• Kenyan banks lent 326.5 billion shillings to MSMEs in 2025

• Lending exceeded 150 billion target, driven by industry initiatives

• Rising non-performing loans highlight ongoing sector challenges

Kenya’s major banks lent a combined 326.5 billion Kenyan shillings ($2.5 billion) to micro, small and medium-sized enterprises (MSMEs) in 2025, the Kenya Bankers Association said on Monday.

The total exceeded the banking sector’s annual lending target of 150 billion shillings by more than 117%, the industry body said in data released on March 31.

Equity Bank led lenders with 90.7 billion shillings in MSME loans as of December 2025. KCB Bank, a subsidiary of KCB Group, was second with 56.1 billion shillings, followed by Co-operative Bank of Kenya with 37.69 billion shillings.

Stanbic Bank Kenya and Family Bank both exceeded 30 billion shillings. I&M Bank lent more than 26 billion shillings, while Kingdom Bank, Absa, National Bank and Sidian Bank disbursed 9.8 billion, 6.3 billion, 5.7 billion and 5.4 billion shillings, respectively.

The association attributed the strong performance to several factors, including an industry-wide initiative launched in late 2024 to double MSME lending capacity.

The effort was supported by risk mitigation programs such as Inuka SME, which trained more than 14,000 entrepreneurs in 2024 to improve access to credit. Digital transformation also played a role, with the adoption of the ISO 20022 standard and the licensing of 85 digital lenders easing access to credit.

Despite the strong lending figures, the sector still faces challenges. Non-performing loans rose to 16.4% in December 2024, driven by economic difficulties and delays in government payments.

Sandrine Gaingne