Category: Business Daily

Kenya’s household electronics sector stands at a pivotal moment after registering years of sluggish growth. For decades, it has been a nation of consumers importing finished goods, with 2025 estimates placing the import bill for this category at Sh210 billion.

Until recently, Kenya relied on imported televisions. However, the registration of the country’s first locally assembled, officially recognised ‘Made in Kenya’ television sets, highlights a major opportunity to shift the import equation.

All this has happened on the back of modest regulatory support, including the ban on the importation of household and kitchen appliances older than 12 years and the establishment of special economic zones for export-oriented production.

Despite the immense milestone, as far as household electronics is concerned, no single company can transform the industry.

Today, all players grapple with various challenges such as proper definitions of completely knocked down kits for onward assembly and taxation policies that require refinement.

This can only be done through a thorough understanding of the local assembly industry dynamics by the respective regulators and tax agencies.

Beneath the headline figures that promise a bright future for local household electronics assemblers lies an even more compelling story: a young, urbanising population with rising incomes and an ever-growing appetite for technology.

Industry analysts estimate that around 75 percent of Kenyans are under 35 years old, indicating that demand is driven by first-time buyers entering the digital economy.

However, replacement is also a growing opportunity which, if properly exploited, could reduce Kenya’s total import bill for major household appliances by up to 40 per cent in the long term.

Recent international geopolitical events have shown that supply chains can be reconfigured literally overnight.

This calls for internal reflection so we can prioritise in-country resilience, diversification, and regionalisation of manufacturing. But without targeted policy support, structural and regulatory disadvantages remain significant.

For one, Kenya has to aggressively pursue technology and skills transfer. Consumer and household electronics manufacturing, especially assembly and replacement repair, is a gateway into engineering, design, quality assurance, and supply chain sophistication. This is the path that most countries followed to attain manufacturing status.

We need incentives for joint ventures, knowledge transfer, and local capacity building.

Secondly, the relationship between academia and industry has to be invigorated, so that universities and technical institutions can be incentivised sufficiently for industry-led curriculum design, applied research partnerships, and apprenticeship programs. We must also sustain the fight against unfair competition and dumping.

We need stronger anti-dumping measures.

Also, we need to confront non-tariff barriers, inconsistent standards, duplicative certification processes, and bureaucratic delays remain.

At the same time, we need to confront some difficult truths about regional trade. While trading blocs like the East African Community and the Common Market for Eastern and Southern Africa are designed to facilitate intra-African trade, the lived experience for many manufacturers tells a different story.

Also, we need to confront non-tariff barriers, inconsistent standards, duplicative certification processes, and bureaucratic delays remain.

On the same note, sustainability and management of electronic waste have reached a critical point as the volume of discarded devices rises, posing an environmental risk and an economic opportunity.

We need urgent policies that encourage formal recycling systems, extended producer responsibility, and innovation in e-waste processing.

This is a moment that calls for partnership between government, industry, academia, and regional institutions. The fundamentals are already in place. We have a multi-billion-dollar domestic and regional market for locally assembled household and consumer electronics, a rapidly expanding regional opportunity, and a young, tech-savvy population ready to consume and create.

To get this right, Kenya has to intentionally shape it, or we will be defined by imports, missing out on one of the most significant industrial opportunities of our time.

The Tax Appeal Tribunal has endorsed tax liability assessments based on dividend payouts by corporates. This decision would embolden the Kenya Revenue Authority (KRA) to pursue corporates that distribute earnings to shareholders while paying little or no corporate income tax.

In a ruling involving Kenya Electricity Generating Company (KenGen), the tribunal upheld a Sh2.36 billion compensating tax assessment after finding that the power producer failed to demonstrate that dividends paid to shareholders, including the government, originated from profits already subject to tax.

The decision arose from a dispute over KRA’s review of KenGen’s tax affairs for the period between 2019 and 2024.

According to the tribunal, that finding was sufficient to require KenGen to explain the source of the dividends.

“KRA identified a gap that the appellant was required to explain,” the tribunal said. “Against that background, the burden shifted to the appellant to demonstrate, with sufficient evidence, that the dividends were sourced from gains or profits on which tax had already been paid.”

KRA had initially issued an assessment on December 4, 2024, demanding Sh2.95 billion comprising compensating tax of Sh2.36 billion and withholding tax of Sh586.2 million. However, following alternative dispute resolution proceedings, the withholding tax component was dropped, leaving only the compensating tax assessment for determination.

KRA argued that although KenGen paid taxes on rental income, interest income and other miscellaneous income, it paid no tax on its principal business income because of substantial capital allowance claims.

The tribunal noted that KRA had demonstrated that taxed non-business income amounted to about Sh3.3 billion, which was less than half the Sh6.92 billion distributed as dividends during the review period. KRA therefore maintained that the company was liable to compensating tax under Section 7A of the Income Tax Act.

This section governs the taxation on dividends distributed out of untaxed gains or profits. It requires companies that distribute dividends from profits that have not been subjected to corporate tax to pay tax on those specific distributed amounts.

KenGen challenged the assessment, insisting that it had not distributed dividends from untaxed profits. The company argued that its operations generated tax losses and therefore no taxable gains capable of attracting compensating tax.

It relied on tax computations showing business losses of Sh37.5 billion in 2018/2019, Sh34.16 billion in 2019/2020, Sh19.76 billion in 2020/2021 and Sh32.89 billion in 2021/2022.

The company further argued that it had fully paid taxes on rental, interest and miscellaneous income and therefore had no untaxed gains or profits.

KenGen also pointed to its accumulated retained earnings, saying the dividends were funded from reserves built over many years.

It told the tribunal that retained earnings stood at Sh86.6 billion in 2019 and had increased to Sh113.19 billion by 2023, comfortably exceeding the Sh6.9 billion distributed to shareholders during the period under review.

But the tribunal found that explanation insufficient. It observed that KenGen is a capital-intensive utility whose balance sheet is dominated by property, plant and equipment accumulated over decades through equity and debt financing.

“The appellant did not present a cash flow analysis identifying the specific sources of the cash used to pay the dividends, nor did it link those cash flows to taxed reserves. The appellant provided no explanation for this gap.”

The tribunal noted that KRA had specifically requested audited accounts showing the source of funds used to pay dividends as well as a breakdown of taxed and untaxed income streams that contributed to the distributions. However, KenGen failed to provide an analysis showing the composition of retained earnings or identifying which reserves funded the dividend payments.

“The Tribunal finds that the appellant did not discharge its burden under Section 56(1) of the TPA. The evidence presented was insufficient to establish, by a cogent and sufficiently particularised analysis, that the dividends distributed were sourced from gains or profits on which tax had already been paid,” the tribunal ruled.

The tribunal further rejected KenGen’s contention that its tax-loss position automatically shielded it from compensating tax.

It observed that although the company reported tax losses, it continued to generate substantial revenues from electricity sales that exceeded operating costs. The gains, the tribunal said, were effectively shielded from corporation tax through capital allowance deductions.

“In the Tribunal’s considered view, a company that is in a tax loss position solely by reason of capital allowance claims, while generating real economic revenues that substantially exceed its operating costs, cannot automatically, and without more, be said to have no gains or profits for Section 7A purposes,” the tribunal stated.

The ruling also upheld KRA’s use of a reconstruction methodology, including a gross-up formula, to determine the gains from which the dividends were paid.

Although the approach is not expressly provided for under current tax law, the tribunal found that KRA was entitled to adopt the method after KenGen failed to provide records that would have enabled a more precise calculation.

The decision is likely to strengthen KRA’s position in pursuing compensating tax assessments where companies distribute dividends despite having little or no corporation tax liability, particularly where taxpayers cannot clearly demonstrate that the distributions originated from profits that had already been taxed.

CV after CV after CV. You apply and apply. Following an exhaustive labourious job search, you finally land an interview at one of your target firms.

Then, once the initial enthusiasm subsides, you get to work and spend hours preparing for the interview. You read about the company, go through their social media accounts, investigate public disclosures about them, and finally check through your networks to ask pre-interview questions about the firm to your connections.

Then the big day comes. You try to calm your nerves as you patiently wait to be called into the conference room for the job panel. The human resources manager kicks off the interview with the typical question asking you to tell them a bit about yourself and why you want the position. Everything seems normal and progressing as expected.

They insult their own team members who are not even in the room. They neglect to even ask you a question about yourself. Stunned, you just sit and listen to their performance and wonder what is actually going on.

Well, congratulations. You just got hit with a show from a potential supervisor with dark personality traits. Whether you are a new graduate straight from university or you are a seasoned long-serving professional, it stands as crucially important to screen your would-be manager while seeking a new position for the dreaded dark traits.

We often hear about the five dimensions of personality utilised by psychologists and managers around the world to enhance self-knowledge, teamwork, and life satisfaction. But there also exist a dark triad of negative personality traits that are so dismal that they often get left out of classrooms and boardrooms alike as they capture manipulative and exploitative tendencies.

Social scientists Delroy Paulhus and Kevin Williams developed the concepts of the dark personality traits over two decades ago and therapists globally lookout for these in their patients.

However, executives, human resources managers, and business school professors often overlook these salient negative sides of personalities.

The dark three

The dark three negative personality traits include narcissism where someone has a sense of superiority, entitlement, and feeling uncommonly grand. Next, Machiavellianism involves manipulative behaviours focused on their own self-interest and personal gain.

Finally, psychopathy entails impulsivity, complete lack of empathy for others or remorse for their own actions or events in the news that you can see through general callousness. These traits are often noticed plainly in certain global political leaders.

Position seekers should use the interview as a time to screen their prospective supervisors and managers for these dark traits. These negative aspects in one’s possible boss do not disappear during a job interview. So, stay alert.

First, see if they dominate the conversation and rarely ask about you or your qualifications. Second, do all their stories position them as the smartest person in the room? Third, do they talk about their teams with contempt or blame? Fourth, watch how they treat others before, during, or after the interview. Fifth, listen to how they talk about people who are not even in the room. Sixth, does your interview even end up being about you at all?

Do not get fooled if they seem charming. Charm can feel real. But you must see through it and look for the above red flags. If you notice any three of the above red flags, then run for the hills. Things will go badly in your job working for that manager.

Utilise looking out for the six red flags not only in job interviews. Also incorporate them if in your work there has been a change of ownership or change of one of your bosses and someone new comes in.

Again, if you notice three or more of those red flags, your work life will not improve and you need to leave as quickly as possible. Start your job search all over again while you still have your sanity. Go. Find the door.

Worried that you might possess one or more of the dark triad personality traits yourself? Then go online and take a quick two-minute self-assessment at openpsychometrics.org/tests/SD3/ and see if you have any of the negative three personality traits.

I and M Group has overtaken NCBA Group in total assets, signalling a shift in Kenya’s banking pecking order driven by the former’s aggressive push into retail banking.

Latest disclosures show I and M’s balance sheet stood at Sh742.5 billion as at March 2026, marginally edging out NCBA’s Sh741.1 billion to become the fourth-largest lender by asset base after KCB Group (Sh2.254 trillion), Equity Group (Sh2.036 trillion) and Co-operative Bank of Kenya (Sh884.57 billion).

The crossover marks a milestone for I and M, which has historically trailed larger tier-one lenders but has in recent years ramped up its expansion in Kenya’s mass market segment. The lender has grown its assets mainly through expansion of its loan book, steadily narrowing the gap with the industry’s top players.

NCBA, which was formed through the merger of Commercial Bank Africa and NIC Bank in September 2019, had expanded its asset lead over I and M to Sh183.06 billion by the end of December 2022.

However, I and M started narrowing the gap the following year, reducing it to below Sh100 billion by December 2024 before eventually overtaking NCBA in the quarter ended March 2026.

I and M’s growth has been supported by a strategy to diversify away from its traditional corporate banking base and aggressively target small and medium-sized enterprises (SMEs) and retail customers through branch expansion and digital channels.

‘In addition to the group’s established presence in the corporate and institutional banking segment, it has now developed a respected standing in serving small and medium-sized enterprises, many of which have experienced significant growth alongside the group,’ said the lender.

I and M has also been narrowing the profitability gap with NCBA, reducing it from Sh8.1 billion in 2023 to Sh5.92 billion in 2024 and Sh3.55 billion last year. In 2025, I and M’s net profit grew 24.4 percent to Sh19.83 billion, while NCBA’s rose 6.9 percent to Sh23.39 billion.

Valuation edge

NCBA, however, continues to trade at a higher premium, with a market capitalisation of Sh144.9 billion compared with I and M’s Sh93 billion.

NCBA’s larger valuation is linked to its relatively stronger efficiency metrics, including return on equity, as well as the recent rally in its stock following Nedbank’s offer to acquire a 66 percent stake in the bank at a premium of up to Sh105 per share.

I and M’s pivot to retail banking, supported by its three-year strategy dubbed iMara 3.0, which runs until the end of this year, has driven steady growth in customer deposits and loan uptake, boosting its overall asset base.

In contrast, NCBA has maintained a strong footing in corporate and digital lending, including its flagship mobile loan products. However, its asset growth has been relatively slower in recent quarters, allowing I and M to close the gap and eventually surpass it.

Data shows that while NCBA still held a slightly larger loan book of Sh324.4 billion compared with I and M’s Sh322.9 billion as at March 31, 2026, the balance has tilted in favour of I and M in total assets, reflecting growth in other balance sheet components such as investments.

I and M has also been closing the gap in its loan book, with the difference narrowing from Sh40.33 billion in December 2022 as lending expanded.

The lender’s loan book overtook NCBA’s between the first and third quarters of 2025 before NCBA regained the lead, holding a marginal Sh1.47 billion advantage by the end of March this year.

The Nairobi Securities Exchange-listed bank has continued to aggressively expand its retail banking business through new branches and additional staff.

I and M added 12 new branches last year, bringing its network to 119 outlets and strengthening its footprint across regional markets. Ten of the new branches were opened in Kenya, which accounts for more than 70 percent of the group’s assets.

Scale race

The development highlights rising competition among Kenya’s top lenders as mid-tier banks increasingly challenge incumbents through niche strategies and innovation.

I and M’s rise mirrors a broader industry trend in which banks are recalibrating their business models to capture retail and SME segments that offer higher margins and diversification benefits.

Across the sector, lenders have been expanding digital offerings and agency banking networks to deepen customer reach.

The race for scale is expected to intensify further as banks prepare for higher minimum capital requirements in the coming years, a move that could trigger mergers, acquisitions or fresh capital injections.

Banks are required to raise minimum core capital to Sh5 billion by the end of this year, increase it to Sh6 billion by the end of next year, reach Sh8 billion in 2028 and further raise it to Sh10 billion by the end of 2029.

Larger balance sheets are viewed as critical for absorbing shocks, funding big-ticket loans and remaining competitive.

WPP Scangroup founder and former CEO Bharat Thakrar failed in his bid to oust the firm’s board in a vote at the annual general meeting, as the majority shareholder was unable to secure the backing of the minority investors.

The shareholders voted on Monday to remove the current board members and push for new directors, following a petition from minority shareholders who hold a combined 13.59 percent stake.

All minority shareholders who participated in the AGM, with 65.5 million shares or a 15.1 percent stake, backed the ouster bid.

However, their numbers were not enough for the might of the firm’s majority shareholder, WPP, the world’s largest advertising group, which had a 56.26 percent stake or 243.1 million shares.

The three main votes, including ouster of the board, appointment of new directors and replacement of CEO and chair, were rejected by 243.1 million votes, underscoring that none of the minority investors at the AGM backed the majority shareholder.

But shareholders with 125.4 million shares, equivalent to 29 percent of the firm, did not participate in the AGM.

Mr Thakrar remained bullish despite the vote.’The minority shareholders of WPP Scangroup voted no confidence in the board.

The resolutions did not carry. The WPP Plc controls 56.26 percent and voted its entire block against,’ said the former CEO in a statement.

‘Of the roughly 63.5 million independent shares that voted, more than 99 percent were cast in favour of change. WPP did not defeat a divided minority.’

The share closed trading at Sh2.06, a 2.83 percent drop from Monday’s close of Sh2.13.

The minority shareholders, with a combined 13.59 percent stake, including Mr Thakrar’s, forced the firm to include the ouster and election of new directors as part of the AGM, citing a string of poor financial performance.

This escalated the fight between the founder and the UK firm, which first bought a stake in the firm in 2008.

Mr Thakrar, the founder of ScanGroup, exited the firm in 2021 following a fallout and has sued the firm and its parent company, WPP Group, for $£24 million (Sh4.22 billion), citing irregular removal.

Globally, activist investors have mounted a record number of attacks against companies as disgruntled shareholders sought to oust directors or force the sales of businesses whose share prices had languished.

Kenya has witnessed fewer instances of activism, with cases of minority investors pushing publicly for change they believe will shore up profits and share prices being rare.

The AGM listed the minority shareholders’ push under special business, coming after the ordinary business in which current board members-including Richard Omwela, Patricia Kiwanuka, Kagiso Musi, Nick Douglas and Manuel Segimon-have offered themselves for re-election.

The minority shareholders sought the removal of the current board led by chairman Omwela.

Other board members whom the minority owners wanted out are Beverly Spencer Obatoyinbo, Peter Kimurwa, Patricia Kiwanuka, Patricia Helene Nuytemans, Jonathan Eggar, Shahid Sadiq and Tebogo Skwambane.

Mr Thakrar’s camp wanted to replace the board with new directors, including the former CEO, Andrew White, Carl Ogola, Kunal Kamlesh Bid and Rishab Thakrar.

The minority shareholders say the firm’s share price at the Nairobi bourse has declined 62 percent from Sh5.94 when Mr Thakrar was removed, resulting in material erosion of shareholders’ value, alongside loss of major clients and decline in profitability.

In the letter, the minority shareholders say the Scangroup has incurred aggregate trading losses of about Sh3.3 billion between 2021 and 2025, when the net loss widened by 41 percent to Sh713.7 million from a Sh506.7 million loss booked in the previous year. Its revenues have dipped to Sh2 billion from Sh7 billion in 2021.

They are also questioning the terms of the Sh1.2 billion that Scangroup has lent to its parent firm, WPP, with an interest of five percent, arguing that it is lower than average deposits and lending rates at 6.86 percent and 16.85 percent, respectively.

The shareholders say the five-year period has seen the company lose major clients, including KCB, Equity, NCBA and Airtel Africa.

Artificial intelligence (AI) is quickly becoming part of the HR toolkit, from screening CVs and scheduling interviews to predicting attrition and analysing employee performance.

The promise is clear: faster decisions, better insights, and improved efficiency. Yet, as AI grows in intelligence, power, and autonomy, it also collides with some of the deepest moral questions humanity has ever faced.

Because when it comes to people decisions, efficiency is not the only metric that matters.

One of the most pressing concerns is bias. AI systems are trained on historical data, and if that data reflects past inequalities, the system can quietly reinforce them. Where humans go, bias follows.

A hiring algorithm, for example, may favour certain schools, career paths, or demographics simply because that’s what ‘success’ looked like in the past. The risk is not just unfair outcomes-it’s scaling those outcomes across thousands of decisions at speed.

Closely linked to this is the question of transparency and explicability. Many AI tools operate as ‘black boxes,’ making recommendations without clear explanations.

For HR leaders, this creates a dilemma: how do you justify a hiring, promotion, or termination decision if you cannot fully explain how it was made? Employees are increasingly demanding fairness and clarity, and organisations risk losing trust if decisions feel opaque or automated.

Privacy is another growing concern. HR functions now have access to vast amounts of employee data-performance metrics, communication patterns, even behavioural insights.

AI makes it easier to analyse this data at scale, but just because something can be measured does not mean it should be. Where do we draw the line between insight and intrusion? And how do we ensure employees feel respected, not monitored?

There is also the risk of over-reliance. AI can highlight patterns and offer recommendations, but it cannot fully understand context, culture, or human nuance. Yet in many organisations, there is a temptation to treat AI outputs as the objective truth.

This can lead to leaders outsourcing judgment rather than enhancing it. In HR, where decisions affect careers and livelihoods, that is a dangerous path.

Accountability remains a critical question. When an AI-driven decision leads to a negative outcome, who is responsible? The vendor? The HR team? The leadership? Without clear ownership, it becomes difficult to determine who is responsible when harm occurs. HR leaders must ensure that responsibility for decisions remains firmly human, even when technology is involved.

Finally, there is the broader question of what kind of workplace or reality we are building. AI has the potential to trigger and motivate actions based on the insights it generates.

It has the power to transform society because people change how they act simply because they know they are being measured or ranked. For instance, we’re seeing increased AI use among candidates to generate resumes and even answer interview questions in real time.

The role of HR has always been to balance business needs with human impact. AI does not change that responsibility; it amplifies it. It shows us who we are-our prejudices, our patterns, our blind spots-and holds them up at scale.

To make AI ethical, we must first fix ourselves. We must also continue setting clear ethical guidelines, regularly auditing systems for bias, involving diverse perspectives in decision-making, and ensuring employees understand how AI is being used. And how we choose to use it will define not just our processes, but our culture and new definition of humanity.

The National Treasury has moved to protect internal auditors from harassment and intimidation by county government officials as part of a push to safeguard the billions of shillings expended to the devolved units.

In changes to the Public Finance Management (County Governments) Regulations, National Treasury Cabinet Secretary John Mbadi has introduced special protection of the auditors amid growing concerns about wastage of funds in some counties.

The Treasury has amended the law and included new rules that no internal auditor shall be dismissed, demoted, suspended, harassed, discriminated against, intimidated, or subjected to any other form of retaliation for performing their duties.

‘No internal auditor shall be dismissed, demoted, suspended, harassed, discriminated against, intimidated, or experience any other form of retaliation for-(a) performing their duties in good faith; (b) reporting irregularities, fraud, misconduct, or non-compliance; or (c) providing findings, recommendations or opinions related to the internal audit function,’ Mr Mbadi said.

An internal auditor plays a critical role in a corporation by evaluating financial controls and record-keeping processes for accuracy, efficiency, and compliance with relevant laws and regulations. Internal auditors identify and correct any deficiencies in their financial record-keeping before they are discovered in an external audit.

The internal auditors examine financial statements, expense reports, inventory, financial data, budgeting and accounting practices, as well as creating risk assessments for each department.

Internal auditors in counties have, however, been facing growing strains of intimidation and interference by executives rattled by reports which exposed irregularities, especially in key areas such as procurement.

Internal auditors have recently stepped up a push-back against executive interference, litigation, and victimisation by mooting a proposed law that would safeguard their professionalism.

The Institute of Internal Auditors Kenya has spearheaded the Internal Auditors Bill, 2026 to regulate the profession and protect internal auditors from rogue executives.

The Public Sector Accounting Standards Board (PSASB) in January 2026 also launched a manual in collaboration with the National Treasury, designed to give internal auditors practical tools, clear procedures, and professional guidance to support better governance, risk management, and internal control across all public entities.

Both the fiscal imbalance and structure of monetary policy mean that Kenya continues to be a high interest rates environment. Further, the public sector has out-competed the private in the credit market for over a decade and half.

Under these circumstances, the role of Development Finance Institutions (DFIs) is urgent and critical.

We require DFIs because the industrial enterprises that they finance have long payback periods, need patient capital, and are unable to shoulder high interest rates. DFIs provide long-term capital and financial services to sectors of the economy or projects that are considered too risky for traditional commercial banks.

The latter prioritise short-term profitability and shareholder returns.

DFIs on the other hand, are driven by a dual mandate – financial sustainability while maximising socio-economic development. To fulfill their purpose, DFI work around four main pillars – bridging market failure, crowding-in private capital, advisory services and implementing policy priorities.

As they should, commercial banks avoid high-risk, high-return projects with long payback periods. DFIs step up to fund such projects in infrastructure, energy plants, and large-scale manufacturing. They invest in and lend to underserved sectors such as Agriculture, and micro, small, and medium enterprises (MSMEs).

DFIs serve as market catalysts. By offering moderately priced and well-structured loans, equity investments, or partial risk guarantees, a DFI de-risks a project, giving commercial banks and private equity funds the confidence to co-invest. In addition, DFIs provide business advisory services.

DFIs provide governments a policy execution platform. For example, in Kenya, the Agricultural Finance Corporation (AFC) directly funds food security initiatives, while the Kenya Development Corporation (KDC) targets industrial goals aligned with Kenya’s Vision 2030 and the Bottom-Up Economic Transformation Agenda.

Current and previous administrations have tried to reverse the decline (12.5 percent to 7.1 percent in 15 years) of the proportionate contribution of manufacturing to GDP, without success. This is because of the dearth of appropriate finance. The case for DFI reform has, therefore, never been more urgent.

To lay foundation for the future, the DFIs themselves are pushing for a modern, appropriate regulatory framework – one that would make it easier for them to raise and deploy capital. To this end, they convened a stakeholders meeting this past week at a city hotel.

Most were created by Acts of Parliament. Since then, their operating environment has evolved considerably. The original Joint Loan Board Credit Scheme (created alongside ICDC in 1954), provided micro finance, but was phased out, replaced by enterprise funds in most counties. Youth, Women, Uwezo and most recently Hustler Funds other recent policy initiatives.

The Small Enterprise Finance Company (Sefco), established in 1983 as a subsidiary of the Development Finance Company of Kenya (DFCK), focused on industrial loans under five million shillings. It was later absorbed into the Development Bank of Kenya.

The KDC is a merger of Industrial Commercial and Development Corporation (ICDC), IDB Capital and Tourism Finance Corporation (formerly Kenya Tourism Development Corporation).

The Kenya Industrial Estates (KIE), Agriculture Finance Corporation (AFC) and Agriculture Development Corporation have retained much of their original form, although the latter is no longer seen as a development finance institution after the Land Transfer Program wound down.

Regulated by the Central Bank of Kenya using a specialised regime, the Kenya Mortgage Refinance Company (KMRC), is the latest entrant.

The stakeholders meeting last week agreed that specialised regulation is not control. For instance, the CBK regulates commercial banks, but does not control their boards of directors.

It conducts fit and proper tests on directors to be appointed, but does not appoint them. In comparison, DFI boards are appointed by a Kenya gazette notice on a Friday afternoon. The Government Enterprises Act did away with this sort of control.

We debated the best regulatory regime, considering four options – a specialist regulator, CBK-led, self-regulation, and a hybrid of all the above. We preferred a CBK-led specialised regime, tailor-made for the sector.

At below Sh60 billion, the total DFI portfolio is regrettably too small to create real impact in the economy – that would require about Sh700 billion to-Sh800 billion.

If I could persuade my Treasury bosses, we would make a once-off investment Sh60 billion and Sh70 billions, and invite other shareholders, into DFIs.

We should revive Sefco with Sh5 billion, and inject Sh15 billion each into KIE and AFC; and Sh25 billion to the KDC. This will make it possible for DFIs to mobilise resources in the capital markets, just like KMRC.

Kenya’s motor vehicle assemblers and parts manufacturers are set to access soft loans of up to Sh7.5 billion under a Japanese-backed programme aimed at expanding local vehicle production and reducing the country’s reliance on imports.

The funding will come from a 15 billion Japanese Yen (about Sh12 billion) Samurai Loan Facility signed between Kenya and Japan in March 2026.

The Ministry of Trade has been seeking approval to spend Sh7.5 billion of the loan in the 2026/27 financial year to establish and upgrade an automotive parts manufacturing facility, provide technical support to the industry players, among others as Kenya seeks to grow its automotive industry.

The three-year programme is aimed at supporting Kenya’s goal of becoming a regional automotive manufacturing hub.

A source within the industry has told the Business Daily that the Sh7.5 billion drawdown is the first portion of the Samurai loan and the rest will follow.

‘The Samurai money will be a soft loan for automotive assemblers and parts manufacturers like batteries, windscreen etc,’ the source said.

‘Assemblers will apply for the loan or the person applying for the vehicle loan will apply directly to the bank appointed by the government of Kenya, it will address the demand and supply side.’

The programme will also fund technical training, legal and regulatory reforms, support for vehicle dealers, financing for the purchase of locally assembled vehicles, and project administration.

‘The project will require Sh7.545 billion for the following [other] activities: development of legal framework: Automotive Bill, public participation; investment support for new vehicle dealers; financing approved applicants for locally assembled new vehicle purchases; …among other activities,’ said Principal Secretary Juma Mukhwana.

The project is expected to boost local manufacturing, create jobs and strengthen Kenya’s automotive industry.

‘The Kenya Vehicle Manufacturers (KVM) … and other assemblers will access the soft loan like any other to enhance their capacities like upgrade their plants. A portion will go to skills development,’ the source added.

Under the programme, assemblers will be able to apply for the loans to expand production capacity and upgrade plants, while individuals seeking to purchase locally assembled vehicles will access financing through banks appointed by the government.

In a May 20 presentation to a parliamentary trade, industry and cooperatives committee, the PS said the loan will finance the National Automotive Sector Development Project.

‘The Government of Kenya signed a three-year Samurai loan financing facility agreement of 15 billion Japanese Yen (about Sh13.1 billion) with the Government of Japan for the development of the automotive sector,’ said Mr Mukhwana in the presentation.

‘In the financial year 2026/27 the project will require Sh7.545 billion for the following activities: establishment and enhancement of production facility for automotive parts manufacturing.’

Samurai financing refers to debt dominated in Japan’s Yen and subject to Japanese regulations.

Utility company Kenya Power is expected to cancel out losses from the end of its monopoly in electricity sales with the lease of its infrastructure as analysts see a structural shift in the company’s business model.

Analysts at Standard Investment Bank (SIB) expect the utility to transform into an infrastructure firm, leasing out its over 160,000 kilometres network of high and low voltage lines to producers seeking to sell electricity directly to customers.

The dismantling of the legacy single buyer model is expected to shakeup Kenya Power’s business model as it faces competition to mostly retain its large-scale power consumers such as industries.

Already, electricity generating firm KenGen has sought an electric power transmission and distribution license for its Green Energy Park SEZ in Olkaria while Centum is seeking to wheel power from its Akira Geothermal facility in Naivasha to its special economic zone in Vipingo.

Producers are likely to leverage Kenya Power’s transmission network to sell power directly to customers instead of putting up their own infrastructure.

‘Kenya Power’s business model is set to transition from being an exclusive electricity retailer to an infrastructure landlord. While they face the risk of losing direct retail revenue from their top commercial clients to competitors, their survival will now depend on collecting ‘wheeling fees’ from private players and cleaning up the 21 percent power leaks across their network,’ Standard Investment Bank said in a valuation report.

‘To this end, Kenya Power’s future profitability will heavily depend on its ability to run a highly reliable, low-loss transmission network that private energy companies are willing to pay to use.’

Kenya’s Energy (Electricity Market, Bulk Supply, and Open Access) Regulations 2026 have sought to establish a competitive, transparent, and multi-supplier electricity market which is designed to stimulate broader economic growth.

The framework is centred on catalysing private capital, enhancing grid reliability and industrial productivity and deepening regional energy integration.

Kenya Power’s revenue has been premised largely on growing demand for power from customers, a driver likely to be tapered if the utility loses some of its largest consumers to producers turned suppliers.

Large power consumers who are mostly industries contributed to 54 percent of Kenya Power sales in the 12-months period to June 2025 while households consuming less than 100 kilowatt-hours (units) of electricity only made-up 17 percent of sales with the balance of 29 percent covering other consumer segments.

The data from the utility company underlines the importance of large-power consumers who will likely be the target of producers seeking to transform into direct sellers.

Kenya Power increased its dividend payout by 42.85 percent to Sh1 per share for the year ended June 2025 despite an 18.66 percent decline in profitability on lower revenues and higher finance costs.

The reduction in net income to Sh24.46 billion emerged as a lower tariff offset the impact of increased electricity unit sales as the cost of a unit of electricity for most customers fell in line with a three-year tariff gazette in 2023 by the Energy and Petroleum Regulatory Authority (Epra).

The utility returned to profit growth for the six months’ period to December 2025 with net earnings rising to Sh10.4 billion from Sh9.9 billion, helping the firm raise its interim dividend from Sh0.20 to Sh0.30 per share.

Standard Investment Bank (SIB) has noted that while Kenya Power has the opportunity to diversify into infrastructure leasing, its earnings momentum is likely to be slowed down by the tariff review freeze by its parent ministry besides system losses and bad debt from defaulting customers.