Kenyan banks post record profits while small businesses struggle for credit

Kenya's top commercial banks haven't recorded a single annual loss in five years. Combined pre-tax profits hit KES 305.95 billion ($2.36 billion) in 2025 — up 17.6% from 2024 — with NCBA Group's profit after tax surging 409% since 2020 to KES 23.4 billion. Dividend payouts jumped 368% to KES 11.7 billion.

Yet the industry's non-performing loan ratio sits at 16.4% (Dec 2024), and government securities now make up 27.8% of banking assets while the loan-to-deposit ratio fell to 70.1%. Three-quarters of small businesses never apply for loans — expecting rejection or unable to meet collateral demands — though 90%+ of applicants get approved. Banks disbursed KES 326.5 billion to MSMEs in 2025 (73% uncollateralised), but women-led firms got just 25% of credit despite being 46% of borrowers.

The gap is being filled by mobile overdrafts and digital lenders. Safaricom's Fuliza (with NCBA and KCB) disbursed KES 1.16 trillion in six months to Sept 2026 at 99.6% recovery — but average advances dropped 25% to KES 192 ($1.49). Digital credit providers lent KES 43.7 billion to 8.9 million customers at ~24% monthly rates. Household debt distress rose to 16.6% from 10.3% in 2021.

For Nigerian readers: this mirrors our own banking dynamics — lenders favouring T-bills over SME risk, fintechs bridging the gap at steep costs, and women entrepreneurs systematically underfunded. The Kenyan data suggests regulatory pressure on digital lending rates and collateral-free SME frameworks aren't optional — they're infrastructure.

What would it take for Nigerian banks to lend to the 40 million MSMEs they currently ignore?

SOURCE: https://techcabal.com/2026/11/08/next-wave-no-bad-year-for-kenyan-banks/