MSMEs borrow Ksh245.1B in the first half of 2026
Kenya’s banking industry advanced Ksh 245.1 billion in new loans to micro, small and medium enterprises (MSMEs) during the first half of 2026, as lenders increased financing to businesses seeking capital for expansion, operations and job creation. The Kenya Bankers Association (KBA) said lending to MSMEs rose steadily in the six months to June, reflecting […]
During the first half of 2026, Kenya's banking industry provided Ksh 245.1 billion in new loans to micro, small and medium enterprises (MSMEs). The Kenya Bankers Association (KBA) reported a steady rise in financing activity to MSMEs. The top lenders included Equity Bank (Ksh 82.3 billion), Co-operative Bank (Ksh 32.4 billion), KCB (Ksh 26.4 billion), Family Bank (Ksh 21.6 billion) and NCBA (Ksh 17.7 billion).
As of June 2026, the total outstanding value of MSME loans across financial institutions was Ksh 590.3 billion. Male-owned businesses received 73% of the outstanding loan portfolio, while female-owned businesses received 27%. The non-performing loan (NPL) ratio for MSMEs stood at 24.5%, with female-owned enterprises having a higher ratio of 26.4% compared to male-owned enterprises at 25.5%.
Agriculture sector loans had an NPL ratio of approximately 26.1%, indicating higher repayment risks. KBA CEO Raimond Molenje called for a uniform five per cent reduction in Pay-As-You-Earn (PAYE) tax across all income bands to boost consumer spending and create stronger demand for goods and services. He estimated that such a reduction could release more than Ksh28.1 billion annually into the economy, generate up to Ksh42 billion in immediate GDP output, support over 36,000 jobs, unlock at least Ksh 140 billion in formal lending capacity, and generate additional government revenue between Ksh27.1 billion and Ksh31.5 billion.
Written by urgent.news from People Daily Kenya's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
