Category: Business Daily

Kenya has omitted funding from the International Monetary Fund (IMF) in the national budget for the year starting July in the wake of uncertainty whether fresh talks tied to tough conditions could unlock multi-billion shilling loans.

Documents tabled in Parliament show the Treasury is not expecting new inflows from any of the IMF’s funding options, including the extended credit facility (ECF), the extended fund facility (EFF) or the resilience and sustainability fund (RSF).

This will see the country escape tough lending conditions attached to the fund’s support, including higher taxes, job freezes and spending cuts.

The government has been seen to approach fresh IMF talks with caution after the termination of Kenya’s loan facility in March last year over breached conditions, which saw the country miss out on the final tranche of debt worth $850.9 million (Sh109.8 billion).

The fund completed a staff mission in Nairobi in March and held further meetings at the April IMF-World Bank ?Spring Meetings, which was expected to unlock a new lending programme.

The World Bank Group, a sister organisation to the IMF that mostly disburses funds for development projects, is widely expected to cover the bulk of Kenya’s external cheap financing through its development policy operations (DPO) tool.

The DPO will anchor cheap external financing, with the Treasury projecting inflows of Sh170.5 billion in each financial cycle, beginning in the 2026/27 fiscal year to 2029/30.

The IMF had prescribed painful conditions in the wake of its surging loans post Covid-19 pandemic, including the need to increase tax revenues, cut budget deficits and restructure State-owned enterprises.

World Bank loans, which tend to be long-term, often carry less stringent conditions when compared to the IMF aid, which is short- to medium-term and tackles immediate economic instability.

The lack of IMF funding in the budget coincided with a budget proposal that had not imposed new major taxes or increased existing ones, after deadly protests broke out in 2024 against the government’s measures to raise revenue.

The Treasury is also fretful about introducing new taxes in the budget that comes before the General Election in August 2027.

Treasury Cabinet Secretary John Mbadi previously noted that IMF resources should not be used to plug revenue shortfalls.

‘I want Kenyans to understand that the IMF’s primary responsibility is not to fund the budgets of member countries and is instead for balance of payments support,’ Mr Mbadi said.

‘Going forward, we are trying to minimise our focus on the IMF, but it doesn’t mean that we are stopping our engagements.’

Last month, Kenya emphasised the importance of a funded programme with the IMF as it looked to double down on available cheap external financing sources to offset pressure on domestic borrowing, which has largely plugged the deficit in the face of disrupted foreign debt flows.

‘Support from the IMF and the World Bank would be from the fact that we are getting concessional financing, and it would replace expensive domestic borrowing, reducing debt vulnerabilities by cutting interest costs,’ Central Bank of Kenya (CBK) Governor Kamau Thugge said.

The IMF terminated a multi-year programme with Kenya in March 2025 before it disbursed a final Sh109.8 billion ($850.9 million) tranche.

This was after Kenya failed to honour conditions agreed upon, including the restructuring of the national carrier Kenya Airways and putting restrictions on the use of cash from the fuel stabilisation fund, which was diverted to other uses.

The country failed to meet 11 out of 16 conditions, with others being the placing of curbs on spending, bolstering tax collection and settling suppliers’ dues.

Kenya has faced a dilemma in exercising its access to IMF resources as it seeks to appear as a mature economy that can meet its financing requirements from the international capital markets.

At the same time, shocks presented by the US-Israel war on Iran have increased the odds that the country could be locked out of international capital markets by high interest rates, forcing it to turn to the IMF for funding assistance.

The dilemma was captured at the IMF/World Bank Spring Meetings last month, where Kenya continued discussions with the fund.

‘Kenya is, of course, a market access country or switching towards market access. These days, market access has become very volatile, and the government is cautiously rethinking how to best address its financing needs,’ said Abebe Selassie, the outgoing Director of the African Department at the IMF.

‘They (Kenya) have done a lot of liability management operations to push back big lumpy repayments. As market conditions become difficult, Kenya has been thinking of relying on IMF resources.’

Like other nations that are heavily reliant on energy imports, Kenya is scrambling to stave off shortages of essential commodities, including petrol, while managing cost increases that could drive up inflation.

Kenya is the first larger emerging economy to publicly confirm a formal request to the World Bank for emergency funding to manage the economic shocks triggered by the Iran war.

Legal persons and arrangements play a critical role as drivers of economies all over the world. However, these legal structures may be abused for corruption and money laundering among other crimes.

Against this backdrop, the Financial Action Task Force (FATF), a global money laundering and terrorism financing watchdog, requires countries to set up mechanisms to guarantee adequate, accurate and up-to-date information on beneficial ownership.

It further requires firms to obtain accurate data and to cooperate fully with authorities by making such information available when needed.

Most jurisdictions are facing significant challenges in fulfilling FATF requirements on beneficial ownership transparency of legal structures.

For example, within the Eastern and Southern Africa Anti-Money Laundering Group region, countries that underwent mutual evaluations between 2016 and 2024 achieved low levels of effectiveness, indicating that fundamental improvements are still required.

Failure to effectively implement beneficial ownership transparency requirements renders legal structures vulnerable to misuse for corruption, money laundering, and other illicit activities.

Globally, it is estimated that between 10 percent and 25 percent of government procurement spending is lost annually to corruption, often facilitated through opaque legal structures that conceal beneficial ownership.

The situation is no different in Kenya. In 2024/2025, the Ethics and Anti-Corruption Commission (EACC) said seven percent of corruption reports related to public procurement irregularities. Further, the 2024 money laundering and terrorism financing trends and typologies report observed that manifestations of corruption between 2021 and 2024 majorly bordered on conflict of interest, procurement fraud, embezzlement, and kickbacks.

These trends were prevalent at both county and national levels, with an ongoing pattern of public officials trading either directly or through proxies.

Proceeds of these activities were eventually withdrawn in cash, transferred to accounts of related companies and finally invested across various sectors of the economy.

To address these systemic weaknesses, the Government of Kenya has undertaken several legislative and policy measures aimed at enhancing transparency in the ownership and control of legal persons and legal arrangements.

First, Kenya enacted the Companies (Beneficial Ownership Information) Regulations, 2020, to enhance transparency in the ownership and control of legal persons. The regulations define a beneficial owner as the natural person who ultimately controls a legal person or legal arrangement, or the natural person on whose behalf a transaction is conducted.

Second, a National Risk Assessment (NRA) on Money Laundering and Terrorism Financing of Legal Persons and Legal Arrangements conducted in 2023 rated the overall money laundering threat associated with legal structures in Kenya as medium, highlighting the continued need to strengthen transparency.

Third, reporting institutions are required to obtain and verifying beneficial ownership information from reliable and independent sources.

Fourth, in March 2025, Treasury issued directives on mandatory adoption of the End-to-End Electronic Government Procurement System. The system is intended to enhance transparency and accountability in public procurement.

Fifth, enactment of the Conflict of Interest Act, 2025, which prohibits public officers from being a party to, or beneficiary of, contracts for supply of goods, works, or services to their reporting entities. It also prohibits public officers from exercising official authority to award contract in which they have a private interest.

Sixth, the designation of the BRS as the Registrar of Trusts and initiation of the development of a Trust Bill. Among other provisions, the proposed legislation seeks to establish mechanisms for collecting beneficial ownership information on trusts and to facilitate access to such data by law enforcement agencies.

Transparent corporate structures do not undermine legitimate enterprise; instead, they strengthen investor confidence, protect public finances, and enhance Kenya’s international reputation, particularly in the context of the AML/CFT framework.

MTN Uganda has declared its first quarterly dividend of 8.5 Ugandan shillings (Sh0.2927) per share amounting to a total of Sh6.5 billion.

The new dividend will be paid on June 19 to shareholders who will be on record as of June 1.

The telco, listed on the Uganda Securities Exchange and having Kenyan shareholders among other nationalities, previously paid three dividends starting from the half year.

MTN reported a 3.8 percent drop in net profit to Sh5.99 billion in the first quarter ended March, with the company attributing the performance on weaker-than-expected sales growth.

‘Profit after tax declined by 3.8 percent to Ush174 billion (Sh5.99 billion) with a profit margin of 19 percent as a result of moderate revenue performance following the impact of the internet and mobile money shutdown earlier in the year,’ MTN said.

The Ugandan government ordered suspension of internet and social media platforms for nearly a week in mid-January as the country held its general election.

MTN’s total revenue grew 7.8 percent to Sh31.5 billion in the quarter under review. Total expenses rose at a faster pace of 11.8 percent to Sh15.5 billion.

‘Following this resilient performance, the board approved a first interim dividend of Ush8.5 per share totaling Ush190.3 billion to be paid to shareholders. This is in line with our commitment to deliver strong and consistent returns to our shareholders,’ MTN’s chief executive Sylvia Mulinge said in a statement.

The telco recently amended its dividend policy, lifting payouts to shareholders to 75 percent of net income.

MTN is still in the process of separating its mobile money business MTN MoMo from the telecommunications division, with the split expected to help accelerate growth of the former.

Mobile money is growing faster compared to voice which could soon drop to second in terms of revenue contribution, partly due to falling call rates and increased competition.

Voice revenue increased by the slowest rate of 2.2 percent, held down by a further reduction in what MTN charges rivals to terminate their calls on its network.

This saw the contribution of voice contribution to service revenue fall by 1.9 percentage points to 36.1 percent.

Farmers contracted by BAT Kenya were paid Sh1.4 billion for their delivery of tobacco leaf last year, with their earnings from the cigarette manufacturer rising 27 percent from Sh1.1 billion in 2024.

Growers’ earnings have been disclosed by the Nairobi Securities Exchange-listed firm in its latest annual report.

The company’s payouts to farmers has been rising in recent years as it recruits more producers to feed its manufacturing and processing of cigarettes and cut rag (semi-processed tobacco) that are sold in the local and export markets.

BAT recruited an additional 570 farmers last year, raising their count to 2,440 from 1,870 in 2024.

‘Our leaf growing operations in Kenya are concentrated in the counties of Bungoma, Busia, Migori and Meru, where we partner with a majority of local tobacco farmers through annual contracting,’ BAT said in the report. The company still derives the bulk of its revenue from cigarettes but has taken steps to diversify the business with the relaunch of nicotine pouches in the second half of 2025.

Revenue from the new products stood at Sh154 million last year. The company had introduced nicotine pouches, which it says are less harmful compared to combustible cigarettes, in 2019.

Sales were, however, suspended in 2024 due to regulatory uncertainty. ‘The reintroduction of smokeless products in the Kenyan market reflects our efforts to respond to the evolving preferences of adult smokers while supporting the transformation of our business through the development and availability of alternative nicotine products,’ BAT said.

Revenue from cigarettes still dominated at Sh22.3 billion in the year ended December 2025, followed by cut rag sales which yielded Sh724 million.

BAT supports its farmers to diversify the crops they grow besides providing them with loans and technical expertise in a strategy aimed at promoting their economic resilience.

‘We encourage our farmers to grow alternative crops after harvesting tobacco, to enhance food security and soil nutrition,’ the company said.

‘To facilitate this, we provide seeds for subsistence crops, including certified maize seeds at no cost. Additionally, depending on the season, to further enhance crop diversification, we provide seeds for other crops and plants at market competitive rates.’

Tobacco is among the country’s cash crops that earn Kenyan farmers billions of shillings each year. East African Breweries has also contracted thousands of sorghum growers in Western Kenya who earn over Sh2 billion per year for their produce.

BAT reported a net income of Sh5.25 billion in the year to December 2025, marking a 17 percent rise from Sh4.4 billion the year before.

The profit growth was helped by lower operating costs.

BAT’s gross sales including indirect taxes fell 12.5 percent to Sh35.95 billion, attributed by the company to growing incidence of illicit cigarettes in the domestic market.

If you look at the quality of growth, that’s what I think is important here. From a Kenyan business standpoint, the top-line growth is what I describe as the quality of growth needed, and this is pretty much in line with our medium-term outlook.

For the connectivity business we expect to grow in the high single-digits, driven by momentum in mobile data, and that’s visible. Within mobile data, over 30 million customers are on 4G devices, but only half of them use 1GB plus in a month. So, there are a lot of customers who are not using as much as they would. I think that’s the job to be done.

Coming to the fixed service, we are making investments as we see it as a relatively new business. We don’t consider this as a mature business yet, not only in terms of customer acquisition, but also in terms of the customer experience. There is a lot to be done in this area. We are recruiting more customers, and that’s reflected in the growth momentum.

That’s what gives us the confidence that fixed business will grow. Now we are topping it up with the fixed wireless. By combining fibre and fixed wireless, we think we can grow there.

For M-Pesa, we are adding more services, and we always say that don’t look at each service as a separate line of revenue. Always look at it from impact on the overall ecosystem, and that’s been the story. We are adding more services and that is now allowing the ecosystem to expand.

Are you concerned that a potential economic slowdown from the impact of the US-Israel war on Iran might slowdown this momentum?

Although the headline economic numbers look quite stable, there is an underlying issue on consumer spending and that could show up. It’s something to always watch out for, and the way we try to manage that is to look at the most vulnerable segment of customers. So, it’s not about having one offer for everyone, or one thing for everyone.

You look at what makes sense for a set of customers, and then you try to address their concerns. So, we segment our customers in a way that we can react when some of the concerns impact a specific segment of customers. I think that’s how we would approach shocks from a pricing standpoint.

You have been piloting WIFI tokenisation, tell us more about how that is going?

We do believe that in the true spirit of inclusion, we cannot leave any segment out, because we want to impact all the consumer segments and address affordability. On the mobile data side, at any time of the hour or day, we are offering something.

We now need something for Wi-Fi. Tokenisation to help consumers to purchase Wi-Fi in the moment and use it rather than committing to a monthly or weekly plan. I think that’s the beauty of tokenisation. The initial response seems encouraging, but it’s still a pilot.

You have been seeking partnerships for growth including eyeing collaboration with Elon Musk’s Starlink, how far has that gotten?

There are two areas that we have progressed on. One is on the transmission side, which is technically replacing connections that we have in most remote areas with Starlink connections.

This is progressing well. The other is the enterprise offer for the dish they sell. We are seeking to become the partner in enabling sales to customers. We have now signed the agreement, but then there are still regulatory processes which Starlink needs to conclude.

We have not yet gone to the market, but at the back end, we have completed everything. We’re waiting for regulatory clearance to ensure that we can launch it soon.

Are you still maintaining the breakeven date for Safaricom Ethiopia at March of 2027?

The breakeven projected is on earnings before interest, taxes, depreciation and amortisation (EBITDA).

If you look at the second half of FY26 (October 2025-March 2026) the loss reduction is greater than in the first half and it shows that we are geared for positive EBITDA breakeven in FY 27 (March 2027).

When should the market expect the issuance of your second tranche green bond?

Right now, we are not saying it’s coming in the next few months. I think we’ll come back at some point in time and go to the market. Right now, I think we’re quite comfortable.

It’s not something that will happen soon. Remember it’s a three-year plan. We are deploying the first Sh20 billion tranche now and then at some point in time, we’ll come back and issue the second tranche but there is no definitive timeline.

You have recently secured a 25-year license renewal to operate, what is the significance of this?

It’s an operating license renewal along with all the spectrum licenses. All the spectrum licenses have been renewed for 25 years from the same date as the operating license extension. This is well harmonised as it means that we don’t have to go after the operating license and spectrum licenses renewals separately.

The exuberance of Kenya becoming a newly industrialised middle-income country as envisaged in the Vision 2030 has been gradually dimming.

Retrospectively, the dwindling marginal contribution of manufacturing sector to the economic growth has aborted Kenya’s vision of becoming an industrial hub.

However, a recent collaborative economic transformation assessment between Kippra and Africa Centre for Economic Transformation offer a prognosis.

The assessment embodies an appraisal of Kenya’s economic transformation as chronicled in the Kenya County Economic Development Outlook (Ceto). Kenya Ceto applies a growth analytical framework to evaluate diversification among other indicators. Diversification measures the relative size of the manufacturing and services sectors and the range of exports using four indicators.

The assessment reveals worsening diversification attributable to first, the declining agriculture sub-sector contribution and stagnation of the manufacturing sub-sector.

Second, the assessment unveils geographical disparity based on industrial production with over 80 percent of Kenya’s manufacturing gross value added is generated by just 10 of the 47 counties.

Third, the assessment inferred the dominance of resource-based industries associated with low technology, lower profit margin and lower labour earnings.

Fourth, the findings show that for Micro Small and Medium Enterprises (MSMEs), production diversification is influenced by enterprises size and the gender of majority owners and firm managers. Fifth, business environment remains a major barrier to diversification.

To address the product and geographical disparities, Kenya Ceto proposes industrial diversification clustering based on comparative advantage of each county. In this, the MSMEs can expand the product offerings and tap into new customer needs.

In conclusion, it is imperative to recalibrate the diversification of Kenya’s economy to mitigate external shocks but more important to rekindle the dream of becoming an industrial hub. Geography and gender present complementary enablers of economic diversification by promoting inclusivity and specialisation of county economies. This much we must do.

Kenya CETO findings reveal that while women are active in entrepreneurship, their concentration in low-productivity, necessity-driven enterprises limits their contribution to economic diversification.

County based competitive advantage can be drawn from the unique geographical, cultural, natural, and institutional endowments of the county and enterprises.

The enactment and implementation of the current Geographical Indicators Bill provides an opportunity to protect and unlock more value of the major commodities exports.

Geographical indicators are designed to link products to their origin, quality, and reputation, allowing counties to leverage differentiated, value-added products such as tea, coffee, honey, traditional crops, minerals, cultural and ecological assets amongst others.

Adoption of a deliberate strategy to nurture high-potential enterprises, especially women-led businesses, to scale regionally and globally is another approach at promoting diversity.

Stanbic Bank Kenya has reported a 5.5 percent growth in net profit for the first quarter ended March when the benefits of lower costs and provisions for bad debts were eroded by a heavier tax bill.

The bank’s profit before tax had jumped 20.5 percent but a faster growth in its tax bill saw its net earnings rise by 5.5 percent to Sh3.5 billion for the three months ended March compared to Sh3.3 billion a year earlier.

The subsidiary of Stanbic Holdings Plc had tax deductions of Sh1.4 billion, nearly double the Sh751 million billed a year earlier.

The lender’s operating costs declined 7.8 percent to Sh5.02 billion owing largely to provisions for bad debts declining to Sh350.1 million from Sh855.5 million. The bank’s gross non-performing loans remained unchanged in the first three months of the year at Sh23.3 billion.

Other operating expenses of the bank shrunk 13.7 percent to Sh1.85 billion signalling to growing benefits of digital banking.

‘The growth is not big but it is a good performance considering the low interest rate environment compared to last year,’ said Shadrack Manyinsa, research analyst at Pergamon Investment Bank.

Interest rates have declined following the Central Bank of Kenya (CBK) deliberate moves to ease monetary policy through reduction of its indicative base rate.

The Central Bank Rate (CBR) is lower at 8.75 percent this year compared to 10.75 percent in the first three months of last year.

The bank’s interest income was Sh11.5 billion up from Sh11 billion despite the lower interest regime, with earnings from lending to government and other banks padding their performance.

Stanbic’s investment in government securities rose to Sh137.2 billion from Sh80.8 billion a year earlier. It lent out Sh31.7 billion to other banks resulting in interest from peers more than doubling to Sh1.85 billion.

Stanbic’s loan book expanded to Sh258.1 billion in March from Sh244 billion a year earlier but had shrunk from Sh270 billion in December.

Customer savings with the bank rose by 21.7 percent to Sh411 billion with the low interest regime allowing it to pay lower returns despite the growth in funds. The bank paid out Sh3 billion as interest for the customer deposits down from Sh3.19 billion the previous period.

Stanbic Bank is the first listed lender to release its first quarter results with analysts expecting its peers to record growth in earnings.

‘We expect the same trend of growth –of between seven percent to 12 percent– supported by a larger loan book as indicated by the growth in private sector lending and low cost of funding,’ Mr Manyinsa said of banks’ expected performance.

A smaller loss in Ethiopia and M-Pesa’s double-digit growth helped Safaricom report a 36.9 percent jump in profits, making the Kenyan unit the first to cross the Sh100 billion mark in earnings.

The telecoms operator’s net profit grew to Sh95.6 billion from Sh69.79billion the previous year, allowing it to increase its total dividend payout to Sh80 billion.

The Kenya business continued to be the main profit driver, powered by M-Pesa, the firm’s largest unit, which is on course to generate half of the profits.

The profit for the Kenyan unit alone stood at Sh118.3 billion, while its revenues also crossed the Sh400 billion mark for the first time.

Safaricom reported loss in Ethiopia dropped by 35 percent compared to the previous financial year, which was heavily impacted by a depreciation of the birr currency.

The loss in Ethiopia that is attributed to Safaricom dropped to Sh21.2 billion from Sh36 billion in the same period a year earlier, translating to a gain of Sh14.8 billion.

The telecoms operator launched in Ethiopia in 2022 as the government there opened up the tightly controlled economy to foreign competition and is hoping its presence in Africa’s second most populous country will power future growth.

The higher profitability helped the telecoms operator raise its total dividend payout to Sh2 per share, adding a final Sh1.15 dividend to an interim payment of Sh0.85 earlier in 2026.

Shareholders will receive a combined payout of Sh80 billion, representing more than three-quarters of the telco’s earnings and the highest dividend payout by a Nairobi bourse-listed firm.

Safaricom’s share price rose 6.8 percent to Sh32.1 a piece, having gained 13.2 percent since the start of the year. Its diversification from the saturated voice and SMS business is paying off, with M-Pesa, mobile data and fixed internet emerging as sales drivers.

Safaricom’s revenue rose to Sh414.1 billion in the year to March, from Sh371.4 billion in the same period a year earlier, reflecting a 11.5 percent growth.

Revenue from mobile financial service M-Pesa rose 13.4 percent from Sh182.7 billion, accounting for 45.6 percent of Safaricom’s sales.

‘Monetisation of the M-Pesa ecosystem remains healthy with chargeable transactions growing by 11.5 percent year on year to 42.3 transactions per customer per month,’ said Dilip Pal, the Safaricom Plc chief finance officer.

The volume of zero-rated transactions, which include person-to-person payments below Sh100 and merchant payments under tills, fell slightly to 57.8 percent from 58.6 percent, even as the total transaction volumes rose by 25 percent.

The value of chargeable transactions was Sh30.5 trillion or 73.3 percent of Sh41.7 trillion in M-Pesa transactions in the 12 months.

This implies that Safaricom is now able to generate more revenue from its M-Pesa transactions.

‘Kadogo transactions accounted for 39 percent of consumer payments and 56.8 percent of business payments and grew 40 and 30 percent, respectively. This is how we align our business to our purpose by driving inclusion through affordability,’ said Mr Pal.

Safaricom is also ramping up its data business to offset stagnating mobile calls on increased investments in 4G and 5G networks, as voice saw a small revenue fall due to saturation and rivals like WhatsApp.

The voice business recorded a 1.3 percent gain in revenues to Sh81.8 billion, marking a big shift as mobile data for the first time overtook full-year sales from calls. The telco has in the past five years raced to convert millions of 2G and 3G users to 4G and some to 5G.

This has come through partnerships like the one with Google, where they are offering affordable smartphones, with customers paying as little as Sh20 a day for nine months.

The number of 4G and 5G devices on the network rose by 31.8 percent to 30.8 million from 23.4 million at the end of March 2025 while the average data usage per customer rose by 16.6 percent to 4.9GB per month.

Besides M-Pesa, data is one of Safaricom’s fastest-growing revenue lines, and it hopes that increased smartphone usage will boost it further.

Revenue from mobile data, where Safaricom has been aggressively fighting for market share, rose 14.4 percent to Sh83.3 billion, while fixed internet to homes and offices rose 12.2 percent to Sh20.2 billion. Revenues from SMS dropped 11.8 percent to Sh11 billion as messaging apps like WhatsApp continue to munch its market share.

The shifts in earnings reflect Safaricom’s alteration from a telecom firm to a technology and financial services company offering loans to insurance and unit trusts. Safaricom expects to make a profit in Ethiopia in the year ending March 2027.

‘The Ethiopia business has a clear trajectory towards break-even, supported by healthier industry dynamics,’ said Peter Ndegwa, Safaricom Plc chief executive officer.

Kenya’s digital finance story is often celebrated as a global benchmark for inclusion, and rightly so. Over the past decade, mobile money and digital financial services have brought millions into the formal financial fold.

According to the Central Bank of Kenya, over 80 percent of adults now have access to formal financial services, while data from the Communications Authority of Kenya shows mobile penetration exceeding 130 percent, with tens of millions of active mobile money accounts driving daily economic activity.

Insights from the Money March 2026 Report by Tala provide a timely reflection of the financial pressures facing Kenyan households today. While inclusion levels remain high, financial strain is intensifying.

Nearly 89 percent of consumers state that rising costs are affecting their household budgets, while 73 percent are cutting back on spending just to afford basic needs. At the same time, only 36 percent feel they are on track to meet their financial goals.

This is the gap we must now confront; the hiatus between being financially included, literate, and ultimately being financially secure. This is not a failure of the system but a signal of its next evolution.

The financial services sector should move beyond enabling transactions to enabling resilience. This means building systems that not only connect people to money but also support them in navigating economic shocks, adapting to change, and recovering with confidence.

Financial resilience is not just about access to funds in moments of need but about enabling individuals and businesses to recover, rebuild, and progress without compromising their long-term stability.

It requires solutions that go beyond short-term fixes and address the broader financial journeys of consumers. Resilience remains a defining characteristic of the Kenyan market.

Across the country, individuals and businesses continue to adapt in real time, adjusting spending patterns, diversifying income streams, and leveraging digital tools to navigate uncertainty.

One of the clearest signals of this shift is the changing role of credit. What was once a tool for growth is increasingly being used for survival. Nearly half of consumers are now borrowing to meet essential needs such as food, education, and daily living expenses. The report shows that 46 percent of consumers are supplementing their income through loans, with borrowing largely directed toward essentials such as food, education, and daily living.

This raises a critical question for the industry: Are we equipping consumers with the knowledge to use financial tools effectively or simply expanding access to them? Financial literacy can no longer be treated as a complementary initiative. It must become a core design principle of digital finance.

This means embedding education directly into financial services through transparent pricing, clear product structures, real-time usage insights, and tools that help consumers make better decisions in the moment. Encouragingly, parts of the ecosystem are already evolving in this direction.

For the ecosystem, the opportunity lies in scaling these value additions in a way that is responsible, inclusive, and aligned with the financial realities of consumers. Solutions must continue to reflect how people earn, spend, and manage money because in today’s environment, relevance is the true driver of impact.

he next chapter will not be defined by how many people are included in the system. It will be defined by how well that system helps people understand their financial choices, navigate uncertainty, and build more secure futures.

This is the shift from access, to literacy, to resilience, a shift that recognises financial inclusion not as an endpoint, but as a foundation. As industry leaders, we have a responsibility not just to connect people to financial systems, but to empower them to thrive within them.

Kenya has led before and can lead again, but the measure of success will not just be how money moves, but what that movement makes possible for individuals, businesses, and the economy.

The government plans to expand and toll the Mau Summit-Malaba highway, a move that will require motorists travelling to parts of Western Kenya to pay user fees for their entire journey from Nairobi.

This follows the launch of a pre-feasibility study aimed at upgrading the 243-kilometre highway, converting it into an access-controlled tolled road and expanding its capacity from two lanes to four, according to disclosures by the Public Private Partnership (PPP) Directorate.

With the section from Rironi to Mau Summit already being upgraded into a toll road, this means motorists using the route-including those travelling to Eldoret, Bungoma, Kitale and Busia-could be required to pay for the full trip.

The pre-feasibility study is being funded by the China-led Asian Infrastructure Investment Bank (AIIB). The Beijing-based lender has already procured the services of Canadian management consulting firm CPCS Transcom Limited as the transaction advisor. The study is reported to have commenced in November last year.

‘The strategic transport route is part of the Northern Corridor connecting western Kenya and Uganda and will complement the upstream Nairobi-Mau Summit highway already under construction,’ said the PPP Directorate in its latest disclosures.

‘The highway is also one of nine roads that constitute the Trans-African Highway Network, a continental development policy coordinated by the African Union,’ added the Directorate, a department under the National Treasury.

President William Ruto’s administration aims to upgrade the 175-kilometre stretch from Rironi to Mau Summit, as well as the Rironi-Maai Mahiu-Naivasha and Naivasha-Gilgil sections, under a PPP arrangement. Under this 30-year concession, private investors will charge motorists toll fees to recover their estimated Sh184 billion to Sh200 billion investment.

Toll fees for the Mau Summit-Malaba highway will be reported once the PPP project advances to the feasibility stage, a point when detailed traffic studies, cost estimates are finalised to determine viable tariff levels.

Plans to extend tolling to Malaba come despite concerns over the lack of a viable alternative route for motorists who wish to avoid user fees on the Nairobi-Nakuru-Mau Summit section, particularly daily commuters.

The contracting authority, the Kenya National Highway Authority (Kenha), is said to have already acquired the land for the expansion of the Mau Summit-Malaba highway.

The private investors that have so far been tapped include a consortium involving China Road and Bridge Corporation (CRBC), the National Social Security Fund and Shandong Hi-Speed.

The CRBC-led consortium, which had initially been awarded the entire contract before it was split, had proposed a base toll of Sh8 per kilometre for passenger cars in the first operational year, with tolls escalating by one percent annually. Higher tariffs would be set for heavier vehicle classes.

The highway passes through Eldoret, Webuye, Bungoma, Malaba and Turbo before terminating at the border town of Malaba, in Busia County.

Should the expansion of the highway get the green light, the transport node will become a beehive of construction activity.

Besides the ongoing expansion of the Nairobi-Nakuru-Mau Summit highway, plans to extend the Standard Gauge Railway from Naivasha to Malaba are also at an advanced stage.

Recently published budget documents have also revealed plans to rehabilitate the metre gauge railway to Malaba, signalling that the government does not intend to abandon the old line as it seeks to make the Northern Corridor more competitive.

‘The Northern Corridor is a key part of this road network and serves as one of East Africa’s busiest trade routes,’ said the Directorate.

‘This road links the Port of Mombasa to Uganda, Rwanda, South Sudan, and the DRC sees nearly 3000 daily trucks moving over 35 million tons of cargo annually.’

The AIIB, in which Kenya recently became a fully paid up member, had earlier invited bids for a consultant to conduct a pre-feasibility study on upgrading the 243-kilometre Mau Summit-Malaba Highway into an access-controlled, tolled, four-lane road-marking its maiden activity in Kenya’s projects scene.

AIIB, a multilateral lender founded in 2016 and now boasting 110-member states, finances sustainable infrastructure across developing regions. Kenya formally joined AIIB in September 2024, seeking more flexible concessional long-term funding beyond traditional lenders.

The consultant’s assignment includes reviewing Kenya’s PPP legal and institutional framework, developing delivery-model options and providing a technical outline detailing route alignment, cross-sections, key performance indicators, and tolling strategy.

The study will also compare the Mau Summit-Eldoret-Malaba and Mau Summit-Kericho-Kisumu-Busia-Malaba routes to determine the most economically viable option.

Other tasks include traffic and socio-economic analysis, cost and revenue projections, creation of a high-level financial model and environmental and social screening.

The consultant will further assess climate resilience, roadside services, electric vehicle charging and risk allocation, and conduct value-for-money tests, market sounding, and a roadmap towards full feasibility.

Under Kenya’s transport plan, PPPs are expected to deliver about 12 percent of total investment needs-approximately Sh1.94 trillion.

According to the Kenya National Highways Authority, most of the wayleave, or right-of-way, has already been secured, but the Mau Summit-Malaba segment lacks technical, financial, and environmental assessments-making this pre-feasibility exercise a top priority.

Dr Cavince Adhere, a scholar of international relations focusing on China-Africa relations, said the speed at which AIIB has moved to finance its first Kenyan project ‘shows why Kenya needs this kind of multilateral lender.’

‘It will help Kenya to speed up its infrastructure projects,’ he said, arguing that traditional US-backed institutions have slowed progress with excessive conditionalities. ‘AIIB adds to the basket of partners that have supported Kenya over the past decade.’

As part of China’s Belt and Road Initiative, the AIIB was designed to strengthen connectivity across Asia, Europe, and Africa through road, rail and power projects.

It also serves as a counterweight to US-dominated institutions like the International Monetary Fund and World Bank, both of which resisted Beijing’s push for greater influence within their governance structures.