Category: Business Daily

At 87, Geraldine Robarts is perhaps the oldest living visual artist in Kenya. But her paintbrush isn’t drying up any time soon.

This weekend, some of her works will be showcased at the African Design Collective pop-up exhibition at 34 Ngara Road Nairobi, the continuation of an artistic journey that is a decade shy of a century.

She comes from a strong lineage of artists and has painted since she was two years old.

Art was embedded in Geraldine’s DNA from an early age. Surrounded by paints and colour, she grew up seeing creativity not merely as a practice but as a language of self-expression. Today, she believes visual artists owe it to themselves and their craft to tell their own stories.

‘Art is my way of expressing myself, and that is the whole point. Only I can tell my story. As an old artist, I get very worried when I see people taking photographs on their phones and copying the pictures on canvas.

‘Skill is very important, but it is not art. Many young people today have very good eye-hand coordination, but a lot of them copy everything from their phones. In art, self-expression is more important than the skill itself.

‘As artists, we tell our own stories, so the story must be unique. Art is similar to singing, writing or dancing. It has to come from the soul. Art is a language and a passion, and the courage to create something new is what matters.’

The trainer

Her journey begins in Uganda in 1964 where she had come because of her Bahai faith. Her work involved moving to the villages teaching women groups how to do tie and dye, make candles and bake bread, arts which she had taught herself. She did this across Kenya and Uganda until 2016, driven by her love for the women she worked with.

‘In the early 70s when I came to Kenya, I knew of about five artists. Three of them owned the Watatu Gallery in Nairobi. The late Margaretta wa Gacheru came in 1974 and she started highlighting the stories of artists.

‘By then I was teaching at Kenyatta University and being paid Sh15,000 most of which went into buying painting materials for my students because the university had such a miserable budget for the arts department. I think I have taught over 10,000 students who are scattered all over the world.’

Geraldine’s longevity in the craft is largely driven by a spirit that does not frazzle from creating.

‘It never gets tiring. I am always happy to be in my studio even after 45 years of teaching. To be alone in my studio is just heaven, I don’t get tired in heaven because I love what I do. Inside each of us is something different and it doesn’t matter how one paints it. What is important is sharing one’s unique story.’

Matter of the soul

At 87, Geraldine did not expect to have any more shows until she was approached by organisers of the African Design Pop Up Art show who picked some paintings from her collection (which has about 3,000 paintings) some dating back to 20 years ago and others as recent as this year.

Her more recent paintings are outlooks of her garden from her studio. They are expressive vistas of bright shades of colour with just the right balance of stroke work. They bear the playful dalliance of an experienced artist who takes the work as play and vividly, one gets the feeling of staring at a master expressionist at play.

‘Possibly we might be on the brink of a third world war which means that death and destruction are not so far off, but it also means we are nearing rebirth, renewal and a new beginning. Things are changing so fast, for the better. The destruction will also be a cleanup of people’s hearts and minds, which will hopefully help all of us establish better values.’

So, what makes a good artist?

‘Tell your own story. I have taught students who have come from places like Mathare and Kibera to showcase in the Venice Biennale. They are scattered all over the world because they focused on telling their own stories.

‘My studio is what church is for other people. It is my prayer room. Through painting, the world comes together for me. I love it when people discover something about themselves through my paintings. If I had something to tell every visual artist, I would tell them art is a matter of the soul and that each one of them has a really beautiful story to tell.’

The High Court has temporarily blocked Absa Bank Kenya from auctioning a set of commercial properties tied to a Sh80 million loan due in 2039 after the borrower missed a single payment instalment.

The dispute pits a borrower’s expectation that a long-term credit facility should continue running against a bank’s contractual right to demand immediate repayment after a monthly default.

John Maina Kinyua has sued Absa after the lender initiated the sale of two properties in Sigona, Kiambu County, charged as security for the long-term advance.

The rental properties, Sigona/1294 and Sigona/2103, were charged to the bank in September 2024 to secure a Sh80 million loan repayable through 180 monthly instalments.

Under the agreement, the facility was due to mature in July 2039. But the relationship soured after Mr Kinyua allegedly missed a monthly instalment of Sh180,000 in April 2025, prompting Absa to demand immediate repayment of the entire Sh79.9 million outstanding amount. He questions the bank’s move to recall the loan because of a single default.

The borrower argues that despite the relatively small default compared to the outstanding Sh80 million facility, Absa moved to recall the entire loan and initiate recovery proceedings.

Absa issued a 90-day statutory notice on May 12, 2025. The notice demanded immediate payment of the entire loan balance of Sh79.9 million.

The bank later issued a 40-day notice to sell on September 3, 2025, demanding Sh79.8 million and paving the way for a public auction.

Mr Kinyua challenged the move, arguing that the bank had unlawfully accelerated the facility and sought to recover the entire loan despite the facility having about 14 years left before maturity. He told the court that the lender had collapsed a 15-year facility barely a year after it was advanced.

The borrower argued that the charge document required a specific event of default to be declared and a prior demand for arrears issued before the entire loan could be recalled.

He further maintained that he had cleared the arrears within the statutory notice period and that the loan account had been regularised.

According to court filings, bank statements produced by Absa showed that by September 24, 2025, the arrears had been reduced to zero.

‘The applicant had fully regularised the account, reducing the arrears to zero,’ the court noted after reviewing the statements.

Mr Kinyua argued that the intended sale was therefore ‘malicious, premature, and an abuse of the statutory power of sale.’

Absa opposed the application, insisting that the borrower had defaulted on his repayment obligations for several months, including February and April 2025.

The lender argued that the charge instrument gave it the right to recall the entire outstanding balance immediately upon default.

The bank maintained that because Mr Kinyua failed to pay the recalled principal sum within the statutory timelines, it was entitled to proceed with the realisation of the charged properties.

Absa urged the court not to interfere with what it described as a commercial contract voluntarily entered into by both parties.

But the court found that the borrower had raised serious questions about the legality of the recovery process.

The judge said the bank’s own records showed that the arrears had been cleared.

‘The respondent cannot disown its own entries,’ the court said. It added that seeking to sell property worth millions after the underlying arrears had been fully cured raised ‘a monumental triable issue.’

‘A premature, accelerated foreclosure on a performing, fully regularised loan presents a formidable prima facie case with a high probability of success,’ the judge ruled.

The court also accepted the borrower’s argument that the properties were income-generating assets whose sale could trigger loss of tenants and disrupt rental income used to service the facility.

It stopped the planned sale and barred the bank from interfering with the properties pending determination of the suit.

The parties were directed to complete pre-trial procedures within 14 days to pave the way for an expedited hearing of the dispute.

The Finance Bill 2026 has ignited intense public debate, reflecting the growing tension between the revenue needs of the government and the economic realities of citizens and businesses.

Coming at a time families are grappling with high living costs, joblessness and reduced purchasing power, the Bill has attracted support and criticism.

While the government views the proposals as necessary for strengthening fiscal stability, many Kenyans perceive them as an additional burden on a strained economy.

The central issue of the controversy is the government’s drive to increase domestic revenue streams. The budget is under stress due to public debts, infrastructure projects and recurrent expenditure. The goal of the Finance Bill, 2026 is to improve tax compliance, broaden the tax base and boost revenue. These goals are consistent with overall fiscal consolidation aims to shrink budget deficits and bolster macro-economic stability.

Proponents of the Bill say they need more money to cut external borrowing. Better resource-generating capabilities will help the government to allocate funds to key sectors like health, education, infrastructure and social protection.

Better tax administration will boost efficiency of the revenue system, reduce tax evasion and increase accountability in public financial management. Improved revenue performance can help build investor confidence and promote long-term fiscal sustainability.

Critics say many of the proposed measures risk increasing the cost of living and doing business. More taxes or levies on goods, services and productive sectors may lead to rising consumer prices and further reduce household incomes.

Kenya’s economy is dominated by small and medium enterprises (SMEs) that could experience higher operating costs due to reduced profits. Such outcomes could hit job-creation and economic growth.

Another problem is the wrong perception of the efficiency of public expenditure, as compared to taxation. Many Kenyans say the government should focus on curbing wastage, corruption and the efficiency of public spending before taking any steps to introduce new revenue measures.

In addition to the tax burden, resistance to public taxation is informed by a concern about whether public services and development are providing taxpayers with value for money.

Beyond taxation concerns, the Finance Bill, 2026 has reignited debate over the relationship between fiscal policy and economic competitiveness. Critics say excessive tax burdens may discourage private sector investment, particularly in industries that drive employment and innovation.

Conversely, proponents maintain that a broader revenue base is necessary to finance public infrastructure and institutional reforms that ultimately enhance productivity, strengthen economic resilience and support long-term development objectives.

The Finance Bill also poses general questions on economic justice. Taxation supports government services and functions, but the distributional effects of proposed tax changes need to be carefully considered. Any tax policy which has an unequal impact on lower and middle income groups has the potential to increase income disparities and reduce the demand of consumers, which is a factor of economic growth.

If the Bill is passed in its current or near-current form, the country is likely to experience a mixed economic outcome. In the short term, the revenues of the government could increase, which would help to achieve fiscal consolidation targets and lower the level of borrowing.

That may improve Kenya’s creditworthiness and investor and development partner confidence. However, higher taxes may simultaneously suppress household consumption and business investment, potentially slowing economic expansion.

Ultimately, the success of the Finance Bill, 2026 will depend not only on its ability to raise revenue but also on how effectively the government manages public resources.

Sustainable development requires a careful balance between fiscal responsibility, economic growth and social welfare.

As Kenya moves forward, policymakers must ensure revenue measures are accompanied by transparency, accountability and policies that support inclusive growth.

Only then can fiscal reforms achieve economic stability and public acceptance.

We are obsessed with concrete in Kenya. We celebrate the ribbon-cutting of a new commercial complex, a sprawling agro-processing facility or a massive residential development. We view the physical asset as the ultimate proof of success.

Yet, a recurring scenario plays out in boardrooms across Nairobi: a local developer takes their physically world-class asset to an international private equity firm or a development finance institution seeking expansion capital or a buyout. The investor is initially impressed. Then they look under the hood and then walk away.

Why? Because despite the multibillion-shilling concrete, the entity is run like a corner kiosk. They suffer from the ‘Brick-and-Mortar Fallacy’ – the belief that the physical asset alone is enough to attract institutional money. It isn’t. Global capital doesn’t just buy assets; it buys the structures and systems that manage those assets.

In my years managing institutional risk in the City of London, the mandate was clear: we don’t just assess the internal rate of return; we assess the framework of control. When international investment committees look at Kenyan projects, they apply a ruthless fiduciary lens.

When they find opaque decision-making, mingled personal and corporate accounts or an absence of independent oversight, they don’t necessarily just say ‘no’. They apply a massive ‘value discount’ to the valuation to compensate for the operational risk. The founder leaves millions of dollars on the table simply because their house wasn’t in order.

Conversely, assets with robust, transparent structures command a ‘value premium.’ They attract cheaper capital, better partners and higher valuations because the risk is mitigated.

In Kenya, discussing corporate governance without discussing family governance is a futile exercise. The vast majority of our significant local assets are family-owned.

This is the ultimate ‘unmodellable risk’ for international capital. A foreign fund will look at a highly profitable, family-run logistics company or real estate portfolio and ask: What happens if the patriarch or matriarch steps down, or worse, passes away suddenly?

We have all seen the headlines. Empires built over decades paralysed in probate court for years, drained by sibling rivalries and succession disputes. This isn’t just a family tragedy; it is a catastrophic governance failure.

To an international investor, a brilliant business model means nothing if the underlying ownership structure is a ticking time bomb of family litigation. If the succession plan isn’t legally watertight and actively managed, the asset is virtually un-investable for institutional money.

If local originators want to command the value premium and partner with serious global capital, they must apply the same rigour to their organisational foundation as they do to their engineering blueprints. This requires a deliberate focus on high-performance structuring:

Use robust special purpose vehicles and holding company structures to legally ring-fence liabilities and clarify ownership.

Build a fiduciary board: Transition from a ‘friends and family’ advisory group to a truly functional board.

You need independent directors who possess the gravitas and expertise to genuinely challenge the founder and ensure international compliance standards are met.

Succession planning is not a will hidden in a safe; it is a dynamic, legally binding corporate governance framework. It must dictate continuity of leadership and ownership transfer long before a crisis hits.

The physical asset is merely the collateral. The investable asset is the robust structure you build around it.

It is time for Kenyan developers and business owners to ask themselves a difficult question: Are you building a family fiefdom, or are you designing an institution ready for global capital? If it is the latter, the blueprints must change.

Kenya’s competition watchdog and the public procurement regulator have stepped up a crackdown on tender cartels accused of inflating the cost of government projects and denying taxpayers value for money.

The Competition Authority of Kenya (CAK) said it was working more closely with the Public Procurement Regulatory Authority (PPRA) to identify and eliminate bid-rigging schemes that distort competition in the award of public contracts.

The move comes as the government seeks to tighten oversight of procurement, which accounts for about 60 percent of public expenditure and remains vulnerable to collusive practices among suppliers.

Bid rigging occurs when firms that are expected to compete for a contract secretly coordinate their bids instead of submitting independent offers.

The practice is regarded as one of the most harmful forms of anti-competitive conduct worldwide, as it directly impacts public spending and can result in governments paying significantly more than market prices.

The Treasury estimates that about Sh1.68 trillion -60 percent of the Sh2.8 trillion budget for the national government [executive] in the next financial year, starting July – will be spent on procurement of goods, services and public works, making the integrity of tendering processes critical to public finance management.

Speaking during the inaugural CAK Research Conference on Competition and Consumer Welfare, Treasury Principal Secretary Chris Kiptoo described bid rigging as one of the most urgent competition challenges facing the public sector.

“Every shilling lost through bid rigging is a shilling stolen from a school, a road or a hospital,” Dr Kiptoo said. ‘One area where the response is particularly urgent is public procurement. Government procurement accounts for roughly 60 percent of the national budget.’

One of the most common schemes is cover bidding, where some firms deliberately submit artificially high bids or unacceptable proposals to create the illusion of competition, while ensuring a predetermined company wins.

Another tactic is bid suppression, where competitors agree not to submit bids or withdraw from a tender process to allow a chosen firm to secure the contract unchallenged.

Competition and procurement watchdogs are also tracking bid rotation arrangements, where cartel members take turns winning contracts according to a pre-arranged schedule while others submit non-competitive bids.

There are also schemes that are involved in market allocation, where competing firms divide customers, regions, government agencies or categories of contracts among themselves and avoid competing against one another.

Dr Kiptoo said the partnership between CAK and PPRA should focus on eliminating schemes that undermine competition and lock out deserving businesses, particularly small and medium-sized enterprises.

CAK Director-General David Kemei said the authority views bid rigging as a major economic threat because it increases procurement costs and diverts resources away from essential public services.

‘It is very critical that bid rigging is really minimised, if not eliminated, because of the negative impact that it has on the economy. I’m confident because PPRA leadership understands that, and is also convinced that we should have a competitive aspect when it comes to public procurement,’ Mr Kemei said.

There are also cases where businesses use subcontracting arrangements to compensate losing bidders, thereby preserving cartel agreements and discouraging genuine competition. Such practices can be difficult to detect because the bids appear legitimate on paper, yet they often leave patterns such as recurring winners, identical pricing structures or suspicious bid withdrawals.

Mr Kemei acknowledged that tackling procurement cartels would not be easy but said the law gives CAK sufficient powers to investigate anti-competitive conduct.

‘We will really save a lot for this economy when we join hands [with PPRA]. It is not an easy job, though. But since the law gives us a mandate, we will actually take it on,’ he said.

This has come at a time when the Treasury has started rolling out the electronic government procurement system (e-GP), which is expected to enhance transparency in line with the Public Procurement and Asset Disposal Act of 2015 and accompanying regulations.

Under e-GP, all government contracts are initiated, evaluated, and awarded online.

Four lenders had not met the December 2025 minimum core capital requirement of Sh3 billion and remained non-compliant at the end of March, reflecting the strain of the new rules ahead of an even higher threshold later this year.

Banks’ disclosures for the quarter ended March 31, 2026 show that Credit Bank, Consolidated Bank of Kenya, Development Bank of Kenya and Access Bank Kenya had core capital below Sh3 billion, putting them in breach of regulatory requirements.

Under the Business Laws (Amendment) Act, 2024, banks were required to raise minimum core capital to Sh3 billion from Sh1 billion by the end of December 2025, triggering a wave of fundraising across the sector.

The law requires lenders to increase minimum core capital further to Sh5 billion by the end of 2026, Sh6 billion by the close of 2027, Sh8 billion in 2028 and Sh10 billion by the end of 2029.

The revised capital requirements have put pressure on smaller lenders. At the end of September last year, 10 banks had core capital below Sh3 billion.

The 10 lenders had a combined core capital of Sh15.58 billion, leaving them needing at least Sh14.41 billion to comply with the revised Central Bank of Kenya (CBK) rules.

Capital race

Six of the 10 lenders – M-Oriental Bank, Africa Banking Corporation (ABC), Middle East Bank Kenya, CIB Kenya, Premier Bank and UBA Kenya – have since raised their core capital above Sh3 billion, leaving only four still seeking compliance.

Credit Bank, which closed March with a capital shortfall of Sh1.63 billion, is racing to raise fresh capital after shareholders approved a plan in a mid-December 2025 extraordinary general meeting to raise Sh4.5 billion through a private placement.

Two key shareholders of Credit Bank – ShoreCap III LP and Sansora Group of Companies – committed to the CBK that they would inject Sh1 billion each into the lender.

‘Pursuant to the shareholder approval of the capital-raising initiatives at the EGM held on December 19, 2025, the board and management continue to implement various capital-raising measures, particularly the private placement offer and the pursuit of other strategic partnerships aimed at bridging the capital gap, alongside strengthened and more aggressive recovery efforts,’ Credit Bank said in commentary accompanying its first-quarter earnings.

‘There is an investor who has expressed interest and submitted documents to the CBK for vetting. The investment will be in the region of $100 million (Sh12.93 billion) and will lift its core capital above Sh5 billion by the end of 2026,’ said a source familiar with the ongoing transaction.

State-owned Consolidated Bank is seeking Sh1.125 billion from the National Treasury to boost its capital from the negative Sh541.14 million reported at the end of March.

Consolidated Bank acting chief executive Dominic Murage said the lender had developed a ‘comprehensive capital build-up and restoration plan’ aimed at achieving compliance with regulatory requirements while supporting growth ambitions.

‘Raising additional capital to finance growth and maintain healthy regulatory ratios is of paramount importance and the board has put in place a clear capital build-up plan to achieve the required capital requirements,’ said Dr Murage.

Compliance pressure

Another State-owned lender, Development Bank of Kenya, has not disclosed plans to raise fresh capital. The lender closed March with core capital of Sh2.17 billion, leaving a shortfall of Sh826.97 million.

Access Bank Kenya closed December with core capital of Sh1.1 billion and requires at least Sh1.89 billion to meet the minimum threshold.

The lender, alongside National Bank of Kenya (NBK), is owned by Nigeria’s Access Bank Group and is counting on a merger with NBK to achieve compliance.

‘The directors confirm that this [capital shortfall] is expected to be fully addressed through the proposed merger with National Bank of Kenya Limited, which will strengthen the combined entity’s core capital position and ensure compliance with the regulatory requirement,’ the lender said.

NBK, which closed March with core capital of Sh12.4 billion, is already compliant, positioning the merged entity to meet the regulatory threshold once the transaction is completed. Access Bank Group acquired NBK from KCB Group.

The clock is now ticking towards another increase in minimum core capital to Sh5 billion by the end of this year, creating fresh pressure for smaller lenders.

Earlier last year, the CBK asked 24 banks whose core capital was below the final target of Sh10 billion to submit plans detailing how they intended to raise fresh capital to meet the enhanced requirements.

The Treasury first proposed an increase in banks’ minimum capital during the reading of the 2024 budget, arguing that the move was necessary to strengthen the stability of a sector that now holds more than Sh6.393 trillion in deposits.

Kenya’s higher capital threshold, the first increase in 12 years, mirrors similar moves in neighbouring Uganda and Tanzania.

The banking sector has changed significantly since the Sh1 billion minimum capital requirement was introduced in 2012. Total assets have grown to more than Sh8.624 trillion as of February this year, up from Sh2.3 trillion 13 years ago.

A few weeks ago in Stockholm’s Gamla Stan, we had drinks in a cave bar.

Dusk had fallen, and we were walking from Stortorget, the old square where the Nobel Prize Museum sits today and where, in 1520, a king and about 100 of his subjects were executed during what came to be known as the Stockholm Bloodbath.

History can be a lot to carry around after dinner, so our guide and friend suggested we stop for a drink and process the violence of the age.

We ducked into a narrow stone passageway and descended underground. It was a cave, literally. A small restaurant sat to the left and a bar to the right. Always take a right when presented with such options.

We unwound our scarves and settled into one of the dozen or so seats. The rough stone ceiling hung low enough to remind you where you were, but not low enough to force reverence. One woman ran both the bar and the restaurant. Four other patrons occupied the room, which somehow made the place feel full.

We ordered wine.

A shaft of light fell through a fire escape above us. Our friend, who is 58, told us about practising Wing Chun, a form of martial arts.

He is a master of sorts. Which explained why he wasn’t drinking. Masters, I assume, must remain pure and sober in case they are suddenly required to strike somebody with the side of a palm.

At the next table, four red-faced British tourists grew progressively louder, as British tourists have done throughout history. We ignored them as one should ignore hooligans.

Five hundred years ago, cellars like these stored beer, wine, salt, and imported goods in the cool underground. Others served as taverns where sailors gathered under flickering candlelight to trade stories, spread rumours, gamble away wages, and arrange questionable transactions with prostitutes. In short, fun times.

Five centuries later, the candles are gone, the sailors have been replaced by us, tourists, but people still come underground carrying the same cargo: stories, loneliness, hope and a thirst.

Investors seeking to exit a Sh4.8 billion real estate fund by Two Rivers International Financial and Innovation Centre (Trific) will be bought out by the company, marking a sweetener for financiers by curbing the risks of illiquidity.

Illiquidity occurs when an asset cannot be quickly converted into cash without a significant loss in value.

Trific and Nabo Capital have partnered to set up a fund for the buyout of those leaving the dollar-denominated Income Real Estate Investment Trust (I-Reit), which would limit illiquidity risks by ensuring investors quickly sell their assets without suffering significant loss in value, especially where there are no willing buyers.

According to the parent firm of Trific, Centum Investments Plc, the fund has been capitalised to the tune of Sh517.8 million ($ 4 million), which will provide immediate counter-party availability to match any small-ticket exits by investors.

‘There’s certainly liquidity risk and sometimes an investor fears getting stuck with an asset. We have created a liquidity fund with the I-Reit manager, which acts as a market maker such that once an investor offers their units for sale and they do not get a buyer; the role of this fund will be to buy back those units,’ Centum Investment CEO, James Mworia, told the Business Daily.

The Sh4.8 billion instrument is Kenya’s second US dollar-denominated I-Reit, coming two months after Africa Logistics Properties raised Sh4.5 billion ($34.6 million) through a restricted Industrial Property Reit.

Centum Investment says its experience in executing the company’s share buyback has played a crucial role in designing the liquidity fund that accompanies the Trific I-Reit.

Centum’s share buyback plan closed on March 31, with a total of 10.83 million shares having been repurchased.

Some 10.6 million shares were repurchased in the first buyback between February 2023 and September 2024 and 150,800 repurchased between October 2024 and March 2026.

‘Because the I-Reit manager is also the one doing investor relations, they will have units to sell, post-buying back from those seeking an exit, to any prospective investors they engage with. We experienced this when we did the share buyback for Centum,’ Mr Mworia said.

Trific said one does not need a lot of money to be a market maker.

According to the National Bureau of Statistics, hard currency deposits in Kenya’s banking system closed at Sh1.36 trillion in March, having grown from Sh1.24 trillion in March 2025.

‘The dollar deposits held by what we would call retail depositors in banking runs into the billions. These are people earning a meager two to three percent on their deposits,’ Mr Mworia said.

‘We thought of giving these people an opportunity of unlocking a higher return. It made sense for the Reit to not only target institutional but also retail investors.’

The Trific I-Reit targets a minimum investment of Sh129,463 ($1,000), with the offer having opened on May 13 and slated to close on June 12, 2026.

Kenya’s top nine banks were holding collateral or security for loans worth a staggering Sh5.7 trillion in December, exposing borrowers to huge losses in case of default.

The nine listed banks, including KCB Group, Equity Holdings, Co-operative Bank and NCBA Group, have grown collateral sitting on their books from Sh5.1 trillion in 2024.

The collateral held by the banks, which is over a quarter of the Kenyan GDP, was 1.5 times the loans issued by the lenders at Sh3.6 trillion, underlining the banks’ reliance on security to issue loans.

This shows that mainstream lenders are trailing personal credit digital lenders with roots in Silicon Valley who are increasingly relying on mobile phone algorithms to lend to millions, including the unbanked.

While the trillions worth of collateral is providing a buffer to lenders in the event of default, it exposes borrowers to loss of assets like land, cars and shares that are often sold at a discount in auction yards.

Already, the top banks are fighting with multiple borrowers in court for selling loan security at huge discounts relative to their market prices.

‘Historically, the risk of borrowers defaulting was high, so banks were seeking high coverage. Unfortunately, that has remained the case even when repayment rate has improved and more information about borrowers is available,’ said Francis Mutonyi, a financial consultant with Goldplus Advisory.

The nine banks, which hold 75.5 percent of Kenya’s banking market share, had gross non-performing loans of Sh553.8 billion loans at the end of 2025, which represents 15.1 percent of their credit offered households and businesses and is lower compared to the industry default rate of 15.4 percent.

The bulk of the collateral at nearly half of the securities is in the form of homes, office blocks and land, highlighting how property ownership and access to loans are tied together.

Common assets used as collateral include car logbooks, shares and debentures.

KCB Group, with a loan book of Sh1.1 trillion, had security for loan defaults of Sh3 trillion. The group said it did not have a breakdown of the collateral apportioned to the subsidiaries of Kenya, Uganda, Tanzania and DR Congo.

Equity Group had security worth Sh784.4 billion, including land at Sh709 billion, shares valued Sh8.7 billion and assets classified as others valued at Sh75.7 billion.

NCBA Group had assets valued at Sh529.1 billion held as collateral of which property was Sh280.2 billion, logbooks Sh59.4 billion and debentures Sh152.2 billion.

The bank had a loan book of Sh317.1 billion.

Co-operative Bank of Kenya had collateral of Sh208.9 billion, made up of land (Sh113.7 billion), logbooks (Sh36.09 billion) and debentures (Sh59.1 billion).

This indicates that NCBA, Equity and Co-operative had Sh1.1 trillion worth of real estate and land as security.

Without land, most Kenyans lack collateral to access financial services, restricting their ability to invest.

‘Risk-based lending has not fully matured in Kenya, despite the introduction of the credit reference bureau (CRB) system,’ said Mr Mutonyi.

‘Even borrowers with strong cash flows, good banking history, and positive CRB records still find it difficult to obtain unsecured business financing,’ he added.

Kenya has three credit bureaus, with the first starting operation in 2010 in what was expected to help banks lend more to those without security and lower commercial lending rates by improving credit information in the banking sector.

But despite the presence of a credit information pool in Kenya, commercial bank in the country have not yet passed on the benefits.

Fintech firms like Tala and Branch argue that their technology, which relies on an algorithm that builds a financial profile of customers, minimises the risk of default.

Using machine learning algorithms, the apps assess the creditworthiness of borrowers by scanning personal data on their phones, including contacts, mobile money transactions, social media footprint and web history.

Within minutes, loans, ranging from Sh500 to Sh300,000, are deposited and are accessible on borrowers’ phones.

Bankers reckon they are now turning to data analytics to support unsecured lending, especially small-ticket loans.

‘In the banking industry now, there is a notable growth in unsecured lending as banks leverage on digital channels to extend unsecured facilities,’ said Raimond Malonje, chief executive of Kenya Bankers Association.

‘For every 10 unsecured facilities, there are up to 25 secured facilities in value. As such, there is no overreliance on secured loans in the industry.’

Provision of collateral in other markets has been used to ensure the borrower gets better loan terms, including pricing and tenure, but in Kenya collateral is a basic requirement to accessing credit.

Banks discount assets issued as collateral at different rates.

The discounting rate of land as collateral is estimated at 70 percent of property value to offer lenders adequate cover in the event of default and auction of the asset via forced sale.

The law bars auctioneers from selling property below 65 percent of their market value.

Logbooks are used when the value of a car is discounted at 70 percent debt while the more volatile assets like shares cover 50 percent of value.

Household goods such as television sets, fridges and sofa sets are accepted as security for short-term loans.

Saccos are the latest to push back against plans to allow the Kenya Revenue Authority (KRA) to raid taxpayers’ bank accounts in the middle of contested tax demands, warning of potential cash flow pressures and operational disruption.

The Kenya Union of Savings and Credit Cooperatives (Kuscco) on Wednesday asked the National Assembly not to pass the proposal in the Finance Bill 2026, which seeks an amendment on the Tax Procedures Act.

Section 42(14) (e) of the Tax Procedures Act bars the KRA from issuing agency notices, freezing bank accounts and assets or taking any enforcement measures while a tax dispute is still active or under appeal.

However, the Finance Bill 2026 is proposing the deletion of this provision.

‘Taxpayers may feel compelled to prioritise immediate financial survival over the pursuit of legitimate claims, particularly where enforcement measures such as agency notices restrict access to working capital or disrupt operations,’ Kuscco said in submissions made to Parliament by its Chief Executive Arnold Munene.

Kuscco joins the Kenya Bankers Association and Kenya Private Sector Alliance (Kepsa) in campaigning against the proposal.

According to Kepsa, the agency notices will compel third parties-typically bank or trade debtors-to remit funds directly to the KRA on behalf of the taxpayer even before a dispute is heard and determined.

‘If the taxpayer subsequently succeeds on appeal, recovery of those funds from KRA is uncertain or protracted,’ Kepsa said in its submissions on May 25.

‘The practical effect is that the right of appeal is rendered illusory. A taxpayer who cannot withstand the financial pressure of an agency notice is compelled to abandon a meritorious appeal or settle under duress rather than on the merits.’

Kuscco told the National Assembly Departmental Committee on Finance and National Planning that allowing the taxman to recover disputed amounts through agency notices will disrupt operations of financial entities such as saccos by restricting access to working capital and liquidity.

‘Funds held in sacco accounts are not idle reserves but are deployed to support lending, member withdrawals and ongoing financial obligations. The issuing of agency notices against such funds can disrupt lending and delay access to member savings,’ Mr Munene said.

Similar attempts to expand the enforcement powers of the KRA have been proposed in previous Finance Bills, reflecting an ongoing policy tension between strengthening revenue collection and protecting the Kenyan taxpayer.

Kepsa said giving KRA such powers will have ‘immediate and severe’ consequences for taxpayers with disputes currently before the courts, given that they had structured their litigation strategy on the basis of the existing tax procedures.

‘Removing that protection mid -litigation-without any transitional provisions-exposes them to enforcement action they had no reason to anticipate when commencing their appeals. We submit that the proposed deletion should be rejected in its entirety,’ Kepsa told the parliamentary team.

Private sector players are concerned that premature enforcement through agency notices also poses difficulty and delay in obtaining refunds where a taxpayer ultimately succeeds in a dispute.

Kenya’s tax dispute resolution process – from objection to tribunal and court determination – is usually lengthy.

Private sector players are, therefore, worried that the decision would see them part with significant amounts and chase the money for many years since refunds are ‘neither automatic nor immediate’ when they win cases.

‘The issuance of agency notices during disputes may significantly disrupt business operations by restricting access to working capital and liquidity,’ Mr Munene added in his submissions.

‘This risk is particularly pronounced for saccos and other financial institutions, whose operational stability depends on the continuous availability of funds.’