NAIROBI, Kenya, Aug 21 – Kenyan banks disbursed Sh245.06 billion in new loans to Micro, Small and Medium Enterprises (MSMEs) in the first half of 2026, as lower interest rates supported demand for credit.
Data from the Kenya Bankers Association (KBA) shows Equity Bank led lending to small businesses with Sh82.3 billion, followed by Co-operative Bank with Sh32.4 billion and KCB with Sh26.4 billion.
Family Bank disbursed Sh21.6 billion, NCBA Sh17.7 billion, I&M Bank Sh13.9 billion, Absa Bank Sh12.9 billion, Kingdom Bank Sh7.8 billion, DTB Sh7.4 billion and National Bank Sh5.1 billion.
The increase in lending came after the Central Bank of Kenya cut the Central Bank Rate (CBR) from nine percent to 8.75 percent in February 2026 to support private-sector credit growth while containing inflationary pressures.
The CBK has since maintained the CBR at 8.75 percent, citing stable inflation, increased lending to businesses and a stable exchange rate.
In its August Monetary Policy Committee meeting, the CBK said commercial banks’ credit to the private sector grew 10.2 percent in July 2026, compared with 10.6 percent in June and a contraction of 2.9 percent in January 2025.
“Growth in credit to key sectors of the economy, particularly trade, building and construction, agriculture, and consumer durables remained strong, reflecting improved demand for credit in line with the decline in lending interest rates,” the CBK said.
Average commercial bank lending rates declined to 14.3 percent in July from 14.4 percent in June and 17.2 percent in November 2024.
The latest figures indicate continued easing in borrowing costs as banks increase lending to businesses, particularly MSMEs, which form a major part of Kenya’s private sector.
