, 2025, the vibrant coastal city of Mombasa, Kenya, played host to a landmark event in Africa’s financial sector — the Annual General Meeting and Conference of the International Association of Deposit Insurers – Africa Regional Committee (IADI-ARC). This gathering brought together over 100 delegates from across Africa, Asia, Europe, and the Americas, all united by a common goal: to explore how deposit insurance systems can evolve and adapt to the complex challenges facing modern financial landscapes.

In this blog post, we take a deep dive into the conference’s key themes, Kenya’s pioneering role through the Kenya Deposit Insurance Corporation (KDIC), and the broader implications for financial resilience across Africa.

1. Setting the Stage: What is IADI and the Africa Regional Committee?

The International Association of Deposit Insurers (IADI) is a global forum that brings together deposit insurance agencies from around the world. Its mission is to promote effective deposit insurance systems that contribute to financial stability, protect depositors, and support orderly resolution of failing financial institutions.

The Africa Regional Committee (ARC) is IADI’s regional body focused on the unique challenges and opportunities within the African continent. The ARC fosters collaboration among African deposit insurers, facilitates knowledge sharing, and advocates for the establishment and strengthening of deposit insurance schemes across the region.

The 2025 Annual General Meeting and Conference, held at the scenic Pride Inn Paradise Beach Resort & Spa in Mombasa, was a critical platform for dialogue on the theme: “Enhanced Bank Resolution Frameworks and the Vital Role of Deposit Insurance Systems in Bank Failure.” This theme underscored the increasing importance of deposit insurance systems as proactive safety nets in the face of evolving financial risks.

2. The Evolving Role of Deposit Insurance Systems in Financial Stability

Deposit insurance systems have traditionally been seen as reactive mechanisms—tools to reimburse depositors after a bank failure. However, the conference emphasized a modern perspective: deposit insurance must be a proactive pillar of financial stability.

Global financial systems today are more interconnected and complex than ever before. Digital banking, fintech innovations, cyber threats, and economic volatility create new risks that can quickly cascade through the financial ecosystem. In this environment, deposit insurers must:

• Act swiftly to contain bank failures before they escalate
• Coordinate closely with supervisors, central banks, and resolution authorities
• Communicate transparently with the public to maintain trust
• Tailor approaches to the diverse landscape of financial institutions

The conference highlighted that speed, transparency, and cross-agency collaboration are no longer optional but essential for effective bank resolution.

3. Kenya Deposit Insurance Corporation (KDIC): A Beacon of Leadership and Innovation

Kenya’s KDIC took center stage at the conference, receiving widespread commendation for its leadership and innovation in deposit insurance. Kenya was among the first African countries to implement a deposit insurance system, setting a precedent that has influenced the continent.

One of the most remarkable achievements highlighted was the growth of Kenya’s Deposit Insurance Fund, which surged from KSh 105 billion in 2019 to an impressive KSh 260 billion in 2025. This growth reflects KDIC’s robust premium collection policies, prudent investment strategies, and the overall economic environment.

KDIC’s success is not just measured by fund size but also by its adoption of cutting-edge technologies and risk management frameworks, positioning it at the forefront of deposit insurance practice in Africa.

4. Harnessing Advanced Technologies for Efficient Deposit Insurance

A key highlight of the conference was KDIC’s embrace of advanced technologies to enhance its operations. These innovations include:

• Data Analytics and Risk Assessment Tools: KDIC uses sophisticated analytics to monitor banks’ risk profiles in real-time, enabling early detection of vulnerabilities.
• Digital Platforms: Streamlined premium collection and claims processing through digital systems have improved efficiency and transparency.
• Automation: Automated workflows reduce human error and speed up resolution processes.

By integrating these technologies, KDIC has improved its responsiveness and strengthened its ability to protect depositors promptly and effectively.

5. Risk-Based Premium Models: Aligning Incentives for Stability

Another forward-thinking approach adopted by KDIC is the implementation of risk-based premium models. Unlike flat-rate premiums, risk-based premiums charge banks according to their risk levels, incentivizing safer banking practices.

This model benefits the financial system by:

• Encouraging banks to maintain strong risk controls
• Reducing moral hazard where banks might otherwise take excessive risks
• Enhancing the sustainability of the Deposit Insurance Fund by aligning contributions with risk exposure

The conference discussions underscored that risk-based premiums are a best practice for modern deposit insurance schemes, and KDIC’s leadership in this area serves as a model for other African countries.

6. Proactive Risk Management and Bank Resolution: Safeguarding Public Trust

KDIC’s role extends beyond fund management to early intervention and resolution of troubled banks. The conference showcased KDIC’s proactive strategies, which include:

• Continuous monitoring of banks’ financial health
• Collaborating with regulators to implement corrective measures before crises escalate
• Facilitating orderly resolution processes that minimize disruption

These efforts are critical in preserving public trust, a cornerstone of financial stability. The conference highlighted that even a single bank failure, if mishandled, can trigger widespread panic and systemic risk.

Kenya’s experience demonstrates that a well-resourced and empowered deposit insurer can act decisively to protect depositors and maintain confidence in the banking sector.

7. Regional and Global Collaboration: Strengthening Africa’s Financial Safety Nets

The 2025 IADI-ARC conference also emphasized the importance of regional cooperation. Africa’s financial markets are increasingly interconnected, and challenges such as cross-border banking failures require coordinated responses.

During the event, Kenya’s KDIC and other African deposit insurers shared best practices and forged partnerships to:

• Harmonize legal and operational frameworks
• Develop joint training and research initiatives
• Support countries yet to establish deposit insurance systems

New members, such as the Deposit Guarantee Fund in Central Africa (FOGADAC), were welcomed, expanding the network of credible deposit insurance schemes across the continent.

These collaborative efforts are vital for building resilient financial systems that can withstand shocks and protect depositors continent-wide.