KDIC STRATEGIC PLAN ABRIDGED VERSION

STRATEGIC PLAN

JULY 2018–JUNE 2023

STRATEGIC PLAN

JULY 2018–JUNE 2023

Table Of Contents

List Of Abbreviations And Acronyms..................................................................................................Forward...........................................................................................................................................Executive Summary..........................................................................................................................

Chapter One ....................................................................................................................................Introduction ..................................................................................................................................... 1.1 Institutional Background .............................................................................................................. 1.2 National Development Agenda And Role of KDIC ...................................................................... 1.3 Rationale For The Strategic Plan................................................................................................... 1.4 Methodology Of Developing The Plan........................................................................................

Chapter Two..................................................................................................................................... Institutional Analysis......................................................................................................................... 2.1 Mandate..................................................................................................................................... 2.2 Vision......................................................................................................................................... 2.3 Mission....................................................................................................................................... 2.4 Core Values.................................................................................................................................

666

778

33

11

11

viiiiii

Chapter Three...................................................................................................................................9 Situational Analysis........................................................................................................................... 3.1 Deposit Insurance........................................................................................................................3.2 Evaluation of KDIC's Past Performance.......................................................................................3.3 Environmental Scanning.............................................................................................................3.4 Stakeholder Analysis..................................................................................................................

Chapter Four...................................................................................................................................25 Strategic Analysis.............................................................................................................................25 4.1 Strategic Pillars...........................................................................................................................25 4.2 Strategic Objectives And Strategies.............................................................................................28

Chapter Five................................................................................................................................... Implementation Plan.......................................................................................................................33

Theme 1..........................................................................................................................

Theme 2.........................................................................................................................

Theme 3.........................................................................................................................

Theme 4.........................................................................................................................

Theme 5..........................................................................................................................

99

14

1822

33

36

40

45

51

33

Chapter Six ....................................................................................................................................63

Institutional Structure .....................................................................................................................63

6.1 Board Of Directors ...................................................................................................................63

6.2 Chief Executive Officer .............................................................................................................63

6.3 Directorates And Departments ..................................................................................................63

6.4 KDIC Organogram ...................................................................................................................65

Chapter Seven ................................................................................................................................66

Monitoring, Evaluation And Reporting ...........................................................................................66

7.1 Objectives Of Monitoring, Evaluation And Reporting ...............................................................

7.2 Monitoring, Evaluation And Reporting (ME&R) Strategies .........................................................

7.3 Key Performance Indicators ......................................................................................................68

7.4 Accountability And Risk ............................................................................................................70

66

66

LIST OF TABLES

Table 1: Member Premium Contribution ..........................................................................................11

Table 2: Summary of Protection & Exposure Indicators ....................................................................12

Table 3: KDIC Statement of Comprehensive Income ........................................................................15

Table 4: PESTEL Analysis ..................................................................................................................18

Table 5: SWOT Analysis ..................................................................................................................21

Table 6: KDIC Key Stakeholders ......................................................................................................22

Table 7: Strategic Themes, Objectives and Strategies ........................................................................28

Table 8: Key Performance Indicators ...............................................................................................69

Table 9: Risk Analysis ......................................................................................................................71

LIST OF FIGURES

Figure 1: Deposit Insurance Coverage ..............................................................................................13

Figure 2: Sources of Funds ...............................................................................................................16

Figure 3: KDIC Strategic Map ..........................................................................................................25

Figure 4: KDIC Organogram ...........................................................................................................65

LIST OF ABBREVIATIONS AND ACRONYMSADR - Alternative Dispute ResolutionBOD - Board of DirectorsBSC - Balance ScorecardCBD - Central Business DistrictCBK - Central Bank of KenyaCEO - Chief Executive OfficerCMA - Capital Markets AuthorityCS - Corporation SecretaryCTP - Corporate Training PlanDGMF - Deputy General Manager, Finance DGMHRA - Deputy General Manager, Human Resource and AdministrationDGM-IA - Deputy General Manager, Internal AuditDGMICT - Deputy General Manager, Information and Communication DGML - Deputy General Manager, LegalDGMS&C - Deputy General Manager, Strategy and ComplianceDT - Deposit TakingDTMBS - Deposit Taking Micro finance BanksERM - Enterprise Risk ManagementERP - Enterprise Resource PlanningGDP - Gross Domestic ProductGMC - General Manager Corporate ServicesGMR - General Manager, ResolutionGMR&E - General Manager, Risk and Examination

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July 2018–June 2023

HODs - Heads of DepartmentsHRM - Human Resource ManagementIADI - International Association of Deposit InsurersICT - Information and Communication TechnologyIRA - Insurance Regulatory AuthorityISO - International Organization for StandardizationKDI - Kenya Deposit InsuranceKDIC - Kenya Deposit Insurance CorporationKPI - Key Performance IndicatorME&R - Monitoring, Evaluation & Reporting MOU - Memorandum of UnderstandingMSC - Manager, Strategy & ComplianceMTP III - Medium Term Plan IIIPESTEL - Political, Economic, Social, Technological, Ecological and LegalPMAS - Performance Management Appraisal SystemPMS - Performance Management SystemSASRA - Sacco Societies Regulatory AuthoritySCAC - State Corporations Advisory CommitteeSDGs - Sustainable Development GoalsSWOT - Strengths, Weaknesses, Opportunities and ThreatsTAT - Turn Around TimeTNA - Training Needs AssessmentUSA - United States of America

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FOREWARD

MESSAGE FROM THE CHAIRMAN BOARD OF DIRECTORS

On behalf of the Board of Directors, I am delighted to present the KDIC Strategic Plan 2018–2023, which outlines the strategic vision and goals. The Strategic Plan has been developed to help the Corporation realize its full potential and fulfil its mandate in serving its Customers and Stakeholders.

The Board has reviewed the past successes and failures to determine our vision and future goals. This Strategic Plan takes cognizance of the changes and emerging issues in the financial system, and the need to ensure and maintain financial sector stability in Kenya.

The core mandate of the Corporation is Deposit Insurance, Risk minimization and Resolution of institutions. The strategic themes identified in the Strategic Plan attest to our commitment to meeting our core mandate.

The themes of Risk Management, Prompt Resolutions, Deposit Insurance, Stakeholder Management and Organizational Capacity are all aimed at achieving excellence in delivery of services to banks and micro-finance banks and their depositors. The themes will help support and promote confidence in the financial system. In order to implement these strategic themes, we have committed to develop an enabling environment and appropriately allocate and deploy requisite human capital, financial and physical resources to help us sustain excellence in service delivery to our customers. The Corporation developed this Strategic Plan in a consultative approach, including the input of our Stakeholders, who we sincerely thank for their participation in this process.

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The Board of Directors is taking up the responsibility for overseeing and monitoring the implementation of this plan. I am certain that, with the collaboration of our talented staff and stakeholders including The National Treasury, Central Bank of Kenya, The World Bank (FSSP), IADI, development Partners, friends, and supporters, the goals espoused in this plan will translate into milestones.

By investing in the future of KDIC, we are investing to build a better future for the stability of Kenya's financial system. I would like to invite all our stakeholders to join hands with us in building a stable financial sector.

Chairman

Board of Directors

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MESSAGE FROM THE CHIEF EXECUTIVE OFFICER

It gives me great pleasure to reflect on the Milestones the Corporation has achieved since its establishment through the KDI Act of 2012. The milestones to note include:(1) KDIC was voted and awarded as the best deposit insurance in the world in 2016 at an event in Seoul

Korea;(2) KDIC has seen the development of a receivership framework and a bank resolution handbook;(3) Achieved the strengthening of debt recovery for banks in liquidation/receivership through engagement

of debt collectors;(4) Achieved the strengthening of Corporate Governance through amendment of the Finance Act 2012;

and;(5) Installation of an ERP system to manage KDIC's business functions within a centralized and

integrated system.

The Kenya Development Agenda of the Government of Kenya is to maintain a 10% annual economic growth. Further, the government is to establish “a vibrant and globally competitive financial sector which will enhance job creation and promotion of saving among Kenyans to finance Kenya's overall investment needs” that has been operationalised by the BIG FOUR AGENDA. KDIC as one of the actors is required to facilitate the existence of a stable financial sector. This is a basis for the development of the 2018 – 2023 strategic plan that will provide a roadmap for us to meet our objectives.

Engagement was at the heart of this development process. The planning team met with various stakeholders; these sessions were extremely valuable in shaping the plan and helped identify novel ways of delivering the best quality of service to our various stakeholders.

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This strategic plan positions the Corporation towards the vision of becoming a premier Deposit Insurance and the mission of promoting confidence in the financial system through deposit insurance, risk management and timely resolutions. The mission shows the proactive nature of the Corporation in managing its mandate going forward.

KDIC has identified and will pursue the following themes namely; Risk Management, Deposit Insurance, Prompt Resolutions, Stakeholder Management and Organizational Capacity.

The achievement of the Strategic direction will be supported by our core values which include the practice on Professionalism, Integrity, Customer Focus, Fairness, Innovativeness and Teamwork. The Corporation is well prepared to protect customer's deposits in line with the KDI Act and ensuring stability in the financial sector in the country. It has instituted a Governance structure to support the implementation of the strategic plan including establishment of the Office of Strategy Management (OSM), and instituted an elaborate monitoring, evaluation and reporting framework.

I would like to express my sincere gratitude to all those who were involved in charting of this Strategic Plan. I hope this document will convey to all stakeholders our exciting road map aimed at achieving our public policy objective of fostering financial stability. I am excited about the opportunities ahead of us and the initiatives outlined in the plan. I hope you find it informative and useful as you go about your daily business at work.

Chief Executive Officer

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EXECUTIVE SUMMARY

The Kenya Deposit Insurance Corporation (KDIC) is a statutory body established under the Kenya Deposit Insurance Act, 2012 whose mandate is to provide a deposit insurance scheme for customers of member institutions; receive, liquidate and wind up any institution in respect of which the Corporation is appointed receiver or liquidator; and provide incentives for sound risk management and generally promote the stability of the financial system.

One of the priorities of the Government of Kenya within the Kenya Development Agenda is to maintain a 10% annual economic growth. Further, it highlights the need to establish “a vibrant and globally competitive financial sector which will enhance job creation and promotion of saving among Kenyans to finance Kenya's overall investment needs.” To facilitate this, a stable financial sector is required. KDIC, as one of the institutions mandated to promote and contribute to the stability of the Kenyan financial system, embarked on development of the 2018–2023 Strategic Plan that will provide a roadmap for the realization of its mandate. The Strategic Plan was developed through a participatory approach, which ensured that views of key stakeholders were incorporated.

KDIC reviewed its vision, mission and core values. A situational analysis was also carried out to evaluate the internal and external environments in which the Fund operates. This analysis enabled the identification of the following key strategic themes for the plan period.

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STRATEGIC THEMES

Risk Management

Deposit Insurance

Prompt Resolution

Stakeholder Management

Organizational Capacity

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• To increase public awareness levels from 9% in 2018 to 34% by 2023

• To strengthen complaints handling and consumer protection

• To embrace best practices

Risk Management

Strategic Objective

• To enhance early detection and timely intervention of risk exposure

Deposit Insurance

Stakeholder Management

• To increase the fund size from 2.7% in 2017 to 3.4% by 2023

• To increase the value of deposits covered from 8.75% in 2017 to 16% by 2023

• To reduce payment period of protected deposits from 14 days in 2018 to 7 days by 2023

StrategicThemes

Ksh

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The identified strategic themes formed the basis for the setting of objectives that KDIC will pursue in the next five years. For each of the identified themes, the following strategic objectives were formulated.

Strategic ObjectiveStrategicThemes

• To ensure a decision is made on the most appropriate resolution option within 60 days by 2023 for non-systemic institutions

• To ensure effective and efficient receiverships/ liquidations

• To increase the debt recovery rate from 20% in 2018 to 30% by 2023

Prompt Resolution

Organizational Capacity

• To have a supportive legal and regulatory framework

• To enhance talent management

• To entrench a robust organizational culture

• To enhance operational efficiency

• To promote good corporate governance practices

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To achieve the strategic objectives, appropriate strategies were identified and operationalized within the implementation plan. For each strategy, the implementation plan identifies the expected outcome, activities, output indicators, timeline and implementing actors. In addition, an institutional structure that will support the implementation of the identified strategies is presented in chapter six of this plan. Over the five-year period, KDIC will require about Kes 7.1 billion to implement the activities in the plan. To achieve the strategic objectives, appropriate strategies were identified and operationalized within the implementation plan. For each strategy, the implementation plan identifies the expected outcome, activities, output indicators, timeline and implementing actors. In addition, an institutional structure that will support the implementation of the identified strategies is presented in chapter six of this plan. Over the five-year period, KDIC will require about Kes 7.1 billion to implement the activities in the plan.

KDIC developed a Monitoring, Evaluation and Reporting (ME&R) framework aimed at enhancing successful implementation of the Strategic Plan. Further, it identified and documented key annual performance indicators in chapter seven that will help track progress towards the achievement of the set objectives.

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INTRODUCTION

1.1 INSTITUTIONAL BACKGROUND

The Kenya Deposit Insurance Corporation (KDIC) is a statutory institution established under the Kenya Deposit Insurance Act, 2012. KDIC is the successor of the defunct Deposit Protection Fund Board which was established in 1985 through an amendment to The Banking Act, Chapter 488 of the laws of Kenya.

KDIC is mandated to provide a deposit insurance scheme for customers of member institutions and to provide incentives for sound risk management and generally promote the stability of the financial system. In addition, KDIC is mandated to receive, liquidate and wind up any institution in respect of which it is appointed receiver or liquidator. The role of resolving problem banks under receivership or liquidation was previously undertaken by the Central Bank of Kenya (CBK).

1.2 NATIONAL DEVELOPMENT AGENDA AND ROLE OF KDIC

Due to the dynamic nature of the Kenya national advancement goals and objectives, the Corporation took into consideration the country's long term domestic and global economic priorities when setting its strategic themes, objectives and strategies.

Kenya's long-term development agenda is set out in the Kenya Vision 2030. The aim of the Vision is to make Kenya a globally competitive and prosperous country by transforming it into an industrialized middle-income nation, providing high quality of life for all its citizens in a clean and secure environment. The vision has three pillars namely: economic, social and political.

CHAPTER 1

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The Vision 2030 recognizes the need to create a vibrant and globally competitive financial sector that will create jobs and also promote high level of savings to finance Kenya's overall investment needs. vibrant and globally competitive financial sector that will create jobs and also promote high level of savings to finance Kenya's overall investment needs.

In addition, the existence of a stable financial sector will have a significant role in providing access to financial services for both individuals and smaller-scale enterprises which will facilitate the achievement of the goals of the Big Four Agenda namely Housing, Health, Manufacturing and Food security.

Within the Third Medium Term Plan (MTP III) 2018-2022, the government has incorporated Sustainable Development Goals (SDGs) in its development agenda. For the country to achieve the targets in the SDGs, there is need for a stable financial sector.

KDIC therefore has an important role to play towards the achievement of the SDGs, Vision 2030, MTP III and The Big Four Agenda. This will be achieved by maintaining financial stability in the banking sector through provision of an effective and efficient deposit insurance scheme. The stability in the financial system will foster public confidence in the banking sector which will enable more people to deposit their money in financial institutions. Consequently, financial institutions will be able to provide credit facilities to the public, SMEs and government to drive various development and business initiatives.

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1.3 RATIONALE FOR THE STRATEGIC PLAN

Since its inception, KDIC has been guided by the 2015-2018 Strategic Plan in its operations. However, the plan period has lapsed and this necessitates the development of a new Strategic Plan that will steer the Corporation in the right direction over the next plan period. The Strategic Plan builds on the lessons drawn from the implementation of the previous Strategic Plan.

Additionally, the Strategic Plan aims at identifying and selecting the most appropriate strategies for utilizing the skills and resources available to KDIC to enable it achieve specified objectives, while taking into account the external environment in which it operates. The plan also provides a framework that will enable the Corporation to monitor, evaluate and report on its performance.

1.4 METHODOLOGY OF DEVELOPING THE PLAN

A participatory approach was adopted in the Strategic Planning process. This was aimed at enhancing ownership, and effective and efficient implementation of the Strategic Plan. Specifically, the following methodology was used:

1.4.1 Document review

Various documents were referred to for purposes of extracting relevant information for use in the preparation of the Strategic Plan. These documents included:

i) KDIC Strategic Plan (2015-2018);

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ii) KDIC financial reports for the past 5 years;

iii) Customer Satisfaction survey report; 2017

iv) Organizational structure;

v) The Constitution of Kenya;

vi) The Kenya Deposit Insurance (KDI) Act 2012;

vii) The Banking Act;

viii) Sustainable Development Goals;

ix) Kenya Vision 2030;

x) Medium Term Plan III; and

xi) The Big Four Agenda.

1.4.2 Pre-Workshop Interviews/Discussions

Discussions were held with KDIC's Board of Directors, Staff and key external stakeholders. These discussions were aimed at gathering information that informed the Strategic Planning process.

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1.4.3 Strategic Planning Workshops

To incorporate the views of stakeholders and to enhance ownership of the Strategic Plan, the following workshops were held:

i) A two-day Strategic Planning workshop with KDIC's Management to formulate the draft Strategic Plan.

ii) A two-day Strategic Planning workshop with the Board of Directors and Management to refine the draft Strategic Plan.

iii) A Board workshop to validate the Strategic Plan.

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INSTITUTIONAL ANALYSIS

2.1 MANDATE

As stipulated in the Kenya Deposit Insurance (KDI) Act 2012, KDIC's mandate is to provide a deposit insurance scheme for customers of member institutions and to receive, l i qu ida te and w ind up any institution in respect of which the Corporation is appointed receiver or liquidator. Arising from the mandate, the Corporation's other core functions are to:

Levy contributions for the Fund from institutions in accordance with the KDI Act;

(a)

(b)

(c)

Hold, manage and apply the Fund in accordance with the provisions of the Act and administer the deposit insurance scheme set up under the KDI Act;

Provide incentives for sound risk management and generally promote the stability of the financial system; and

Perform such other functions as may be conferred on it by the KDI Act or any other written law.

(d)

CHAPTER 2

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2.2 VISION

2.3 MISSIONTo promote public confidence in thefinancial system through deposit insurance, risk management and timely resolution.

To be a premier deposit insurance scheme.

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In the endeavour to realize its vision and mission, KDIC upholds the following core values:

2.4 CORE VALUES

Fairness: We treat all stakeholders with impartiality and respect.

Innovativeness: We are committedto continuous improvement in service delivery through adoption emerging technologies.

We aim to collaborate with member institutions, other financial safety net participants and other stakeholders in enhancing financial stability.

Professionalism: We uphold high standards of performance and ethical principlesin service delivery

Integrity: We conform to strong moral principles of honesty and accountability in our operations

Customer Focus: We strive to meet customer expectations and pro-actively address their concerns and needs.

Teamwork

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SITUATIONAL ANALYSIS

3.1 DEPOSIT INSURANCE

3.1.1 Global perspective

Financial institutions play a critical role in any economy by facilitating payments, intermediation, credit and advances. Thus, failure of these institutions often results in an economic crisis. To address the effects of financial institutions failure, deposit insurance schemes have been established in many jurisdictions to protect bank depositors, in full or in part, from losses caused by a bank's inability to pay its debts when due.

Deposit insurance was first established in the USA in 1934 as a mitigation measure against the numerous bank failures experienced during the 1930s Great Depression. Since then, many other countries have adopted either an implicit or explicit deposit insurance scheme in their financial sector. According to International

ndAssociation of Deposit Insurers (IADI), as of 22 September 2017, 140 countries had instituted some form of deposit insurance while another 28 countries were in the process of establishing a deposit insurance system.

In an attempt to enhance protection of financial consumers and ultimately contribute to the stability of the financial system, some countries such as Korea, Malaysia and the United Kingdom have adopted an integrated deposit insurance scheme in which the deposit insurer has a wider mandate to provide protection to insurance policyholders, stock exchange investors, banks and non-bank financial institutions.

CHAPTER 3

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3.1.2 Deposit Insurance in Kenya

In its endeavor to provide protection to depositors of member institutions, KDIC operates a mandatory ex-ante deposit scheme for deposit taking institutions licensed by the Central Bank of Kenya. These institutions comprise of 42 Commercial banks, one Mortgage Finance Institution and 13 Deposit Taking Micro-finance Institutions. The scheme cover limit is a maximum of Kes 100,000 per depositor for the following types of accounts:

i) Current Accounts

ii) Savings Accounts

iii) Fixed Deposit Accounts

iv) Foreign Currency Deposits

Each member of the deposit taking institutions pay an annual premium of 0.15% of the institution's average total deposit liabilities for the past twelve months or a minimum of Kes 300,000, whichever is higher. As shown in Table 1, total premium contribution has increased steadily from Kes 2,339.1 million in 2012/13 to Kes 4,276.12 million in 2017/18.

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Table 1: Member Premium Contribution

2012/13

2013/14

2014/15

2015/16 2016/17 2017/18

(Kes

'M')

(Kes

'M')

(Kes

'M')

(Kes

'M') (Kes 'M') (Kes 'M')

Banks

2,294.3

2,615.70

2,952.70

3,546.20 3,922.95 4,157.68

Non-Bank FIs

28.3

35.40

40.64

50.37 59.91 58.35

DTMBs

16.5

24.80

39.20

55.49 60.77 60.09

Total contribution 2339.1 2,675.90 3,032.54 3,652.06 4,043.63 4,276.12

% Increase in total

contribution

14.40% 13.33% 20.43% 10.72% 5.75%

3.1.3 Summary of Protection and Exposure Indicators

In Kenya, fully protected accounts have remained at an average of 96% since 2013, thus surpassing the benchmark level of 80% recommended by IADI. The value of deposits covered decreased from 10.23% in 2013 to 8.24% in 2018which is below IADI's recommended rate of 20%. The effective cover significantly increased from 20.46% in 2012/13 to 33.28% in 2017/18. This caused a significant decrease in the exposure level from 79.54% in 2012/13 to 66.72% in 2017/18. This is summarized in Table 2.

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Table 2: Summary of Protection & Exposure Indicators

2012/13

2013/14

2014/15

2015/16

2016/17 2017/18 % Change

1

Total Deposits

(Kes 'M')

1,884,784

2,188,065

2,630,908

2,762,386

2,984,909 3,290,909 10.25%

2

Total Insured

(Kes 'M')

192,887

213,708

246,772

252,502

261,053 271,485 4.00%

3

Protection

Level (2/1)

10.23%

9.77%

9.38%

9.14%

8.75% 8.25% -5.67%

4

Fund Balance

(Kes 'M')

39,464

46,584

54,914

65,283

77,159 90,374 17.13%

5

Effective Cover

(4/2)

20.46%

21.80%

22.25%

25.85%

29.55% 33.28% 3.73%

Deposit Accounts

6

Total no. of

accounts (000)

20,908

27,423

33,936

40,776

46,623 46,623 0.00%

7 Accounts fully

covered (000)

19,911 26,327 32,689 39,443 45,140 45,140 0.00%

8 Share of

protected

accounts (7/6)

95.23% 96.00% 96.33% 96.73% 96.82% 96.81% -0.01%

9 Exposure Level

(100% - 5)

79.54% 78.20% 77.75% 74.15% 70.38% 66.72% -3.66%

Source: KDIC Annual ReportsFigure 1 shows the disparity in total deposits viz total insured deposits.

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2 2 2 3 3 30

Figure 1 : Deposit Insurance Coverage

Source: KDIC Annual Report, 2017/18

19

22

2628

30

33

5

10

15

20

25

30

35

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18

KSH

M "

10

0,0

00

"

YEAR

Total Deposits Total Insured

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3.2 EVALUATION OF KDIC'S PAST PERFORMANCE

A review of the Corporation's past performance was undertaken based on the implementation status of the 2015–2018 Strategic Plan and the financial results during the plan period. The evaluation was undertaken with a view of identifying achievements, challenges encountered and lessons learnt during the plan period.

3.2.1 Milestones

Some of the key milestones during the 2015 -2018 plan period include:

i) KDIC was voted and awarded as the best deposit insurance in the world.

ii) Development of a Receivership Framework and a Bank Resolution Handbook;

iii) Successful application of the transfer and exclusion resolution mechanism in a troubled bank.

iv) Strengthening debt recovery for banks in liquidation/Receivership through engagement of debt collectors;

v) Strengthening of corporate governance through amendment of the Finance Act 2012.

vi) Appointment of the first Chairman of KDIC and new independent Board members;

vii) Approval of an optimal organization structure and benefits by State Corporations Advisory Committee(SCAC);

viii) Installation of Enterprise Resource Planning (ERP);

ix) Development and implementation of a communication strategy; and

x) Creation of public awareness through various channels.

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3.2.2 Financial performance

As shown in Table 3, the Corporation has two main sources of funds namely: assessment income and investment income. A review of the statement of comprehensive income revealed that total revenue increased from Kes 6.4 billion in 2012/13 to Kes 9.3 billion in 2017/18.

Table 3 : KDIC Statement of Comprehensive Income

2012/13

2013/14

2014/15

2015/16 2016/17 2017/18

Income

Kes ‘000’

Kes ‘000’

Kes ‘000’

Kes ‘000’ Kes ‘000’ Kes ‘000’

Investment Income

4,059,415

4,675,863

5,466,351

7,148,479 8,205,641 9,303,591

Other Income

31,776

19,172

111,044

54,031 42,815 37,342

Total Revenue

4,091,191

4,695,035

5,577,395

7,202,510 8,248,456 9,340,933

Expenses

Administration and establishment expenses

250,368

251,196

280,424

314,539 415,011469,245

Impairment losses

1,370

Surplus for the year before taxation

3,839,453

4,443,839

5,296,971

6,887,971 7,833,445 8,871,688

Surplus for the year after taxation 3,839,453 4,443,839 5,296,971 6,887,971 7,833,445 8,871,688

Total Comprehensive Income 3,839,453 4,443,839 5,296,971 6,887,971 7,833,445 8,871,688

Total revenue growth rate 14.76% 18.79% 29.14% 14.52% 13.24%

Expenses growth rate 0.33% 11.64% 12.17% 31.94% 13.07%

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The review also shows administration and establishment expenses increased from Kes 250.4 million in 2012/13 to Kes 469 million in 2017/18 as a result of increased staff and systems costs.

Figure 2 shows the growth trajectory for the income streams.

Figure 2 : Sources of Funds

-

2.00

4.00

6.00

8.00

10.00

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18

Ksh

Billio

ns

Year

Sources of Revenue

Member Institutions Contributions Investment Income Other Income

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3.2.3 Challenges

In discharging its mandate, KDIC has encountered the following challenges:

i) Protracted litigations;

ii) Staff complement.

iii) Knowledge management;

iv) Information sharing with safety net participants; and

v) Public awareness of the Corporation.

3.2.4 Lessons Learnt

Over the last three years, KDIC has learnt the need for:

i) Adoption of a risk based premium model;

ii) Development of a framework to strengthen legal representation;

iii) Collaboration and partnership with key stakeholders;

iv) Adequate number of skilled and motivated human capital;

v) Development of a framework to facilitate information sharing between safety net participants, member institutions and KDIC;

vi) Prompt corrective action for “troubled” members;

vii) Keeping abreast with technological developments in the financial sector; and

viii) A strong monitoring and evaluation system.

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3.3 ENVIRONMENTAL SCANNING

In the process of developing the 2018–2023 Strategic Plan, KDIC undertook an environmental scan aimed at determining emerging issues that need to be addressed or taken into account during the plan period. The analysis was undertaken through Political, Economic, Social, Technological, Ecological and Legal (PESTEL), and Strengths, Weaknesses, Opportunities and Threats (SWOT) models as presented in Sections 3.2.1 and 3.2.2.

3.3.1 PESTEL ANALYSIS

Table 4 : PESTEL Analysis

Factor

Aspect

Effect/

Implication

Mitigation measure

1.

Political

•

Changes in government policies

i.

Change in the deposit insurance regulation

ii.

Change in deposit levels

i. Compliance with new policies and regulations

ii. Offer advice on proposed reforms

•

Instability during political electioneering period

i.

Interference with the Corporation’s planned programs

ii. Change in deposit levels

i. Realignment of Corporation’s programs

ii. Market surveillance and intelligence on potential risks

2. Economic • Inflation i. High operational costii. Low level of customer

deposits due to high cost of living

i. Use of technology to increase efficiency

ii. Sensitize depositors on importance of saving

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Factor Aspect

Effect/Implication Mitigation measure

3.

Social

•

Poor saving culture

i.

Low level of deposits

i. Sensitize depositors on importance of saving

ii. Enhance financial literacy levels

•

Corruption

i.

Non-compliance with the lawii.

Negative national/corporate image

iii.

Lack of confidence in the financial system

i. Collaboration with relevant agencies involved in the fight against corruption

ii. Review internal control systemsiii. Sensitization of stakeholders

4.Technological • Advancement in technology

i. Increase in operation efficiency by automation of processes

ii. Easy access of information by customers

iii. Use of technology to pay depositors

i. Enhance technological innovation to improve operations

ii. Use of social media to create public awareness

iii. Create awareness on payment method

• Cyber crime i. Increased risk for member

institutionsii.

i.

Loss of data/information

i. Enhance system securityii. Implement BCP

• i. Buy systems that are scalableii. Capacity build staff on new

technological trends

5. Ecological • Green economy i. Reduce operational costs i. Use of biodegradable material

• Work environment i. Distraction caused by noise i. Relocate the offices from the CBD

19Strategic Plan


Rapid technological changes

High cost acquiring and maintenance

Act exposure

Factor Aspect

Effect/Implication Mitigation measure

6. Legal • Overlapping mandates i. Lack of clarity on where responsibility lies

i. Review of relevant ActsSensitize stakeholders

ii.• Changes in deposit

insurance legislations i. Cost of monitoring

compliancei. Capacity building ii. Ensure compliance with the

new legislation • Member institutions i. Financial instability i. Enforce compliance with the

Actnon-compliance to KDI ii. High level of deposit risk

20Strategic Plan


3.3.2 SWOT ANALYSIS

Analysis of the internal and external environment was undertaken through SWOT analysis to identify factors that may influence the operations of KDIC in the plan period. The results are presented in Table 5.

ENABLERS

• Existing legal framework Supportive Board;• Existence of an Enterprise Resource Planning

(ERP) System;• Strong capital base; • Competent staff;• Strong presence in International forums;• Strategic partnerships and collaborations;• Good will from stakeholders such as CBK,

member institutions and relevant government agencies;

• Technological advancement; • Growing number of deposits taking

institutions e.g. DT saccos; and• Enhanced market discipline.

Table 5: SWOT Analysis

CHALLENGES

• Low public awareness;• Slow resolution process;• Low uptake of technology;• Bureaucracy in operations;• Disparity in engagement of staff;• Lack of teamwork;• Lack of timely and accurate information to

guide KDIC decisions;• Poor corporate governance within member

institutions;• Cyber crime;• Negative aspect of social media;• Changes in technology;• Changes in legislation; • Protracted litigation process; and• External interference.

21Strategic Plan


3.4 STAKEHOLDER ANALYSIS

A stakeholder is any person, group or institution that has an interest in the activities of an organisation. The key KDIC's stakeholders are identified in Table 6.

Table 6 : KDIC Key Stakeholders

Stakeholder/Interested Party

Stakeholders Expectations of KDIC

KDIC Expectations of Stakeholders

1

Depositors

i. Deposit money in member institutionsii. Information on members institutions conductiii. Provision of accurate information

2

Member institutions

i. Proper administration of the Deposit Insurance Fund ii. Prompt action of troubled memberiii. Administer a Deposit Insurance Systemiv. Stable financial systemv. Affordable insurance premium

i. Accurate and timely informationii. Observance of good corporate governanceiii. Adoption of sound risk management practicesiv. Compliance with set regulations

3 CBK and Other Regulators

i. Sharing of information on member institutions ii. Provision of services as per the Memorandum of Understanding (MOU's)

i. Sharing of information on member institutions ii. Oversight of member institutionsiii. Prompt actions on issues raised

I. Provide insurance against loss of depositsii. Prompt access to their deposits incase of failure iii. Stable financial system iv. Information on operations of deposit institutionsv. Fairness in administration of the insurance fund

22Strategic Plan



Stakeholders Expectations of KDIC KDIC Expectations of Stakeholders

i. Collaboration with KDIC on financial literacy training

4

Learning institutions

i. Collaboration with KDIC on financial literacy training ii. Provision of surveys and publications

5 General Public i. Financial stability and sanity in the industryii. Information on operations of DIS

i. Deposit money in member institutions ii. Whistle blowing

6

Board

i. Implementation of decisions and developed policies ii. Efficiency and effectiveness in the KDIC undertakings iii. Transparency and accountability

i. Policy directionii. Timely decision makingiii. Good governance practices

7 Employees i. Conducive working environment ii. Competitive remuneration and welfare systemiii. Skill development and equal opportunities iv. Recognition and reward

i. Delivery of efficient serviceii. Commitment and professionalism iii. Integrity iv. Achievement of set targets

8 Government, Parliament,Ministries and Agencies

i. Stability and development of the financial industryii. Statutory complianceiii. Transparency and accountability

i. Timely approval of budgets and decision makingii. Prompt legislations

9 Media i. Provision of information in a timely mannerii. Enhance public awareness

i. Fair and accurate coverageii. Support in awareness creation

23Strategic Plan



Stakeholders Expectations of KDIC KDIC Expectations of Stakeholders

10 Strategic partners e.g. IADI, FSB, FSSP and Other DIs

i. To be aligned to the best practices.ii. A highly competent human capital

i. Best practiceii. Capacity buildingiii.Technical support

11 Suppliers i. Timely payment for goods and/ or services ii. Honoring of contracts

i. Quality goods and servicesii. Timely delivery of goods and services

24Strategic Plan


4.1 STRATEGIC PILLARS

Strategic pillars are the key performance areas in which an organization must excel to achieve its mission and vision, and deliver value to customers. The Corporation's strategic mapisillustrated in Figure 3.

MISSIONTo promote public confidence in the financial system through deposit insurance,

risk management and timely resolution

CORE VALUES

• rofessionalism P • ntegrityI • ustomer FocusC • airness F • nnovativenessI • eamworkT

VISIONTo be a premier deposit insurance scheme

DEPO

SIT

IN

SUR

AN

CE

STA

KEH

OLD

ER

MA

NA

GEM

EN

T

OR

GA

NIZ

AT

ION

AL

CA

PAC

ITY

PR

OM

PT

RESO

LUT

ION

RIS

K M

AN

AG

EM

EN

T

Figure 3: KDIC STRATEGY HOUSE

STRATEGIC ANALYSIS

CHAPTER 4

25Strategic Plan


4.1.1 Risk ManagementA key mandate of KDIC is risk minimization which calls for early identification of risks within the member institutions. To this end, there is need for adoption of a risk-based examination model, strengthening of market conduct surveillance and implementation of appropriate interventions. In addition, there is need for strong linkages and collaborations with other safety net players, member institutions and depositors for sharing/provision of information.

4.1.2 Deposit InsuranceA key mandate of KDIC is to provide a deposit insurance scheme for the customers of member institutions. Thus, to effectively discharge its mandate, the Deposit Insurance Fund needs to be sufficient to meet future obligations of paying depositors in case of a member institution failure.To this end, the Corporation intends to implement risk based premium model, review the target fund size and coverage level and ensure prudent investment of funds. To instill confidence in the market, there is need for the Corporation to ensure prompt payment of protected deposits in case of member institution failure. This calls for liquidity management and review of depositor payment processes and methods.

4.1.3 Stakeholder ManagementTo deliver on its mandate, KDIC needs to strengthen partnerships and collaboration with various stakeholders. Through partnerships, the corporation will enhance adoption of best practices, sharing of information and building capacity in deposit insurance. In addition, public awareness is critical in enhancing confidence in the financial system. KDIC will enhance public awareness through various channels. The corporation will enter into and implement as appropriate and on a need to basis agreements with the stakeholders to enhance delivery of its mandate.

26Strategic Plan


4.1.4 Prompt ResolutionOne of KDIC's roles is to resolve member institutions in an orderly manner that ensures stability and minimizes loss to the financial system. To this end, the Corporation will develop a resolution framework, strengthen partnerships with financial safety net players and the judiciary. The Corporation will also strengthen debt recovery through adoption of alternative debt recovery methods. In addition, KDIC will continuously evaluate the adequacy of the Fund and its liquidity, and adopt agency payment methods in a bid to ensure timely payment of protected deposits.

4.1.5 Organizational CapacityFor effective execution of its mandate, KDIC requires a supportive legal framework. To this end, the Corporation will pursue the review of the Kenya Deposit Insurance Act and Regulations. In addition, the Corporation will work with other stakeholders for the review of Acts and regulations that hinder its operations. To enhance compliance with its regulations, KDIC will undertake sensitization of member institutions. To effectively deliver on its mandate, KDIC will require adequate human resources with the right skills and competencies. Thus, the Corporation intends to fast track the populating the staff establishment and implementation of the approved organizational structure and to undertake staff capacity building. Provision of adequate tools and equipment is also key in enhancing staff productivity as well as ensuring employee health and safety. KDIC also recognizes the need to create and maintain efficient operational processes in order to deliver on its mandate. During the plan period, the will reengineer its processes and Corporationfully adopt the Enterprise Resource Planning platform to increase operational efficiency. To enhance synergy within the organization, KDIC intends to improve internal communication and teamwork among staff so as to enhance service delivery.

27Strategic Plan


4.2 STRATEGIC OBJECTIVES AND STRATEGIESThe strategic objectives and the respective strategies under each of the thematic areas are captured in Table 7.

Table 7: Strategic Themes, Objectives and Strategies

Risk

Management

1

To enhance early detection

and timely intervention of

risk exposure

i.

Strengthen linkages with

stakeholders - member institutions,

regulatory agencies

ii.

Strengthen risk-based surveillance

iii.

Enhance research and data analytics

Deposit Insurance

1.

To increase the ratio of fund to

total deposit from 2.7% in

i.

Adopt risk based premium model

ii. Prudent investment of the Fund

2. To increase the value of

deposits covered from 8.75%

i. Review of coverage level

Strategic Theme

Objectives

Strategies

2018 to 3.4% by 2023

in 2018 to 16% by 2023

28Strategic Plan


3.

To ensure payment of

protected deposits within 30

days

i.

Ensure availability of accurate

deposit data from member

institutions

ii.

Enhance depositors’ payment

Stakeholder

management

1. To i ncrease public awareness

levels from 9% in 2018 to

40% by 2023

i. Strengthen depositor education

ii. Enhance corporate social

responsibility (CSR)

iii. Improve corporate visibility

2. To strengthen complaints

handling and consumer

protection

i. Enhance service delivery

ii. Develop and implement consumer

protection policy and guidelines

3. To embrace best practices i. Strengthen strategic alliances

Strategic Theme Objectives Strategies

Ksh

29Strategic Plan


Prompt

Resolution

1. To ensure a decision is made

on the most appropriate

resolution option within 60

days by 2023 for non-systemic

institutions

i. Implement a robust resolution

framework

ii. Develop a database of past

resolution experiences for future

references

iii. Collaborate with other Safety Net Players (e.g. Central Banks, CMA, IRA, SASRA) and other regulatory agencies


2. To ensure effective and

efficient receiverships/

liquidations

i. framework applicable to resolution

ii. Strengthen legal representation

iii.

Fast -track the pending liquidations

3.

To increase the debt recovery

rate from 20% in 2018 to 30%

by 2023

i. Use of out of court settlements &

ADR

Review of the legal and regulatory

30Strategic Plan


Organizational

Capacity

1.

To review the legal and

regulatory framework

i.

Collaborate for review of laws and regulations affecting KDIC operations

2.

To enhance talent management

i.

Align organization structure with

the strategy

ii.

Enhance staff capacity

iii.

Strengthen performance

management

iv. Enhance staff welfare

v. Deepen k

ii. Implement convenient loan repayment options

iii. Embrace alternative debt disposaloptions

nowledge

3. To entrench a robust

organizational culture

i. Culture change management

ii. Enhance communication

management

iii. Inculcate team spirit among staff


31Strategic Plan


4. To enhance operational

efficiency

i. Enhance availability and utilization

of ICT systems to streamline

business processes


ii. Establish a robust data centre

secured and available network

infrastructure

iv. Entrench and enhance ICT

governance standards

v. Improve efficiency of ICT services

by enhancing staff capacity

vi. Attain and maintain QMS

5. To promote good corporate

governance practices

i. Strengthen governance structures

ii. Strengthen corporate planning

iii. Enhance Enterprise Risk

Management (ERM)

iii. Establish and maintain highly

32Strategic Plan


CHAPTER 5 IMPLEMENTATION PLAN

THEME 1 : RISK MANAGEMENTObjective 1 : To enhance early detection and timely intervention of risk exposure

Expected outcome

Activity Output indicator TimelineResources (Kes M)

2018/9 2019/20 2020/21 2021/22 2022/23Reduced risk exposure

Enhanced confidence in the financial system

i. Stakeholder mapping

Stakeholder database and contact persons

Jan 2019 & continuous

OP

ii. Develop data sharing framework and enter into agreements with

the identified stakeholders (e.g. CBK data sharing MOU)

No. of Agreementssigned

Continuous

OP

No of Agreements

executed

iii.Hold stakeholder meetings/forums

i.No. of meetings/forums

ii.No. of stakeholders participating

Quarterly

2

2

2

2

2

Stable financial system

i. Develop examination tools/templates

Examination tools

June 2019

0.5

0.5

ii. Develop and implement a whistle blowing framework

i. Approved Whistleblowing policy

ii. No. of incidences reported

iii. No. of incidents resolved

June 2019 & continuous

0.5 0.5 0.5 0.5 0.5

Strategy ActorTStrengthen linkages with stakeholders -member institutions, regulatory agencies

GM–R&E

GM–R&E

10 GM–R&E

Strengthen risk-based surveillance

1

2.5 GM–R&E/ CPC/ DGM-

GM–R&E

33Strategic Plan


Objective 1 : To enhance early detection and timely intervention of risk exposureResources (Kes M)

2018/9 2019/20 2020/21 2021/22 2022/23 TExpected outcome Activity Output indicator TimelineStrategy

iii. Establish

data

warehouse

and

undertake

data

analytics

Functional

data

warehouse

system

June

2020

21 49 5 5 5

iv. Build staff

capacity

on

surveillance

June

2019 & continuous

i. No of staff recruited as per establishment

ii. Training Needs Analysis iii. No. of staff trained

OP

i. Identified

intervention

measures

ii. No. of

sensitization

conducted

September 2019 & annually

vi.

v. Sensitization of member

institutions on

compliance and risk management

Profiling

of

member

institutions

Risk register December 2019 & continuous

OP

GM–R&E

DGM-HRA/ GM–R&E

GM–R&E

GM–R&E

85

Actor

34Strategic Plan


Expected outcome

viii.Carry out Examinations – onsite

vii. Carry out

Examinations – offsite

Objective 1 : To enhance early detection and timely intervention of risk exposureResources (Kes M)

2018/9 2019/20 2020/21 2021/22Activity Output indicator TimelineStrategy

Enhance research and data analytics

Approved Research framework

April 2020

2

Operational research function

June 2022

5

5

i. No. of research programmes

ii. No of .

publications (Periodical)

Continuous

0.1 0.1 0.1 0.1

Implement an intervention framework

Develop and implement intervention framework

Approved intervention framework

Continuous

OP

Identify and collate the intervention issues

No of raised issues resolved

OP

Advice member institutions based on risk exposure

i. Exposure report

ii.No. of recommendations implemented

Continuous OP

i. Examination Planii. No. of examination conducted

iii. Examination reports

Annually OP

i. Individual risk profile

ii.Report

Monthly OP

Reliable data for decision making process

Resolved issues established from risk management

i. Develop

research

framework

ii. Build

research

capacity

(staff and

systems)

iii. Implement the research policy

2022/23Actor

T

GM–R&E

2 GM–R&E

10 GM–R&E

0.1 0.5 GM–R&E/HODs

GM–R&E

GM–R&E

GM–R&E

35Strategic Plan


OBJECTIVE 1: To increase the ratio of fund to total deposit from 2.7% in 2018 to 3.4% by 2023

StrategyExpected

outcomeActivity Output indicator Timeline

Resources (Kes M)Actor

2018/9 2019/20 2020/21 2021/22 2022/23 T

Adopt risk

based

premium

model

Increased

premiums

Equitable

assessment

Growth of

the Fund

Reduced risk

exposure

i. Develop the

risk based

assessment

framework

and model

i. Approved model

ii. Implementation

of differential

premium model

December

2019

July 2020

OP

GM–R&E

ii. Hold

stakeholder

consultation

workshops

i. Number of

meetings

ii. Number of

stakeholders

involved

December

2019

0.5

0.5

1 GM–R&E

iii.Member

institution

risk profiling

and

implement

the model

i. Ratings - (15)

ii. Risk register

iii. Amount of

premium

received

December

2019 &

annually

OP

GM–R&E

Prudent

investment

of the Fund

Optimal

investment

mix

Increased

investment

income

Optimal

liquidity

i. Review the

investment

policy

Reviewed and

approved

investment policy

April 2019

OP

DGM -

Finance

ii. Implement

the

investment

policy

Level of

compliance

Continuous OP DGM -

Finance

THEME 2 : DEPOSIT INSURANCE

36Strategic Plan


Objective 2: To increase the value of deposits covered from 8.75% in 2018 to 16% by 2023

Output indicator

Timeline

Resources (Kes M)

Actor2018/9

2019/20

2020/21 2021/22 2022/23 T

Approved coverage

March 2020

OP

GM–R&E

i. Number of stakeholder meeting

ii. Number of reports, hits, andParticipants attendance register

March 2020

2

2 GM–R&E

Strategy Expected outcome

Activity

Review of

coverage

level

Increase in the value of protected deposits

Increased public confidence level

Enhanced financial stability

i.

approval

ii. Undertake

stakeholder

the revised

coverage

Follow up with

the National

Treasury for

sensitization on

37Strategic Plan


Objective 3: To ensure payment of protected deposits is within 30 days

Expected outcome

Activity Output indicator

TimelineResources (Kes M)

2018/9 2019/20 2020/21 2021/22 2022/23 T

Prompt payments of depositors

i. Design and develop a data sharing platform

Functional platform

April 2020 5 5 1.5 1.5 13

ii. Sensitize members on provision of information about nominee accounts and mobile money

No of member institutions sensitised

April 2020

iii.Receive the data from member institution

No of institutions submitting data

Monthly

OP

iv. Validate and update the data from member institutions

Number of accurate (Credible) data

Continuous

OP

Timely reimbursement of protected deposits

i. Develop and implement a payment policy

Approved policy

December 2019

5

5

ii. Develop standard service agreement with the identified service provider(s)

Developed standard agreement

On need basis

OP

GM–R&E/ GM-R

GM-R

Strategy Actor

Ensure availability of accurate deposit data from member institutions

GM–R&E/ GM-R

GM–R&E

GM–R&E

Prompt depositors’ payment

GM-R/CS

38Strategic Plan


iii. Appointment of liquidation agent

Notice of appointment

On need basis

OP CEO

iv. Payment of depositors

No. days taken

On need basis

OP GM-R

Output indicator

Timeline

Resources (Kes M)

2018/9 2019/20 2020/21 2021/22 2022/23 TActorExpected

outcome

Activity

Strategy

Objective 3: To ensure payment of protected deposits is within 30 days

HIGHLIGHTS

PROMPT PAYMENTS OF DEPOSITORS

2018

2023

30days

14 days

INCREASE VALUE OF DEPOSITS COVERED

2018

2023

8.75%

16%

39Strategic Plan


THEME 3: STAKEHOLDER MANAGEMENTObjective 1: To increase public awareness from 9% in 2018 to 40% by 2023

Expected outcome


Timeline

Resources (Kes M)

2018/9 2019/20 2020/21 2021/22 2022/23

Increased understanding of the KDIC’s mandate

i. Produce and

distribute

Information,

Education and

Communication materials

IEC materials distributed

February 2019

15 15 15 15 15

ii. Hold

stakeholders’

forums, road

shows

i. Number of

forums held

ii. Number of stakeholders

trained

April 2019 &

Continuous

9

9

9

9

9

iii. Conduct

electronic and

print and

digital media

campaigns

Number of

media

campaigns

Continuous

100

100

100

100

100

iv. Develop and

implement

Financial

literacy

curriculum

Financial

literacy

curriculum

2019 & continuous

25

25

v. Media

Engagement

i. Number of

forums held

ii. Number of

media

appearances

iii. Media

Coverage

report

Continuous

OP

Strategy ActorT

Enhance

depositor

literacy

75 GM-C

45 GM-C

500 GM-C

50 GM-C

GM-C

40Strategic Plan


Improve

corporate

visibility

Increased visibility

i.

Carryout a

brand Audit

Brand audit report

March 2021

10 10 GM-C

ii.

Develop and

implement a

brand strategy

i. Approved brand strategy

ii. Level of implementation

June 2022 Continuous

30 30 GM-C

Enhance

corporate

social

investment

(CSI)

Increased public awareness

i. Review CSR

policy

CSR policy in

place

March 2019 OP GM-C

ii. Implement

CSR programs

Number of

CSR activities

Continuous 10 10 10 10 10 50 GM-C

Resources (Kes M)

2019/20

2020/21 2021/22 2022/23 ActorT2018/9Expected outcome


Timeline

Strategy

Objective 1: To increase public awareness from 9% in 2018 to 40% by 2023

HIGHLIGHTS

INCREASED PUBLIC AWARENESS

2018

2023

9%

40%

41Strategic Plan


Objective 2: To strengthen complaints handling and consumer protection



TimelineResources ( Kes M)

Actor2018/9 2019/20 2020/21 2021/22 2022/23 T

Enhance service

delivery

Satisfied customers

i. Revise

the

customer

service

charter

Revised customer service charter

February 2019

OP GM-C

ii. Sensitize

staff and

customers

on the

revised

customer

service

charter

Level of awareness of customer service charter

commitments

April 2019

OP

GM-C

iii. Monitor

adherence

to

customer

service

charter

Compliance report

Quarterly

OP

GM-C

iv. Develop

and

implement

a complaint

management system

Time taken to address complaints

OP GM-CFebruary 2019&Continuous

42Strategic Plan


Develop and

implement

consumer

protection policy

and guidelines

A more informed depositor

i.

Benchmarkand

develop

consumer

protection policy.

Consumer protection policy approved for implementation

December

2019

ii.

Disseminatethe

information

and

sensitize

the

consumers

i. Sensitization forums

ii. Resolution passed and agreed

June 2020

GM-C

iii. Implementthe

policy

and

guidelines

Policy and guidelines

Continuous GM-C

GM-C/ CS

Resources ( Kes M)Actor

2019/20

2020/21 2021/22 2022/23 TStrategy Expected outcome


Timeline 2018/9

Objective 2: To strengthen complaints handling and consumer protection

HIGHLIGHTS

TIME TAKEN TO ADDRESS COMPLAINTS/FEEDBACK

Acknowledge receipt

within 3days

Resolve Within5 days

43Strategic Plan


Objective 3: To embrace best practices


Timeline

Resources (Kes M)

Actor2018/9 2019/20 2020/21 2021/22 2022/23 T

Stakeholder

Mapping

Data on stakeholders

June 2019 OP GMs

Enter into

Agreements

with the

stakeholders

Signed Agreements

Continuous GMs

Hosting IADI

AGM and

International

conference

Successful

hosting of

the AGM

and

international

conference

October 2020

100

100 GMs

Participate in international fora

KDIC

representation in

international

fora

Annual 34 37 40.0 44.0 48.0 203 GMs


Strengthen

strategic

alliances

Enhanced capacity

Knowledge and skills transfer

International

branding of

KDIC

i.

ii.

iii.

iv.

HIGHLIGHTS

STRENGTHENING STRATEGIC ALLIANCES

Stronger Partnerships

Participation inInternational Fora

Signing ofAgreements

StakeholderMapping

44Strategic Plan


THEME 4: PROMPT RESOLUTION

Objective 1: To ensure decision is made on the most appropriate resolution option within 60 days by 2023 for non- systemic institutions

Expected

outcome

Activity

Output

indicator

Timeline

Resources (Kes M)

Actor2018/9 2019/20 2020/21 2021/22 2022/23 T

resolution

i.

Review the

resolution

policy and

procedure

guidelines

New

resolution

policy

framework in

place

June

2019

2 2 GM -R

ii.

Hold

consultation

forums with key

stakeholders

i. No. of forums held

ii. No. of stakeholders participating

June

2019 &

bienni al

GM -R

iii.Constitute a

Resolution

Advisory

Committee

(RAC)

A functional

committee

June

2020

0.5 0.5 0.5 0.5 2 CEO/GM

R

resolution

mechanism

i. Document the

past resolution

experiences

A reference

handbook

June

2020

0.5 0.5 1 GM -R

ii. Share past

experiences

during

resolution

processes

Time taken

during

resolution

On need

basis

OP GM -R

Strategy

Implement a

robust

resolution

framework

Timely /CS

-

Develop a

database of

past

resolution

experiences

for future

references

Faster

45Strategic Plan


Objective 1: To ensure decision is made on the most appropriate resolution option within 60 days by 2023 for non- systemic institutions

Hold

stakeholders’

forums with

safety net

players

i. No. of forums held

ii. No. of participants

March 2019 Going Forward

0.5 0.5 0.5 0.5 0.5 2.5 GM -R

Develop and

implement SLAs

on data sharing

Duly

executed SLAs

&agreement

March

2019 &

continuous

OP

Develop an

information

sharing platform

Data

Warehouse

March

2019

GM -R/

DGM -ICT

Undertake

benchmarking

studies in other

countries and

implement

recommendations

i. Bench marking reports

ii. Number of

implemented

recommendat-

ions

July 2019

&

continuous

10 10 10 10 10 50 GM -R

GM-R/ DGM- Legal

Collaborate

with other

Safety Net

Players and

other

government

agencies (e.g.

Central

Banks, CMA,

IRA, SASRA ,

KRA )

Prompt

resolution

Timely

information

sharing

i.

ii.

iii.

iv.




Actor2018/9 2019/20 2020/21 2021/22 2022/23 T

HIGHLIGHTS

TIMELY INFORMATION SHARING

InformationSharing Platform

Benchmarking

TIMELY DECISION OF RESOLUTION OPTION

60 Days

46Strategic Plan


Objective 2: To ensure effective and efficient receiverships/liquidations

Expected outcome


2018/9 2019/20 2020/21 2021/22 2022/23 T

Expeditious

resolution

i. Identify

sections in

the Act and

regulations

that require

review

Report on

sections/regulations

to be amended

December

2019

OP

ii. Draft

proposals to

amend the

law

Draft proposals

submitted to

Treasury

June 2020

1

1

iii. Presentations

of the draft

proposal to

all the

relevant

stakeholders

for buy-in

Stakeholder

forum held

December

2020

2

2

Effective

and

efficient

turnaround

times

i. Profile and

vet legal

service

providers for

institutions

Profiles report

December

2019

OP

ii. Develop and

execute SLAs

with the

profiled legal

service

providers

Number of SLAs

executed

June 2020

OP

iii. Recruit

additional

legal officers

No. of legal

officers

supporting

resolution

June 2020 OP

Strategy Actor

Review of

the legal

and

regulatory

framework

applicable

to

resolution

GM -

R/DG

M-

Legal

DGM

-Legal

GM -

R/

DGM

-Legal

Strengthen

legal

representat-

ion

DGM

-

Legal/

GM -R

DGM-Legal/ GM-R

GM-R/ DGM-Legal/ DGM-HRA

47Strategic Plan


Objective 2: To ensure effective and efficient receiverships/liquidations

i. Monitoring

of court cases

Case profiles &

Quarterly status

updates

Continuous OP

Winding

pending

institutions

i. Undertake a

status review

of all

institutions in

liquidation to

identify

possible

candidates

Status report of

institutions in

liquidation

June 2019

OP

ii. Develop and

implement a

wholesale

portfolio

discounting

policy of

outstanding

loans/ assets

to third

parties

i. Approved

portfolio

discounting policy

ii. Portfolio value

iii. No. of institutions wound up

June 2020

June 2023

2.5

2.5

5

iii.Develop

and

implement an

out of court

settlement

policy

guideline for

cases

i. Out of court

settlement policy

guideline

ii. No. of Cases

settled out of

court

iii. No. of institutions wound up

June 2019

June 2023

OP

OP


2018/9 2019/20 2020/21 2021/22 2022/23 TExpected outcome

Strategy

GM -

R/DG

M

Legal

Fast-track

the

pending

liquidations

GM -R

GM -

R/CS

GM -R

/DG

M -

Legal

Actor

up of

48Strategic Plan


Objective 3: To increase the debt recovery rate from 20% in 2018 to 30% by 2023



TimelineResources (Kes M) Actor

2018/9 2019/20 2020/21 2021/22 2022/23 T

Use of out

of court

settlements

& ADR

Increased

collections

i. Pursue

arbitration

process

i. Number of

cases

successfully

negotiated

ii. Value of

debts

collected

through out

of court

negotiations

Continuous 0.5 0.5 0.5 0.5 0.5 2.5 GM -

R/DGM -

Legal

ii. Undertake

staff training

on

mediation &

negotiation

skills

No. of staff

trained

June 2021

GM -R

/DGM -

HR

Implement

convenient

loan

repayment

options

Increased

collections

i. Identify

alternative

repayment

channels

No. of

alternative

repayment

channels

identified

June 2019 OP

GM -R

ii. Sign

agreements

with

providers of

alternative

payment

channels

No. of

agreements

signed

OP

GM -R/

DGM -F/

DGM -

Legal

iii.Create

awareness

on

alternative

payment

channels

Level of use

of alternative

payment

channels

June 2021 &

continuous

5 2 2 9

December 2020

GM-R/ GM-CS

49Strategic Plan


Objective 3: To increase the debt recovery rate from 20% in 2018 to 30% by 2023

Develop a

debt

factoring

policy

Debt

factoring

policy in

place

December

2019

GM -R/

DGM -

Legal

Implement

the debt

factoring

policy

i. Level of

implementation

ii. No. & value of debts collected

June 2020

OP

GM -R

Execute

SLAs with

debts

collectors

No. of

executed SLAs

July 2019 OP GM -R

/DGM -

Legal

Output indicator


Actor2018/9 2019/20 2020/21 2021/22 2022/23 TStrategy Expected outcome

Embrace

alternative

debt

collection

options

Increased

collections

i.

ii.

iii.

Activity

HIGHLIGHTS

INCREASED DEBT RECOVERY / COLLECTION

2018

202320%

30%

50Strategic Plan


THEME 5: ORGANIZATIONAL CAPACITYObjective 1: To have a supportive legal and regulatory framework



TimelineResources (Kes M) Actor

2018/9 2019/20 2020/21 2021/22 2022/23 T

Collaborate for review of laws and regulations affecting KDIC operations

Faster Resolutions

Reduced Litigations cost

Good Reputation

Undertake an audit of existing legal framework

to identify areas of review

Legal framework audit report

April 2019

5 5 DGM-Legal

Liaise with legal experts for drafting of the Bill

Draft Bill

June 2019

5

5 DGM-Legal

Hold stakeholders’ consultation fora

i. No. of stakeholders participating

September 2019

10

10 DGM-

Legal

Draft Cabinet Memorandum

ii. Draft Cabinet Memo developed and submitted for discussion

December 2019

OP

DGM-Legal

Engage legislators for enactment of the Bill

iii. No. of meetings with legislators

iv. Enactment of the Act

January 2020

DGM-Legal

51Strategic Plan


www.depositinsurance.go.ke

Objective 2 : To enhance talent management

StrategyExpected outcome Activity Output indicator Timeline

Resources (Kes M)

2018/9 2019/20 2020/21 2021/22 2022/23 T

Align organization structure with the strategy

Increased productivity

i. Undertake organizational structure review

Revised organizational structure

March 2019

OP DGM-HRA

ii.

Recruitment of staff

No. of staff recruited

June 2019

8

8

5

5

5 31

iii.

Implement the revised structure and staff establishment

Optimal staff establishment in place

December

2019

327

517

568

625 688 2725

Enhance staff capacity

Improved staff competencies, skillsand productivity

i.

Undertake Training Needs Assessment (TNA)

TNA report

Approved February 2019 & biennial

OP

DGM-HRA / HODs

ii.

Prepare a Corporate Training Plan

Annual Corporate

Training Plan (CTP)

February 2019 & biennial

OP

DGM-HRA / HODs

iii.

Implement approved Corporate Training plan

i. No. of trained staff

ii. Back-to-office report

As per Training plan

72

79

87

96 105 439 DGM-HRA/ HODs

DGM-HRA

iv. Undertake training impact assessment

Training impact assessment reports

Bi-annually OP

Actor

DGM-HRA

DGM-HRA

52Strategic Plan


Strengthen performance management

Increased staff productivity

Enhanced staff motivation and retention

i. Review the performance management system

Approved reviewed Performance Appraisal tool

June 2019 OP DGM-HRA

ii.

Develop and implement a rewards/ incentives and recognition programme

i. Approved reward/ incentive and recognition system

ii. Level of employee

Satisfaction

June 2019 & continuous

0.5

30

33

36 40 139.5 DGM-HRA

iii.

Undertake performance evaluations

Performance evaluation reports

Bi-Annual & Annual

OP

DGM-HRA/ HODs

Improve staff welfare

Improved staff engagement and service delivery

Staff retention and bonding

Improved staff loyalty

i.

Establish staff welfare Sacco

Operational staff welfare Sacco

December 2019

OP

ii.

Establish a staff Benevolent Scheme

Staff benevolent fund in place

December 2019

2.3

2.4

2.5

2.6 2.7 12.5

iii. Establish a Pension Fund for permanent and pensionable staff

Pension Fund March 2019

22 24 26 29 32 133 DGM-HRA

iv. Establish a fund to facilitate staff loan facilities

Staff Fund for loan facilities

March 2020

747 400 400 1,547 DGM-HRA

DGM-HRA

DGM-HRA

Objective 2 : To enhance talent managementExpected outcome Activity Output indicator Timeline

Resources (Kes M)

2018/9 2019/20 2020/21 2021/22 2022/23 TActorStrategy

53Strategic Plan


i. Review staff medical insurance and other staff insurance covers (GPA, WIBA, GLA, Professional indemnity, etc)

Enhanced staff Medical Scheme and Staff Insurance Covers

July 2019 31 34 38 41 45 189

ii. Undertake employee satisfaction/ engagement and work environment survey

Employee satisfaction/ work environment reports

Annually

1

1.05

1.1 1.2 4.35

iii. Implement recommend-ations of the various surveys

Level of implementation

Continuous

0

1

1.05

1.1 1.2 4.35

Informed employee

Protected Institutional memory

i. Operationalize the Resource Centre

Staff Resource Centre in place

February 2020

5

2

2

2 2 13

ii. Build strategic alliances with relevant institutions for knowledge sharing

Knowledge Management framework

February 2020

0.5 0.55 0.6 0.67 0.73 3.05

Objective 2 : To enhance talent managementExpected outcome Activity Output indicator Timeline

Resources (Kes M)

2018/9 2019/20 2020/21 2021/22 2022/23 TActorStrategy

DGM-HRA

Deepen knowledge management

DGM-HRA

DGM-HRA

DGM-HRA/HODs

DGM-HRA/HODs

54Strategic Plan


Objective 3: To entrench a robust organisational culture

Expected outcome



Actor2018/9 2019/20 2020/21 2021/22 2022/23 T

Smooth transition

improved Corporate Culture

i. Carry out a baseline survey on the current KDIC culture

Baseline survey report

September 2019

1 1 2

ii. Identify the new/ desired culture

Culture change programme

December 2019

iii. Design and implement a change management programme for all staff to align to Corporate values, Vision and Mission

No. of staff trained

March 2020

15

5.5

4.0

10 34.5

iv. Organize staff motivational talks held

No. of motivational talks held

February 2019 & quarterly

0.4 0.48 0.53 0.58 1.99

Improved internal

external communica-

i. Develop and implement

corporate communication policy

Approved Communica-tion Policy

July 2019

OP

GM

ii. Implement the corporate communication policy

Level of implementa-tion

July 2019 GM

DGM-HRA

DGM-HRA

DGM-HRA

DGM-HRA

Strategy

Culture change management and

Enhance communication

and

tion

-C/CS

-C

55Strategic Plan


Inculcate team spirit among staff

Increased team work and synergy

i. Develop and implement team building programmes

i. No. of Team building events held

ii. No. of staff participating

Annual 4 4.4 4.8 5.3 5.9 24.4

ii. Organise for bonding activities e.g. Sports and fun days, end of year staff get -together

i. No. of sports & fun day

ii. End of year Get- together

iii. Number of staff participating

Annual 8 16 17.6 19.4 21.3 82.3

DGM-HRA

DGM-HRA

Resources (Kes M)Actor2019/20 2020/21 2021/22 2022/23 T

Objective 3: To entrench a robust organisational culture

Expected outcome


Timeline2018/9

Strategy

HIGHLIGHTS

Corporate Culture

ImprovedCommunication

Team Work Team BuildingSessions

56Strategic Plan


Expected outcome



2018/9 2019/20 2020/21 2021/22 2022/23 T

Improved operations efficiency

i. Review status of the ERP system implementation and utilization

Automation gap report

April 2019 0.4 0 0.3 0.3 0.3 1.3

ii. Upgrade and Implement the current ERP to web based

i. Functional web-based system in place

ii. Functional business intelligence and data analytics

June 2020

0 50 10 10 10 80

iii.Maintain licensed software

i. Genuine software asset register

ii.Service level agreements

June 2020

15

15

20

20

20 90

iv.Implement teammate software

Efficient and effective audit processes

June 2019

4

0.5

0.5

0.5

0.5 6

v. Enhanced usage of e-board system

Corporate wide access of E-board systems

June 2019

1.2

1.2

1.2

1.2

1.2 6

vi.SharePoint and customer service portals

Functional Web based intranet

June 2020

0.5 0.5 0.5 0.5 0.5 2.5

VII.Revamp existing website

Interactive website

June 2019 2 0.2 0.2 0.2 0.2 2.8

Objective 4: To enhance operational efficiency

Strategy Actor

Enhance availability and utilization of ICT systems to streamline business processes

DGM-ICT

DGM-ICT

DGM-ICT

DGM-ICT

DGM- ICT

DGM- ICT

DGM-ICT/ DGM-Audit

57Strategic Plan



ptimization

availability of

nhanced data security and integrity.

i. Design and implement data centre

Functional data Secured organizational data

June 2019 60 15 15 15 15 120 DGMICT

ii.

Deploy security controls for data centre

Secured data centre

June 2019

0.5

0.5

0.5 0.5 2 DGMICT

iii.

Develop ICT security policy

Implemented ICT security policy

June 2019

DGMICT

Stable and secured network infrastructure.

i.

Design and deploy a robust network to support business

i. Functional and maintained LAN and WAN

ii. Maintenance contracts

iii. Service level agreements

June 2019

45

2

1

1 1 50 DGMICT

ii.

Deploy network monitoring tool

Improved network performance and security

June 2020

5

0.7

0.7

0.7 0.9 8 DGMICT

iii.Acquire new ICT devices

No. of new ICT equipment

ICT equipment disposal list

June 2021 15 7 7 7 7 43 DGMICT

Expected outcome



2018/9 2019/20 2020/21 2021/22 2022/23 TActorStrategy

Establish a robust data Centre

Oand

data

E

-

-

-

Establish and maintain highly secured and available networkinfrastructure

-

-

-

58Strategic Plan


iv. Develop and implement ICT equipment maintenance schedule

ICT maintenance schedule

June 2019 2 2 2 2 2 10

v.

Develop and implement ICT helpdesk system

Effective and efficient resolutions of ICT user challenges

March 2019

1.5

0.5

0.5

0.5 0.5 3.5

Enhance ICT governance standards

i.

Conduct compliance audit and implement the

recommendations audit

Compliance report

June 2019

0.5

0

1

0 1 2.5

ii.

Develop, disseminate and enforce policies in line with ICT standards and best practice

Reviewed ICT policy

June 2021

0

0.5

1

0 0.5 2

iii.

Align ICT risk management framework

ICT risk assessment report

Annually

0

1

1

1 1 4

Improved staff capacity

i. Build staff capacity for deployed systems

Skills gap reportAnnual training programme

June 2020

3 3 3 3 3

ii. Undertake ICT training for systems end users

i. Training needs assessment report

ii. Number of staff trained

June 2020

Expected outcome



2018/9 2019/20 2020/21 2021/22 2022/23 T


Strategy Actor

DGM-ICT

DGM-ICT

Entrench and enhance ICT governance standards

DGM-ICT

DGM-ICT/CS

DGM-ICT

Improve efficiency of ICT services by enhancing staff capacity

DGM-HRA

DGM-HRA

59Strategic Plan


Attain and maintain QMS

Improved processes and procedures

i. Undertake staff training and sensitization

No. of staff trained/ sensitized

December 2018

ii. Engage ISO auditors for auditing and approval of operating procedures

Approved Operational Procedures Manual

June 2019

1

1

1

1

1 5

iii. Apply for ISO 9001:2015 and ISMS 27001: 2013 certifications

KDIC ISO and ISMS certified

June 2019

1

1

1

1

1 5

iv. Carry out continuous improvement of

the OPs

Maintain ISO certification

Annually 0.5 0.5 0.5 0.5 0.5 2.5 DGM ICT/HODs

DGM-S&C

DGM-S&C

DGM-HRA

Output indicator


2018/9 2019/20 2020/21 2021/22 2022/23 T


ActorExpected outcome

Activity Strategy

60Strategic Plan


Expected outcome Activity

Output indicator Timeline

Resources (Kes M)

2018/9 2019/20 2020/21 2021/22 2022/23 T

A transparent

accountable

system of

service delivery

Improved

credibility and

compliance to

government

regulations

i. Carry out Board

training

No. of Board

members

trained

Annual 16 20 20 25 25 106

ii.

Senior

management

training on

governance

Senior

management

trained on

Governance

Annual

iii. Conduct Board evaluation

Board Evaluation report

Annual

OP

iv.Develop andimplement Board charter

Approved Board Charter

March 2019

OP

v. Constitute

Board committees

Committee minutes

OP

vi. Establish Officeof Board secretary &Internal audit

Fully established units

June 2019

vii. Undertake legal and governance audits

Legal audit reportLevel of compliance

% of recommendations implemented

Biennial

viii. Implement legal and % of recommendati-ons governance audits implemented recommendations

Continuous

March 2019 & continuous2019 &

Objective 5: To promote good corporate governance practices

Strategy Actor

Strengthen

governance

structures

and

DGM Legal/ CEO

DGM Legal/ HODs/ CEO

DGM Legal/ CEO

DGM Legal/ CEO

DGM Legal/ CEO

DGM-HRA

DGM Legal/ CEO

DGM Legal/ CEO

61Strategic Plan


Objective 5: To promote good corporate governance practices

Enhance Enterprise Risk Management (ERM)

Reduced corporate risk exposure

Enhanced business continuity

i. Develop an Enterprise Risk Management Framework.

Approved ERM framework

June 2019

3

3

ii. Sensitize staff on ERM framework

No. of staff

sensitized

September

2019

&

biennial

OP

iii. Implement the Enterprise Risk Management Framework

i. % of implementation of the framework

ii. No. of incidences

reported

January 2020

OP

iv.Develop and implement a business continuity and recovery plan

i. An operational business continuity and disaster recovery plan

ii. Level of implementation

June 2020

5 5

Strengthen corporate planning

Improved budget utilizationImproved compliance to the approved budgetary allocations

i. Develop departmental Work plans aligned to the Corporate strategy

Approved Work plans

Annual OP

ii. Develop budget aligned to the departmental work plans

Approved Corporate Budget

Annual OP

iii. Undertake periodic M&E

M&E reports

Level of budget utilization

Quarterly

OP

DGM-S&C

DGM-S&C

DGM-S&C

DGM-S&C

DGM-S&C

DGM-Finance/ CEO

DGM-S&C/ HODs

Expected outcome Activity

Output indicator Timeline

Resources (Kes M)

2018/9 2019/20 2020/21 2021/22 2022/23 TStrategy Actor

62Strategic Plan


INSTITUTIONAL STRUCTURE6.1 BOARD OF DIRECTORSThe Board of Directors is responsible for providing overall leadership and policy direction in the strategic, financial and operational matters of the Corporation. To efficiently discharge its role, the Board will be assisted by the following Committees:

i) Technical Committee;ii) Finance, Administration & Human Resources Committee; and;iii) Audit Committee.

6.2 CHIEF EXECUTIVE OFFICERThe Chief Executive Officer has the responsibility of ensuring proper and efficient management of the day-to-day operations of the Corporation under the policy guidance of the Board of Directors.

6.3 DIRECTORATES AND DEPARTMENTSTo achieve its mandate, KDIC has three Directorates namely: Risk and Examination, Resolutions and Corporate Services Directorates. Each directorate is headed by a General Manager who reports to the Chief Executive Officer. The departments under each directorate are:

a) Risk & Examination Directoratei) Risk & Surveillance;ii) Examination; andiii) Policy & Research.

CHAPTER 6

63Strategic Plan


b) Resolutions Directoratei) Receivership;ii) Liquidation; andiii) Investigation.

c) Corporate Services Directoratei) Finance & Accounts;ii) Human Resource & Administration;iii) ICT; and;iv) Communication and Consumer Protection.

In addition, the Corporation has a Strategy & Compliance Department, Corporation Secretary/Legal and Supply Chain Management which reports directly to the Chief Executive Officer. Further, there is an Internal Audit department which reports functionally to the Board and administratively to the Chief Executive Officer.

The Corporation's organogram is presented in Section 6.4.

64Strategic Plan


Strategy &

Compliance

Fund

Investment

Supply Chain

Management

Internal

Audit

Corporation

Secretary/ LegalStrategy and

Compliance

Performance

Management

Policy &

Planning

Enterprise and

Risk

Management

Corporate

Services

Directorate

Finance &

AccountsInternational

Affairs

HR &

Administration

ICT

Communications/

Consumer

Protection

Resolutions

Directorate

Receivership

Liquidation

Investigation

Risk &

Examination

Directorate

Policy &

Research

Examinations

Risk &

Surveillance

Board of

Directors

Chief

Executive

Officer

4. KDIC ORGANOGRAM

Figure 4: KDIC Organogram

65Strategic Plan


MONITORING, EVALUATION AND REPORTING

7.1 OBJECTIVES OF MONITORING, EVALUATION AND REPORTINGMonitoring the implementation of the Strategic Plan constitutes systematic tracking of activities and actions to assess progress. Progress is measured against specific targets and schedules included in the plan. This is followed by analyzing and reporting of information to various users. This helps them to remain alert to any short-falls or deviations and taking early corrective action. Effective monitoring also helps to identify difficulties and problem areas, and to take immediate remedial action, thereby ensuring that targets are achieved. Regular reporting at all levels is necessary for follow-up and record keeping. The following ME&R framework will be put in place by the Corporation in order to ensure effective implementation of the Strategic Plan.

7.2 MONITORING, EVALUATION AND REPORTING (ME&R) STRATEGIES7.2.1 ME&R CommitteeThe senior management comprising of the Chief Executive Officer, GMs and Heads of Department, will constitute the ME&R committee to oversee the implementation of the Strategic Plan. To facilitate this, data and information collection guide and processes will be developed to measure performance in each department as per the indicators and report to management.

The Committee will meet monthly to ensure that strategies are being implemented, performance is being measured, progress reports are made and discussed, and corrective action is taken where necessary. The ME&R Committee will be reporting quarterly to the Board on the progress of the Strategic Plan implementation.

CHAPTER 7

66Strategic Plan


7.2.2 Cascading of the Plan to all StaffTo enhance implementation, the Strategic Plan will be cascaded all the way to the lowest positions to help each member of staff to understand their role in execution of KDIC mandate. The General Managers will be responsible for cascading the Tier I (Corporate) Plan within their respective Directorates while Deputy General Managers will be responsible for cascading the Tier II (Departmental) Plan. The Deputy General Manager will ensure development of Tier III (Individual) work plans and the targets (key performance indicators) that will be measured in the KDIC Performance Management Appraisal System (PMAS).

7.2.3 Mid-Term ReviewA midterm review of the Strategic Plan will be undertaken to ensure that necessary changes in the objectives, strategies, activities among others are effected and informed by new information regarding the Corporation or the operating environment.

Note:i) Deputy General Manager, ME&R Strategy & Compliance will coordinate .ii) The key performance indicators in section 7.2 will provide guidance on more objective review of the

progress of the Strategic Plan implementation. he Corporation will utilize the BSC-based Further, tperformance management system to link operational actions with the strategic goals. The BSC framework will provide the following benefits:

a) Set strategic milestones; b) Link reward to performance measures; andc) Provide feedback for strategy review and learning.

67Strategic Plan


7.3 KEY PERFORMANCE INDICATORSTable 9 shows the projected key performance indicators (KPIs) for financial and non-financial targets set for the financial year 2018/19to 2022/23.

0 100

KPI

OBJECTIVE MEASUREMENT OPTIMIZATION STRATEGY PERFORMANCE

.........................................................................................................................................

......................................................................

...........................................................

...........................................................

......

......

......

......

......

......

......

......

......

......

......

......

.

..................................................................

EVALUATION

......................................................................

68Strategic Plan


Table 8: Key Performance Indicators

Perspective Objectives KPIs Unit 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23

Finan

cial

Fund/Insured Deposits % 8.75 12.77 13.58 14.53 15.27 16.00

Deposit accounts coverage % 96.70 96.70 96.70 98 98

Fund/Total Deposits % 2.7 2.98 3.07 3.17 3.27

Growth of fund % 2.56 2.73 2.92 3.07 3.21

Revenue from investments/ total investment

%10.3 10.7 10.6 10.5 10.5 10.5

Increase the debt recovery rate from 20% in 2018 to 30% by 2023

Debt recovery rate % 20 22 24 26 28

Cust

om

er

To ensure payment of protected

deposits within 30 days

Payment of depositors’ turnaround time

Days

30 30 30 14 14

Customer Satisfaction Index

%

65 65 67 69 71

To increase public awareness

levels from 9% in 2018 to 40%

by 2023

Public Awareness Index

%

9 20 25 30 35

Inte

rnal

Pro

cess

es

To enhance operational

efficiency

Level of ICT systems utilization

%

30 30 40 50 60

Total Operational cost /Total revenue ratio

%

2.6 7.6 25.0 25.0 25.0 25.0Staff costs to total revenue

%

2.4 4.1 12.3 11.9 11.5Other operating costs/ total cost

%51.9 45.8 50.8 52.2 53.9 55.6

Staff costs/ total costs % 48.1 54.2 49.2 47.8 46.1 44.4Compliance with QMS % X% 100% 100% 100% 100% 100%

To ensure effective and efficient Time taken for resolution decision to be made (Resolutions Cycle time).

Days 90 60 60 60 30

To enhance talent management Employee Satisfaction Index % X0 % X1+1 %

X2+2 %

X3+2 %

X4+1 %

X5+1%

Staff Development % of staff trained

46.3 60 80 100 100

Staff productivity Index % X%

Average number of training hours per employee

Hrs. 25 30 35 40 45

Student on Internship/Apprenticeship

Nos 25 16 16 16 16

receiverships/ liquidations

Lear

nin

g a

nd g

row

th

To increase the value of deposits covered from 8.75% in 2018 to 16% by 2023

To increase the ratio of fund to total deposit from 2.7% in 2018 to 3.4% by 2023

BSC

98

3.4

30

14

73

40

70

11.1

30

100

50

16

69Strategic Plan


7.4 ACCOUNTABILITY AND RISK7.4.1 Accountability and Key assumptionsTimely deployment of resources, effective monitoring, evaluation and reporting of the implementation status will be critical for KDIC to have the intended impact of instilling confidence in the financial sector. To enhance implementation of the plan, the following will be critical: i) Stakeholders engagement to ensure effective sharing of information and adoption of best practices.ii) That the Corporation will have adequate and skilled staff in all functional areas including full

implementation of the approved organization structure. iii) Assigning and communicating roles and responsibilities to the various implementing actors

(Cascading)iv) That the proposed annual budgets estimates shall be approved and allocating adequate resources

as per prioritized activities in the Plan.v) Ensuring annual work plans and performance contracting parameters are derived from the

Strategic Plan.vi) Building staff capacity to implement the strategy. vii) Implementing an organizational culture change programme.viii) That development partners will provide technical and financial support for implementation of

planned programmes. ix) That there will be economic and political stability in the country.x) That the proposed review of coverage and the premium levy will be approved.xi) That the rate of interest on Government securities will be maintained.xii) That all the identified risks shall be mitigated.

70Strategic Plan


7.4.2 Risk AnalysisImplementation of this Plan is prone to various risks among them, strategic, operational, financial, technological, political governance and, leadership. Table 10 summarizes the potential risks identified, level of risk and subsequent mitigation measures:

Table 9: Risk Analysis No

Risk Area

Risk Identified

Mitigation Measure

Level of

Risk

1

Strategic Risk

i.

Stakeholders’ opposition

to some of the proposed

programmes/ activities

·

High

ii.

Weak monitoring,

evaluation & reporting

·

Establish ME&R Committee

·

High

2

Operational risk

i.

Lack of support from key

internal stakeholders

·

·

Sensitize internal stakeholders on the

plan

Medium

ii. Inadequate human

capital

· Recruit skilled staff High

iii. Lack of synchronization

work plans, budgets and

procurement plans

· Adopt activity base budgeting High

Cascade the Strategic Plan to all

internal stakeholders

Review the Strategic Plan periodically

Seek effective collaborations and sharing of the Strategic Plan, proposed changes with stakeholders

71Strategic Plan


No Risk Area Risk Identified Mitigation Measure Level of

Risk

iv.

Overlapping/conflicting

legal framework

·

Review of the legal framework High

3

Financial Risk

i.

Delay in approval of

budgets

·

Adequate planning Low

ii.

Misappropriation of

funds

·

Enhance prudential financial

management

Low

4 Technological

risk

i. Inability to keep abreast

with the rapid

technological

advancements

· Deployment of emerging

technologies

High

ii. Low adoption of new

technological changes by

staff

· Train staff regularly on new

technological advancements adopted

by the Corporation

High

5 Political risk High

6 Reputational

risk

· Create awareness of the KDIC

mandate

HighLack of stakeholder awareness of KDIC mandate

Monitor the political climate regularly and advice member institutions

Political instability in the country

The corporation will develop a dashboard to support in monitoring the occurrence of the risks identified and effectiveness of the identified mitigation measures.

72Strategic Plan


ISO 9001:2015 CERTIFIED

73Strategic Plan


Kenya Deposit Insurance CorporationUAP Old Mutual Tower, Upperhill Road 17th Floor , P.O. Box 45983-00100, Nairobi, Kenya .

Tel: +254 20 66 77 000, +254 709 043 000 Email: [email protected] www.kdic.go.ke

CORE VALUES

• rofessionalism P • ntegrityI • ustomer FocusC • airness F • nnovativenessI • eamworkT

MISSIONTo promote public confidence in the financial system through deposit insurance,

risk management and timely resolution

VISIONTo be a premier deposit insurance scheme

DEPO

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IN

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OLD

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MA

NA

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EN

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AT

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AL

CA

PAC

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PR

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RESO

LUT

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RIS

K M

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EN

T

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