Category: Business Daily

Kenya has lost its spot as Africa’s top startup funding destination after inflows to Egypt overtook it, underlining the impact of depressed investment activity in the six months to June 2026.

Records show that startups in Kenya attracted $126 million (Sh16.3 billion) in the first half of 2026, to rank third behind Egypt, which attracted $327 million (Sh42.3 billion), and Nigeria, with $254 million (Sh32.9 billion).

The other ‘Big Four’ startup ecosystem on the continent, South Africa, was fourth with $83 million (Sh10.7 billion) raised, according to new data from startup funding tracker Africa: The Big Deal.

The first-half performance in 2026 marks Kenya’s weakest funding haul since early 2021 and is also a decline from the $227 million (Sh29.37billion) raised in the same period last year.

It also coincided with mounting pressure on venture founders to demonstrate sustainable business models to investors after the collapse of several high-profile startups last year.

‘Egypt’s share of the total funding raised on the continent in H1 was at its highest since we started tracking,’ the report says.

‘On the opposite side of the spectrum, after a pretty impressive H2 2025, Kenya fell to its lowest level since early 2021.’

But the tracker noted that the figures exclude electric mobility company Spiro, which raised $327 million (Sh42.3 billion) during the period.

Spiro had previously been classified as a Benin company, but it has since relocated its headquarters to Nairobi and maintains a holding company in Dubai. Africa: The Big Deal said it will now classify the firm as a Pan-African company to reflect the geographical spread of its operations.

Beyond the ‘Big Four’, Tanzania emerged as the fifth-largest funding destination with $52 million (Sh6.7 billion), followed by Côte d’Ivoire with $45 million (Sh5.8 billion) and Morocco with $28 million (Sh3.6 billion).

Kenya also ranked third by the number of startups closing funding deals worth more than $100,000, with 25 companies, behind Nigeria (40) and Egypt (26) but ahead of South Africa (19).

In 2025, Kenya was Africa’s leading venture capital destination, when startups raised $984 million (Sh127.4 billion at current exchange rates), accounting for nearly a third of the continent’s $3.2 billion in venture funding.

This was a 52 percent growth from $638 million in 2024, largely driven by large-ticket deals involving companies such as the asset financing firms M-Kopa and Sun King, as well as the clean cooking energy startup Burn.

The latest funding slowdown coincides with what industry analysts say is pressure on founders to demonstrate strong unit economics to win investors.

Investors say capital remains available but is increasingly flowing only to startups that can demonstrate a clear path to profitability, especially in the wake of recent startup collapses in Kenya.

Over the past year, Koko Networks wound up its Kenyan operations after failing to secure approval to export carbon credits, electric mobility startup eBee laid off most of its workforce, and buy-now-pay-later firm Lipa Later entered administration.

The mobile money transfers startup Bonto, telemedicine provider Antara Health and health technology firm Ilara Health also restructured or cut jobs amid delayed investor commitments and rising operating costs.

‘Capital is being deployed far more discerningly. Investors have dry powder, but the bar has been raised significantly,’ Push Venture Capital partner Benjamin Singh recently told the Business Daily.

‘This year will see a flight to quality, with investment directed toward founders who can demonstrate a clear and realistic path to break-even.’

Across the continent, startups raised $1.36 billion (Sh176 billion) in the six months to June, a slight increase from the $1.44 billion recorded in the first half of 2025. About two-thirds of the capital came through equity financing and the remainder through debt, with 190 ventures raising at least $100,000.

The data shows that most of the capital went to startups in the fintech (financial technology) and logistics and transport sectors, which attracted $556 million and $472 million, respectively. This was 76 percent of all funding raised during the period.

Dubai-headquartered ports and logistics firm DP World has inked a deal to develop an industrial park on the Kenyan coast, signalling plans to diversify into light manufacturing, warehousing and regional supply chains.

The global ports and logistics giant has agreed with GulfCap Africa, an investment and development firm owned by Kenyan businessman and politician Suleiman Shahbal, to develop Mombasa Industrial Park on a 222-hectare Special Economic Zone.

The industrial infrastructure development, to be located less than 20 kilometres from the Port of Mombasa, will be implemented in phases, with the first 40 hectares earmarked for initial construction.

The company did not disclose the value of the investment or provide a construction timeline, and the agreement remains subject to the fulfilment of conditions precedent and completion of formal documentation.

Sources familiar with such an undertaking put the total value of the project in the upwards of $100 million (Sh12.94 billion).

‘Kenya is an important market for DP World and a key gateway for trade across East Africa,’ group CEO Yuvraj Narayan said in a statement.

‘The development of Mombasa Industrial Park reflects our commitment to investing in integrated trade infrastructure that connects ports, logistics and industrial ecosystems.’

The investment expands DP World’s existing presence in Kenya, where it has logistics and market-access operations, positioning it across a broader segment of the trade value chain. DP World already has ties at the Mombasa port where it launched a Port Community System (PCS) in 2025.

The PCS was developed in collaboration with EMEA Port Logistics, and implemented with the Kenya Ports Authority and the government.

While DP World does not operate the Port of Mombasa, the new system enables all port users, both public and private, to benefit from enhanced cargo visibility, improved operational efficiency and faster cargo clearance.

The industrial park will create opportunities for the firm to generate revenue beyond cargo handling and logistics services.

The project reflects a global strategy, where major logistics operators are increasingly combining ports, inland logistics, industrial parks and export processing facilities into integrated commercial ecosystems.

The industrial park could become a manufacturing and distribution platform serving not only Kenya but also neighbouring land-locked countries such as Uganda, Rwanda, South Sudan and eastern Democratic Republic of Congo.

Businesses operating inside the zone would gain proximity to the Port of Mombasa, reducing transport costs and improving access to regional and international shipping routes.

That could make the location a magnet for manufacturers, logistics operators, e-commerce fulfilment centres, food processors, pharmaceutical companies and other export-oriented industries.

DP World said the investment was aimed at creating an environment where businesses could manufacture, distribute and access global markets more efficiently.

Kenya has increasingly sought to convert that transit advantage into domestic manufacturing and value addition by encouraging industries to locate near the port.

The Kenya Bureau of Standards (Kebs) has launched investigations into Chinese retail chains selling products labelled entirely in Mandarin in Kenya after a Business Daily investigation that highlighted how the products violated the law.

For consumers, the label on a product is often the first and sometimes only source of information about what they are buying, which is why it is dictated by different laws.

A range of rules and regulations requires manufacturers, importers and sellers to provide specified information and prohibits them from making representations that could mislead consumers.

The rules vary depending on the product, but the main legal framework comes from the Standards Act, the Consumer Protection Act, the Weights and Measures Act and sector-specific laws governing products such as food, chemicals, medicines and pesticides.

What labels must appear on a product?

For ordinary pre-packed goods, the Weights and Measures (Sale and Labelling of Goods) Rules require packages to carry clear information including the manufacturer’s name and address, the common or generic name of the goods, and the quantity, net weight or measure.

Certain products must also carry a date marking showing the last day by which they may be sold.

The information must generally be displayed conspicuously on the principal display panel, in English, Kiswahili or both languages. The rules prescribe a minimum letter or number height of 2mm.

Imported products must additionally carry the name and address of the Kenyan importer, alongside the manufacturer’s or packer’s details.

Where does Kebs come in?

Kebs is the country’s national standards body and plays a central role in product conformity and market surveillance.

Under the Standards Act, Kebs can develop and enforce standards covering characteristics such as quality, composition, packaging, marking and labelling. Where a product is subject to a mandatory standard, compliance is a legal requirement rather than a voluntary quality choice.

For locally manufactured products covered by mandatory standards, the Standardisation Mark is mandatory. Kebs says manufacturers must meet the relevant Kenya Standard before receiving permission to use the mark, and the Standardisation Mark and permit number are then displayed on the product label.

Imported products can also be subject to conformity verification. Kebs operates pre-market systems and market surveillance, with inspections and testing used to establish whether products comply with applicable standards. Its market-surveillance function covers products ranging from food and chemicals to electronics, textiles and agricultural products.

What are consumers entitled to expect?

The Consumer Protection Act gives consumers the right to receive sufficient information about a product to enable them to make informed purchasing decisions.

This is particularly important for product labelling because information on the package can determine whether a consumer understands what they are buying, how it should be used and whether it is suitable for them.

This means a consumer should not have to buy a product without having basic facts necessary to make an informed decision. Depending on the product, this can include its identity, quantity, ingredients or composition, manufacturer or importer, expiry or best-before information, instructions for use, warnings and other safety information.

The right is especially important where a product poses health or safety risks. A consumer cannot make a meaningful choice about whether to buy or use a product if important information about its contents, risks or proper use is unavailable or presented in a language or manner they cannot reasonably understand.

Are there exceptions?

There are some exceptions where importers may be allowed to import goods that do not comply with the labelling standards. Goods of 50 gramms or 50 millilitres or less where the sale price does not exceed Sh50 may be exempted from re-labelling. The Cabinet Secretary can also exempt particular goods, consignments or classes of goods from some or all of the requirements through a Gazette notice.

There are also practical exceptions within the rules. Where a package is too small to accommodate the manufacturer’s or packer’s name and address, a trade mark or other identifying mark can be used instead. And where products are pre-packed and sold at retail on the same premises, the manufacturer’s or packer’s address need not appear on the package.

But these exceptions are not a general licence to sell inadequately labelled goods. Sector-specific laws may impose additional or stricter requirements, and an exemption under one set of rules does not automatically exempt a product from other applicable laws.

What happens if a business ignores rules?

The consequences range from administrative enforcement to criminal prosecution.

Under the Standards Act, offences for which no specific penalty is provided can attract, for a first offence, imprisonment of up to 12 months or a fine of up to Sh1 million, or both.

A second or subsequent offence can attract imprisonment of up to three years or a fine, or both. Continuing offences can attract an additional fine of up to Sh100,000 for each day or part of a day that the offence continues.

A court can also confiscate and order the destruction of non-compliant goods at the offender’s expense, or prohibit their manufacture or sale until they comply with the relevant Kenya Standard.

The Weights and Measures Act separately makes certain labelling and quantity offences criminal offences. The labelling rules carry a penalty of up to Sh20,000, up to three years’ imprisonment, or both.

Kenya widely receives acclaim as a hotbed for entrepreneurship. Not only do we come up with unique innovations such as in the financial technologies and development economics spaces, but also involve copycat ventures that then outperform the first movers into a sector.

While many millions of us choose entrepreneurship as our main economic activity, millions more of us also choose entrepreneurial side hustles even if we are gainfully employed in the formal job sector. Side hustles range of course from farming to shops to consultancies and everything in between. We cover all the bases.

In Kenya, we are by our very nature and culture a very hopeful and optimistic people. This contrasts to some of our neighbours, such as Ethiopia, where researchers find high degrees of fatalism feeling that there is little one can do to change one’s lot in life and therefore must just face the realities dealt to them. But in Kenya, we actively strive and angle to enhance our economic futures and that of our families.

Commensurate with our entrepreneurial vigour comes a plethora of research from academics on the success rates of business startup ventures in Kenya and around the world.

While determinants of entrepreneurship success, entrepreneurial satisfaction, and entrepreneurial orientation are indeed valuable learnings and are replicated by hundreds if not thousands of aspiring graduate students across East Africa annually, the topics and concepts do not get to the heart of why most people enter entrepreneurship in the first place.

Inasmuch, we stand to fall into the microfinance research trap. For decades from the 1980s through the 1990s and into the 2000s, most observers assumed that if micro business loans given through microfinance institutions were repaid, then that repayment success correlated with better personal life outcomes.

However, by the 2010s when researchers actually started looking into the effects of micro businesses taking on these high interest microfinance loans, only about 25 percent of these business owners had better lives as a result of the loans, while 50 percent had their lives stay at about the same, and a shocking 25 percent of microfinance loan takers were measurably worse off because of taking the loan. So, it turned out that repayment rates did not actually correlate with better lives.

In entrepreneurship, we face the same dilemma. Just because someone is entrepreneurially oriented and their business survives, it does not necessarily mean that they are better off.

In a brand new very high-profile research study that was just published by Maria Tamontseva, Scott Seibert, Jos Akkermans, and Wouter Stam, it looked at a more logical approach to entrepreneurship by investigating perceived career success.

Many entrepreneurs start business ventures because they see the value as creating career success for themselves.

Across the world and right here in East Africa, people are choosing entrepreneurship as their main career with higher and higher frequency. When entrepreneurs see prospective career success through their entrepreneurship, then it cascades into other areas of their lives.

Importantly, entrepreneurs do not experience career success merely when their businesses perform well. They experience success when business performance advances the goals that matter personally to them.

While the existing research shows a widespread tendency to measure every entrepreneur through turnover, profit, employee numbers, or business survival, this is not what matters most to the entrepreneurs themselves.

Even though financial performance does matter greatly, entrepreneurs instead tend to really pursue entrepreneurship due to the aspects of autonomy, having meaningful impact, being able to personally master a skill or craft, greater lifestyle flexibility, better recognition from their communities, the ability to have family continuity, or leaving legacy to their children and grandchildren.

Therefore, in summary, an entrepreneur who earns the most and with the most business success may not necessarily possess the most successful entrepreneurial career. So, researchers, incubators, financiers, and government policymakers need to instead look at what matters most to entrepreneurs themselves and not fit them into one straitjacket.

The Kenya Railways Corporation (KRC) is aiming to increase its presence in the courier business, hoping to capitalise on the current demand for services in this sector, which is currently dominated by an informal delivery network built around upcountry matatus.

The State-owned rail firm has applied for a national courier business permit, signalling KRC’s plans to expand parcel services beyond the Nairobi-Mombasa SGR corridor where it rolled out earlier this year.

A permit approval from the Communications Authority (CA) would allow the State Corporation to collect, sort, transport and deliver parcels and documents across Kenya under a national intra-country courier licence.

‘We’ll do the bulk of the deliveries on the Nairobi-Mombasa line, but we’re also extending to our other routes. We’re not doing last-mile deliveries so clients will pick the parcels from our stations,’ said KRC managing director Philip Mainga in a phone interview.

‘We’re also looking to partner with other courier operators who’ll pick the parcels and do last-mile deliveries.’

KRC launched a dedicated same-day parcel service between Nairobi and Mombasa earlier this year, using the SGR to move consignments between the two cities.

The rail firm says it will use railway stations as collection and distribution points while leaving the final leg of deliveries to customers or partner courier firms.

The approach allows KRC to concentrate on the long-distance movement where rail has an established network while avoiding the cost and operational complexity of building a nationwide last-mile fleet.

The proposed model comes as the courier market undergoes a structural shift from letter delivery towards parcels and logistics, even as overall domestic volumes remain volatile.

Latest data by CA shows that domestic parcel traffic fell 6.1 per cent to 3.7 million in the quarter ended March, down from 3.9 million in the preceding three months.

This came as domestic letters recorded a sharper contraction, falling 20.1 per cent to 636,566 from 796,578 over the same period.

The decline in letters reflects the continued substitution of physical correspondence by email, messaging platforms and other digital communication, leaving parcels as the more relevant growth segment for postal and courier operators.

The State Corporation is entering the market as e-commerce expands demand for delivery services.

Matatus have emerged as a low-cost alternative for moving parcels between Nairobi and upcountry towns, putting pressure on conventional courier operators.

The sector has also seen competition emerge outside the conventional courier model as matatus and buses become widely used to move parcels between towns along established passenger routes.

Operators on upcountry routes offer a network of collection points through transport stages, giving traders and individuals an alternative to formal courier branches.

The model has also been adopted by newer logistics businesses, with some platforms using the existing matatu network to move parcels while providing tracking and delivery guarantees.

KRC’s entry also comes as Kenya’s courier industry adjusts to the growth of online commerce, which has increased demand for movement of goods from sellers to customers.

Kenya’s digital economy has expanded the role of delivery networks for small businesses selling through websites, social media and online marketplaces, making logistics an increasingly important part of the retail chain.

The government’s own review of the postal and courier market structure identifies e-commerce and digital platforms among the forces reshaping the sector, noting the shift from traditional letter mail towards parcel and logistics services.

The CA has been reviewing the licensing framework to address changes in market concentration, competition, service segmentation and the emergence of digital platforms.

The regulator’s latest market review is intended to partly remove entry barriers and clarify licensing categories as competition increases.

The regulator says the market is moving towards a parcel-driven and logistics-oriented model as traditional postal traffic loses ground.

‘As the market evolves from traditional letter mail to parcel-driven and logistics-oriented models, our regulatory approach must also adapt to remain relevant and forward-looking,’ said CA Director-General David Mugonyi.

That shift has opened space for operators with existing transport infrastructure to enter the market, such as KRC, which already has railway stations, trains and established freight operations along several corridors.

The corporation has also been seeking to expand the commercial use of its railway network beyond passenger services and traditional freight.

KRC has announced plans to reopen and develop additional railway routes, including the Gilgil-Nyahururu branch, while rehabilitation of the Voi-Taveta line is under way.

As companies pour millions of shillings into influencer marketing, disputes over contracts, deliverables and payment are increasingly following the industry’s rapid growth. One such disagreement landed in court, with media personality Willis Raburu accusing East African Breweries Plc (EABL) of failing to pay for work linked to the Furaha City Festival.

The Milimani Commercial Magistrate’s Court has ordered EABL to deposit Sh10 million in a joint account held by lawyers for all parties pending the hearing of a commercial dispute filed by Raburu.

Senior Principal Magistrate A. Nyoike issued the order while declining Raburu’s bid to suspend or revoke EABL’s operating licence over the alleged unpaid contractual fees. The court held that such an order amounted to a mandatory injunction, for which the applicant had not met the required legal threshold.

Raburu, through his company Steizon Limited, sued Game Changer Marketing Limited and EABL, claiming he was engaged to provide influencer marketing, branding, event coordination and digital promotion services for the Furaha City Festival held in December 2024 at a fee of Sh10 million.

He argues the fees were not paid, yet he fully delivered the agreed services, including producing more than 60 social media reels and over 100 static posts, coordinating influencers and managing event logistics. He further says he submitted a post-event report and made repeated payment demands.

Game Changer denied engaging Raburu for the Furaha event, maintaining that its only role was in the earlier Chrome Wabebe Campus Caravan campaign, for which Raburu had already been paid after EABL approved the costs and issued a purchase order.

EABL also disputed liability, arguing that the Furaha event was the culmination of the Wabebe campaign rather than a separate engagement and that no second purchase order or executed contract existed for the claimed Sh10 million.

In his ruling, Magistrate Nyoike however said, ‘the conflicting evidence must be tested at the hearing.’

The court also dismissed EABL’s objection that the suit was barred by the doctrine of sub judice, finding that the company had failed to demonstrate that a related High Court case was still pending after Raburu showed it had been withdrawn.

However, despite declining to compel immediate payment of the disputed Sh10 million, the magistrate ordered EABL to deposit the amount as security in a joint account operated by the parties’ advocates pending the determination of the suit.

High income status within a generation is now official policy. Yet at the current growth, Kenya won’t get there until well into the next century. The gap is about savings and investment, not vision.

In an address on July 30, President William Ruto invited the country to a National Conversation to write a development charter that will succeed Vision 2030.

Behind it sits the working group report chaired by Prof Peter Anyang Nyong’o and Prof Hiroyuki Hino. The phrase it uses is unambiguous: a First World, high income and industrialised nation within one generation.

Before we debate the route, we should be honest about the distance.

The World Bank classifies an economy as high-income when gross national income per person exceeds a threshold that is adjusted annually for inflation. For now, that threshold is $14,375. Kenya is at roughly $2,400. The threshold rises by around two percent a year.

Kenya’s economy grew by an average of 4.9 percent a year between 2010 and 2024, against a population growing at close to two percent.

That is about three percent per person per year.

Compound that against a threshold rising at two percent and Kenya reaches high-income status in roughly 180 years – around the year 2200. To arrive by 2063 instead, income per person would have to grow by about seven percent annually for 37 years, which implies annual GDP growth of roughly nine percent.

Vision 2030 set a target of 10 percent and delivered 4.9. Our best single year since the 1970s was 7.1 percent, in 2007. The economy fell to 1.5 percent the following year.

Since 1990, only 34 middle-income economies have made it to high income, and more than a third of those did so through EU accession or newly discovered oil.

Sub-Sahara has one high-income economy, Seychelles, a state of about 130,000 people. Vietnam was reclassified by the World Bank as upper-middle income this month, 35 years after its reforms began. Kenya remains lower-middle income.

The ambition places Kenya where most countries fail, in a region it has never been done at scale, on a timetable faster than the fastest recent performer has managed.

Every economy that has made this leap did so on the back of extraordinary investment. The East Asian tigers ploughed between a quarter and two-fifths of national output back into productive assets for decades.

Vietnam and South Korea still run gross capital formation around 32 percent of GDP. Kenya’s stands at 16.8 percent, below the world average of 22.3 percent and well below our own 1978 peak of 29.8 per cent. Gross national savings hover between 12 and 16 percent.

Public debt has passed Sh13 trillion, roughly 69 percent of GDP against a statutory anchor of 55 percent due by 2028. Treasury says debt service could absorb close to 91 percent of ordinary revenue in 2026/27 financial year.

To its credit, the report understands the productivity of half of the equation. Its central argument is about sequence rather than ambition: land reform, then agricultural productivity, then labour intensive manufacturing for export, then the absorption of technology.

Manufacturing has fallen to about 7.2 percent of GDP against a Vision 2030 target of 15, and 83.6 percent of employment sits in the informal sector.

By grounding the charter in Article 43, which guarantees health, housing, food, water, social security and education, he shifts development from a preference of those who govern to an obligation owed to the governed. A charter, unlike a plan, sets standards a government can be measured against.

The report is quiet on where the investment comes from, and quieter on land, listing secure tenure without confronting the redistribution that made the Asian sequence work.

There is also a timing problem: the working group proposes launching the Vision by the end of 2026, while the Conversation begins on August 12. Four months is not a national consensus.

The test for the National Conversation is narrow. Does it produce numbers Kenyans can hold governments to: an investment rate, a savings target, a manufacturing share of GDP, a debt-service ceiling, a date? Get the numbers into the charter and the ambition becomes a plan. Leave them out and we will be reading a fourth grand vision in another 20 years, asking once more why the last one did not hold.

Investors have been denied a premium return on the first infrastructure bond issuance in a year after the Central Bank of Kenya’s (CBK) reopened papers that rank among the lowest in returns in the market.

In the August 2026 sale, the CBK has reopened three previously issued bonds that pay annual interest of 11.75 percent, 12.67 percent and 12.74 percent, avoiding more lucrative options for investors whose annual return ranges from 13.7 percent to 18.5 percent.

These rates are also at par with the net returns for other ordinary bonds that have been issued or reopened in recent months, meaning there is no advantage to be gained by buyers who had kept their capital in hand waiting for the infrastructure papers.

The CBK has in recent months reopened long-term bonds that carry annual interest of between 12.9 and 14.2 percent. Net of withholding tax of 10 percent, these papers pay investors between 11.3 percent and 12.8 percent.

Unlike ordinary bonds, infrastructure papers are not levied the withholding taxes of 10 or 15 percent on interest.

Previous infrastructure bond sales tended to pay a premium return to buyers compared to other securities, due to a combination of the tax free status and relatively high annual interest rates.

This premium resulted in large oversubscriptions whenever they were issued in the past, with some sales realising bids in excess of Sh200 billion against targets of between Sh50 billion and Sh90 billion.

The previous infrastructure bond that was issued in August 2025, for instance, realised a record Sh323.4 billion in bids, against its target of Sh90 billion. The cash offered to the government by investors was nearly equivalent to the Sh327 billion it cost to build the Mombasa-Nairobi phase of the standard gauge railway.

The infrastructure bonds account for the most lucrative securities issued by the government in the last five years, led by an 8.5-year bond sold in February 2024 at 18.46 percent, and a 6.5-year bond issued in November 2023 at 17.93 percent.

To get similar returns from taxed bonds, the annual interest rates would need to be 20.51 percent and 19.92 percent.

Other high paying infrastructure bonds issued recently include a seven-year paper sold in November 2022 at 15.84 percent, a 17-year security sold in March 2023 at 14.4 percent and a 14-year bond floated in November 2022 at 13.94 percent.

The CBK avoided these high paying bonds when picking the papers to reopen for the August 2026 sale that is targeting Sh150 billion. It instead went for a 16-year bond issued in October 2019 at 11.75 percent, an 18-year paper from April 2021 at 12.67 percent and a 21-year bond from September 2021 at 12.74 percent.

Reopening the relatively long dated bonds at government-friendly rates fits in with the CBK’s policy of lengthening the maturity profile of government domestic debt while keeping borrowing costs low amid a growing public debt burden.

For retail investors who put up bids of Sh1 million or less, the reopened bonds represent relatively short securities due to amortisation clauses that allow the CBK to repay part of the principal ahead of full maturity.

Amortisation in a bond means the staggered repayment of the principal amount within the life of a bond, usually done in order to lessen the burden of a large bullet settlement when the paper matures fully.

On the 16-year bond, the government will repay 50 percent of principal in October 2030, while the 18-year bond will settle half of its principal in April 2030.

All investments below Sh1 million will however be repaid in full at the amortisation date, meaning that the bonds are effectively three or four-year securities for investors who fall under this category.

Kiru Tea Factory Company Limited has asked the High Court to allow it to join a constitutional petition by Citibank Kenya, which seeks to stop police investigation into the approval and disbursement of a $2.02 million (Sh261 million) loan.

The farmers-owned company, which is managed by the Kenya Tea Development Agency (KTDA), says it was excluded from the bank’s court proceedings that halted the Directorate of Criminal Investigations (DCI) probe into the loan facility.

In its application to join, the company says having lodged the complaint that triggered the DCI investigation, it should be heard before the court determines whether the probe can proceed.

Citibank moved to court in June this year, maintaining that the DCI was unlawfully criminalising a commercial lending decision involving the loan advanced to the Murang’a tea factory.

Citibank, N.A. Kenya is a branch of Citibank, N.A., a federally chartered National Banking Association, organised and existing under the laws of the United States of America.

The bank said the DCI summons contained “vague, unparticularised allegations” and sought to investigate an alleged offence of “negligently accepting a credit application”, which it argued is unknown to the criminal law.

But Kiru factory, in its court papers, says the interim orders issued on June 15 directly affected its complaint, yet it was neither named as a party nor allowed to respond before the court temporarily stopped the investigation.

‘The petitioner deliberately excluded Kiru Tea Factory Company (KTFC) from the proceedings and obtained orders it ought to have known would affect the rights of KTFC. The Board of Directors of the applicant (Kiru) never authorised, applied for, or approved the loan of $2,020,000 (Sh261.38 million) from Citibank N.A.,’ says the deponent of an affidavit field by Kiru.

According to KTDA’s official records, Kiru Tea Factory was commissioned in 1993 and serves more than 8,000 smallholder tea farmers through 52 buying centres in Murang’a County.

The factory says those growers have a direct interest in the outcome of the bank’s petition because they ultimately repaid the disputed loan.

Kiru asks the court to join it as an interested party and permit it to respond to Citibank’s petition.

Kiru’s advocate argues the case seeks to halt investigations arising from the company’s own complaint and therefore directly affects its constitutional rights.

The factory says it reported the matter to the DCI after commissioning audits and reviewing documents relating to the loan.

Kiru’s directors say investigators were examining allegations that the facility was obtained without lawful authority and that the proceeds did not benefit the company. Those allegations have not been determined by the court.

Kiru says the investigation goes beyond recovery of a commercial debt. It argues police are examining how the facility was procured, whether corporate documents used to secure it were authorised and who ultimately benefited from the money. The company says it wants investigators allowed to complete that work.

Citibank, however, presents a different account in its constitutional petition. The bank says the DCI is investigating its CEO in Kenya, , over the approval and disbursement of the loan, effectively criminalizing an ordinary banking transaction.

It argues the alleged offence of “negligently accepting a credit application” is unknown to criminal law and that the summons violates constitutional protections.

Earlier court filings show the DCI obtained magistrate’s court warrants seeking Citibank account-opening records, statements, RTGS instructions and other banking documents linked to the disputed facility.

Kiru argues it has an identifiable legal and constitutional interest because the petition seeks to stop investigations arising from its complaint.

“KTFC’s cause is at the heart of the dispute, and its interest sought to be defeated by the petition is not peripheral,” a director of Kiru said in the affidavit. “KTFC is best placed to articulate its interest.”

The petition is scheduled to be called in court on September 17.

Commercial banks are betting on traders and builders as the country’s drivers of economic expansion, channelling more than half of fresh credit into commerce and construction businesses.

Trade, building and construction sectors accounted for Sh195.5 billion, or 54.22 percent, of new net credit in the year to May 2026, data by the Central Bank of Kenya shows, while manufacturers continued repaying loans.

This came in a period when bank lending to the private sector rose by Sh360.6 billion compared with Sh75.2 billion the year before.

Trade emerged as the biggest beneficiary after absorbing Sh153.5 billion in additional credit, or 42.6 percent of all new private-sector lending created during the year, signaling where lenders expect business activity and economic growth to strengthen.

The shift in lending suggests banks expect Kenya’s economy to be powered by commerce, retail activity, infrastructure projects and agricultural production rather than factory expansion or logistics.

‘Improved uptake of credit across sectors is expected to support growth, particularly in trade, building and construction, agriculture and consumer durables,’ CBK Governor Kamau Thugge said after the June Monetary Policy Committee meeting.

Construction, trade and agriculture, Dr Thugge said, were recording increases in bank lending, reflecting stronger demand for credit in those sectors.

Building and construction received Sh42 billion in additional credit in the year to May, agriculture Sh46.6 billion and consumer durables Sh42.1 billion, reflecting a pattern that favours sectors linked to domestic demand, government projects and household spending.

The lenders made these bets after more than a year of gradual monetary easing in borrowing costs, with the weighted average lending rate falling to 14.5 percent in May from a peak of 17.22 percent in November 2024.

The lending rates, however, remained relatively elevated, sitting above the roughly 12 percent levels in early 2022.

That means banks expanded credit before the cost of money returned to the lower levels that prevailed before the 2022-2023 global supply-chain disruptions triggered a wave of central-bank interest-rate hikes, suggesting lenders are selectively directing funds toward sectors they believed would generate stronger growth and more reliable repayments.

Manufacturing was one of only three major sectors where credit shrank, falling Sh38.6 billion to Sh547.6 billion despite overall private-sector lending expanding by 9.3 percent.

Transport and communications lending declined by Sh28.9 billion, while real estate remained largely flat, indicating lenders remain cautious about sectors exposed to high operating costs and slower investment cycles.

The contrast highlights a growing divide inside the country’s productive economy, with banks favouring businesses that generate cash quickly over capital-intensive industries requiring longer investment horizons.

The CBK governor said the manufacturing contraction resulted from net loan repayments in April and May, meaning existing borrowers paid more debt than they borrowed during those months.

‘In the case of the manufacturing sector, there were net loan repayments in both April and May, which explains the contraction in credit in both of those months,’ Dr Thugge said.

‘It is expected that this will recover in the coming months.’

Even with that explanation, the bank lending figures show financiers committed substantially more capital to commerce than to manufacturing, underscoring where lenders currently see stronger opportunities and lower risk.

Trade is often considered one of the fastest-moving sectors for bank lending because businesses require working capital to finance inventories, imports, distribution networks and day-to-day commercial activity.

The increase in lending to traders suggests banks expect consumer demand and business transactions to remain resilient despite persistent cost pressures across the economy in the wake of unresolved Israel-US war with Iran.

Construction represents the second major pillar of that optimism, according to the industry data.

Credit to the sector jumped 26.2 percent, reflecting expectations that affordable housing projects, infrastructure works, settlement of pending government bills and public-private partnerships will sustain building activity.

The resurgence follows the Ruto administration’s decision to restart hundreds of road projects that had stalled under an estimated Sh650 billion backlog of unpaid bills owed to local and international contractors.

More than 500 road projects resumed from 2025 after the Roads ministry negotiated a return-to-work arrangement backed by an initial Sh123 billion payment, restoring contractors’ cash flows and renewing demand for bank financing.

Dr Thugge says the industrial sector is expected to remain resilient largely because of construction activity and government-backed investment programmes.

Agriculture delivered one of the strongest performances, with credit rising 32 percent to Sh192 billion during the year to May.

Banks have traditionally been cautious about agricultural lending because of weather-related risks, making the latest increase particularly significant.

Dr Thugge attributes the improved outlook to favourable weather conditions which are expected to support agricultural growth through 2026 and 2027.

That combination of stronger farm lending and higher trade financing points to an economy increasingly anchored in food production, distribution and domestic commerce.

Consumer durables lending also expanded, suggesting banks remain willing to finance household purchases despite elevated living costs.

Together with a 4.9 percent rise to Sh591.6 billion in lending to private households, the data indicates that domestic consumption remains a key component of the credit recovery.

On the other hand, manufacturing and transport remain vulnerable to higher electricity and fuel costs, expensive imported inputs and weaker industrial investment, pressures that continue to weigh on borrowing demand and repayment capacity.

Dr Thugge warned in June that higher energy prices were expected to affect manufacturing, transport and storage, accommodation and food services, and wholesale and retail trade.

Banking industry executives say factories are still struggling to regain momentum despite policy efforts aimed at boosting production.

‘Manufacturing has never really fully recovered since Covid days. There’s policy work that is being done to support it, but there is still a lot of work to be done there,’ KCB Group Chief Financial Officer Lawrence Kimathi said in March, in reference to a sector that accounted for 14.8 percent of the lender’s gross loan book last year.

The Kenya Association of Manufacturers’ 2026 Manufacturing Priority Agenda identifies multiple pressures holding back industrial expansion, including heavy taxation, high electricity costs, weak global competitiveness and cash-flow constraints.

Manufacturers also face expensive imported raw materials, levies such as the Import Declaration Fee and Railway Development Levy, delayed VAT refunds, and competition from counterfeit and contraband goods.

Those structural challenges partly help explain why factory borrowing remains weak even as lending rates have eased and banks expand credit to faster-growing sectors.

The latest figures, therefore, point to a recovery in private sector credit that is uneven rather than broad-based.

The data shows banks are not withdrawing from the economy, but are reallocating capital toward activities they believe will expand faster and generate stronger cash flows.