{
  "id": 2628562,
  "title": "Kenyan businesses turn to cash as high loan costs curb borrowing, CBK survey shows",
  "url": "https://urgent.news/2026/08/22/kenyan-businesses-turn-to-cash-as-high-loan-costs-curb-borrowing-cbk",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-08-22T19:04:11.000Z",
  "source": {
    "name": "People Daily Kenya",
    "slug": "people-daily-kenya",
    "url": "https://peopledaily.digital/business/kenyan-businesses-turn-to-cash-as-high-loan-costs-curb-borrowing-cbk-survey-shows"
  },
  "original_language": "en",
  "account": "Kenyan businesses are showing a cautious approach to borrowing, as high operating costs, consumer spending, and lending conditions deter them from taking on more debt, according to the Central Bank of Kenya (CBK). The Central Bank of Kenya's July 2026 Market Perceptions Survey highlights a combination of factors contributing to this trend, including relatively high lending rates, stringent lending conditions, weak business activity, and uncertainty over the economic outlook. Some firms prefer financing operations using their own cash instead of increasing reliance on external borrowing. Despite this, banks anticipate private-sector credit growth to reach 9.9 percent in 2026, suggesting demand will persist. However, demand for credit among non-bank private-sector firms is expected to remain stable over the next 12 months, with businesses primarily seeking financing for working capital, inventory replenishment, and day-to-day operations. Some firms are opting for retained earnings, existing cash flows, and other internal resources rather than external financing. Factors such as high inflation, reduced consumer spending, elevated fuel and energy prices, and geopolitical tensions are adding to the pressure on businesses. Banks expect credit growth to be supported by lower lending rates, strategic loan-book expansion, digital financial innovation, improving conditions in manufacturing, construction, and hospitality, and targeted financing for micro, small, and medium-sized enterprises. The survey reveals a divide in Kenya's credit market, with banks prepared to lend more while businesses remain cautious about borrowing. While firms may need additional funds for operations, replenishing stock, or expansion, they face uncertainty over future revenues justifying the cost of borrowing. Despite this, banks remain optimistic about credit growth, but businesses prioritize preserving liquidity and selectively borrowing for activities with higher returns.",
  "summary": "Kenyan businesses are becoming more selective about borrowing, with some firms choosing retained earnings and existing cash flows over bank loans as high operating costs, cautious consumer spending, and lending conditions weigh on demand for credit, according to the Central Bank of Kenya (CBK). Why are Kenyan businesses avoiding more debt in 2026? The July […]",
  "key_points": [
    "Kenyan businesses hesitant to borrow due to high costs and conditions",
    "CBK survey shows businesses prefer using cash over external loans",
    "Credit growth expected at 9.9% in 2026 despite cautious borrowing"
  ],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}