Category: Business Daily

Oil marketer Total Kenya has been ordered to pay Sh20.7 million to a former dealer after the High Court found that the company continued using his business name, Kenya Revenue Authority (KRA) PIN, telephone number and email address months after their business relationship had ended.

The court found that Total Kenya Limited used David Kamau Ngure’s credentials and trade name, Dasken Enterprises, without his consent or authority for about 230 days, between January 1 and August 18, 2020.

‘It is therefore my finding that the Plaintiff has proved, on a balance of probabilities, that Total unlawfully continued to use his business name and KRA PIN after termination of the MLA (Marketing Licence Agreement),’ said the court.

The court further ordered the oil company to relinquish control of Mr Ngure’s email address and unsubscribe his telephone number, while awarding him costs of the suit.

The judgment, delivered on July 27, 2026, arose from a dispute over the operation of Total’s Likoni Road Service Station in Nairobi’s Industrial Area.

Mr Ngure had been engaged by Total as a ‘Young Dealer’ to manage the station under an MLA, operating through his business name Dasken Enterprises.

The relationship was terminated effective December 31, 2019, although Total said the station was formally handed over on February 24, 2020.

Mr Ngure complained that despite the termination, Total continued operating the station using his business name, KRA PIN, telephone number and email address.

The High Court found evidence supporting his claim, including invoices and tax withholding certificates showing that transactions at the station continued to bear his KRA PIN long after the agreement had ended.

Total had denied having access to or control of Mr Ngure’s PIN and related email address, arguing that these remained under the control of his employees before termination.

The company also said the MLA was terminated after it discovered alleged fraud involving the Total Card system, which Mr Ngure could not adequately explain. Total maintained that responsibility for tax obligations remained with Mr Ngure even after termination.

One of the witnesses, Tandu Alarm Systems Limited, confirmed that it fuelled fleet vehicles on credit at the station between December 2019 and July 2020. The invoices issued by Total bore Mr Ngure’s KRA PIN.

Other invoices and a tax withholding certificate issued by Samura Engineering Limited as late as August 18, 2020, also carried the PIN.

The court held that Total had created the tax liabilities through its own actions and should account for and settle them, rather than Mr Ngure being treated as the beneficial owner of the transactions.

‘As such, I find that Total should render a full account of all VAT, PAYE and income tax returns filed using the Plaintiff’s PIN from 1st January 2020 to 18th August 2020 and it should settle all tax liabilities, penalties, and interest arising from those transactions with KRA,’ said the court.

Total was ordered to provide a full account of VAT and income tax returns filed using Mr Ngure’s PIN and to settle the resulting tax liabilities, penalties and interest with KRA.

After Total provides proof of settlement, KRA was directed to delete, expunge or apportion the liabilities from Mr Ngure’s PIN and transfer them to Total’s PIN within 30 days.

The court also ordered Total to settle, within 90 days, all outstanding National Social Security Fund (NSSF) obligations and penalties relating to employees at the Likoni Road station for the period January 1 to December 31, 2020.

Mr Ngure told the court that Total’s continued use of his credentials exposed him to tax liabilities and prevented him from obtaining a tax compliance certificate, besides causing economic and reputational harm.

The court found that his constitutional rights to privacy and property under Articles 31 and 40 had been violated. It also held that Total’s continued use of his personal data without consent after termination of the relationship amounted to a breach of Section 30 of the Data Protection Act.

KRA, which was joined in the case, acknowledged receiving Mr Ngure’s complaint about alleged unauthorised use of his PIN but argued that he retained control over his credentials and could change them.

The High Court, however, found that KRA had acted lawfully but directed it to remove or apportion the liabilities after Total settles or accounts for the transactions.

Total Kenya has since filed a notice of appeal against the judgment.

Kenya does not have a start-up problem; it has a scale-up problem. Every year, hundreds of thousands of entrepreneurs launch businesses, yet relatively few grow into medium-sized enterprises, national champions, or regional players.

The country has one of Africa ‘s most vibrant entrepreneurial ecosystems, with innovative founders, active investors, a thriving fintech sector and a growing business support network. Yet too many businesses remain trapped in survival mode, unable to grow into productive, resilient, and regionally competitive enterprises.

The challenge is not simply the access to money or lack of it. It is the ability to match the right type of finance to the right stage of growth, build strong business systems, exercise disciplined capital allocation, and convert financing into long-term productivity.

According to Kenya National Bureau of Statistics’ MSME Survey, Kenya has more than 7.4 million micro, small and medium enterprises (MSMEs), contributing approximately 34 percent of Gross Domestic Product (GDP) and supporting over 15 million jobs, equivalent to about 85 percent of non-farm employment. These businesses are the bedrock of Kenya’s economy.

Despite their economic importance, financing is often cited as one of the primary obstacles to their growth. The sector still faces an estimated Sh2.5 trillion financing gap, according to World Bank/IFC MSME finance-gap estimates. Estimates suggest that only 20 percent to 23 percent of MSMEs in Kenya have access to bank financing with over 60 percent citing lack of collateral, high cost of credit and stringent documentation as key deterrents.

But the financing gap facing MSMEs is about more than limited credit. It reflects a deeper structural mismatch between the economic importance of small businesses and the availability of patient, appropriately structured capital that supports sustainable growth. It also reflects the reality that many enterprises remain informal, undocumented and operationally fragile, making them difficult to finance at scale.

The challenge, therefore, is not only expanding access to finance, but improving businesses’ readiness to absorb and deploy capital productively.

Too often, the conversation around business finance ends with access to credit. But securing finance is only part of the equation.

The more important question is whether businesses are using the right type of capital for the right purpose. Many firms make the costly mistake of financing long-term assets with short-term borrowing or using equity to fund routine working-capital needs. Both approaches create unnecessary financial pressure, distort cash flows and erode value.

What businesses need is capital fit – the financial equivalent of product-market fit – where the source, term, cost and purpose of capital align with the cash flow profile of the business. Businesses that master this discipline are better positioned to grow sustainably than those that simply raise more money.

In the earliest stages of a business, patient capital is often the most appropriate form of funding. Personal savings, family and friends, angel investors and grants can provide the flexibility needed to test ideas, refine products, and validate a business model before taking on significant financial obligations. Take the example of a technology start-up developing a mobile application.

During its first year, the business is unlikely to require a multimillion-shilling bank loan. Instead, it needs patient capital that allows the founders to refine its product, attract customers, and validate the business model before seeking more funding.

But even at this stage, the objective should not be survival alone. It should be readiness.

Founders must use this period to build the fundamentals that make future growth possible: proper financial records, separation of personal and business finances, sound governance, tax compliance and management systems. Many Kenyan businesses struggle to scale because they remain too informal for too long.

The conversation must therefore move from credit access to credit readiness, because businesses that cannot produce reliable records, forecasts and controls will struggle to convert early traction into scalable finance.

As businesses begin generating consistent revenues, their financing needs become more sophisticated.

Growth requires investment in inventory, technology, equipment, distribution networks and human capital. At this stage, working capital facilities, overdrafts, trade finance and asset financing become essential tools for expansion.

Consider a furniture manufacturer that secures a large supply contract with a national retailer. The business may not need a long-term investment loan; it needs short-term liquidity to purchase timber, pay suppliers, and finance production before payment is received. By contrast, a manufacturer funding a five-year machinery investment through a 90-day overdraft is misallocating capital and setting itself up for recurring cash flow stress.

The issue here is not whether finance exists, but whether it is fit for purpose. In a market where many firms still operate with thin margins and limited buffers, the wrong capital structure can erase the gains from growth. This is one reason so many promising Kenyan businesses stall: they grow faster than their financial systems, and the strain eventually catches up with them.

This is also the stage where competitive advantage begins to shift. Entrepreneurs today can draw from banks, development finance institutions, venture capital, private equity, fintechs and trade finance solutions. Access to capital alone is no longer a differentiator. The real differentiator is how effectively business’s structure capital, manage cash flow, and convert financing into productivity.

In a market where funding options are broader than ever, execution discipline becomes the true source of advantage.

This distinction often determines whether a business remains small or scales into a sustainable enterprise by turning each shilling of capital into higher output, stronger margins, and replicable systems. Kenya’s scaling challenge is therefore not just financial. It is managerial, operational, and strategic.

For SMEs, securing capital is not simply about pitching a compelling idea; it is about demonstrating operational readiness long before approaching potential financiers.

That readiness begins with rigorous market analysis to develop a deeper understanding of one’s target customers, industry trends, competitive dynamics and supply-chain risks well enough to make informed strategic decisions.

It also requires businesses to formalise their operations. Sound business plans, reliable financial records, robust contracting processes, clear organisational structures, and experienced management are not merely administrative requirements but proof that a business has the discipline and capacity to execute its strategy.

But operational strength alone is not enough. It must be underpinned by good governance. A transparent framework, supported by a board of directors or advisory council and clear policies and lines of accountability. This reduces reliance on individual decision-makers and strengthens institutional resilience.

For financiers, these are important signals that a business is not built around one person or one opportunity, but has the structures and discipline required to deploy capital responsibly and sustain growth over the long term.This is also why strong banking relationships matter. The most successful businesses do not approach banks only when they are in distress or urgently need funding.

They build relationships early, share reliable information, and demonstrate sound governance, consistent performance and financial discipline over time. Increasingly, banks assess businesses not only on collateral, but also on the quality of their financial reporting, transaction history, cash-flow management and compliance practices.

At its core, lending is built on confidence. Strong financial records, consistent account activity, sound governance, and disciplined cash-flow management reduce information asymmetry between businesses and lenders, enabling banks to make better-informed credit decisions. The strongest banking relationships are therefore built long before a loan application is submitted.

The next frontier for Kenyan businesses is regional and continental expansion. According to the World Bank, the African Continental Free Trade Area (AfCFTA) opens access to a market of about 1.4 billion consumers with a combined GDP of more than $3.4 trillion. Yet many businesses still prepare only for the Kenyan market, even as the opportunity increasingly requires continental scale.

That gap matters because, according to UNCTAD and Afreximbank, intra-African trade still accounts for only about 15 percent of total African trade, compared with roughly 60 percent in Europe. Regional growth requires capital strategy aligned to cross-border trade, market entry, payment systems, regulatory compliance and trusted commercial networks. Kenyan firms that remain domestically focused risk being overtaken by more agile regional competitors that are better prepared to operate across borders.

Today, institutions are complementing financing with solutions that help businesses to understand new markets, identify trusted trading partners, and build cross-border commercial relationships. Ecobank is already supporting businesses across the spectrum, from MSMEs to established local corporates, by combining access to finance with the tools, networks and market opportunities they need to scale.

Ecobank’s Single Market Trade Hub is doing exactly this by connecting businesses to more than 6,000 verified trade partners across Africa to unlock cross-border opportunities. By combining finance with market access and commercial networks, such platforms help to turn regional trade frameworks such as AfCFTA from high-level policy frameworks into a catalysts for business expansion.

The purpose of financing thereby, is not simply to increase the number of businesses, but to increase the productivity of the economy. When capital is matched to the right stage of growth and deployed strategically, businesses invest in technology, expand production, create better-quality jobs and compete successfully beyond national borders.

Kenya’s challenge, therefore, is not merely to produce more entrepreneurs, but to build more businesses that can scale sustainably. Otherwise, Kenya risks remaining a nation of entrepreneurs without becoming a nation of globally competitive enterprises capable of driving long-term economic transformation.

Kahawa Sukari is one of the few Nairobi estates where strict development controls have shaped its growth and preserved its leafy, low-density character.

Unlike neighbouring suburbs overtaken by high-rise apartments, Kahawa Sukari retains its identity as a residential estate, thanks to rules that limit construction to detached houses of no more than two floors.

These controls, enforced by the Kahawa Sukari Welfare Association, have ensured that the estate remains distinct in a city where land pressure has often led to uncontrolled densification. The result is a neighbourhood where older, character-filled homes sit alongside newer flat-roofed designs, but always within the boundaries of carefully managed development.

‘You cannot do apartments in the estate. The only allowed structures are single-dwelling houses, which should not go beyond two floors-ground, first, and perhaps provision for an attic,’ says Edward Nduiga, a long-time resident and former vice-chairperson of the welfare association.

Edward Kiganjo, Vice-Chairman of the Kahawa Sukari Welfare Association, during an interview in Kahawa Sukari, Kiambu County, on September 26, 2026. Bonface Bogita | Nation

Bonface Bogita | Nation Media Group

At Kahawa Sukari, even domestic staff quarters are subject to specifications. The association must first vet construction plans before they are submitted to the county government.

‘The county will not approve if they don’t see the signature from the association. That’s how we have managed to maintain Kahawa Sukari’s identity,’ Mr Nduiga explains.

While the estate has retained its leafy charm, land values have soared dramatically over the past two decades. In the early 2000s, plots measuring 100 by 100 feet sold for between Sh400,000 and Sh700,000 depending on proximity to the main road. Today, the same plots fetch between Sh12.5 million and Sh15 million.

Mr Nduiga recalls buying his plot in 2005 for Sh500,000.

‘Immediately after improvements to the infrastructure, particularly the main road, the prices skyrocketed to nearly Sh3million. The least you can get now is Sh12.5 million, and closer to the main road it’s Sh15 million,’ he says.

Martin Bernard, who moved to Kahawa Sukari in 2021, bought his plot for Sh9.5 million. Just behind his home, a similar empty plot is now listed at Sh14 million.

This escalation reflects broader trends along the Thika Road corridor, where improved highways, access to institutions, and proximity to commercial centres have driven demand.

Yet Kahawa Sukari’s unique restrictions have added a premium, making its plots more valuable than those in neighbouring Kahawa Wendani, Githurai, and Ruiru estates, which have seen a mashrooming of apartments.

‘When constructing, you are not allowed to take more than a third of the space. It helps to maintain the sanity of the place. You are also not allowed to sublet,’ Mr Bernard notes.

The estate’s history explains its distinctive character. Originally a coffee farm owned by white settlers, the land was later subdivided by Kahawa Sukari Limited.

‘The majority of homeowners here are lecturers and professors from Kenyatta University, and senior army officers. That’s how the estate developed,’ Mr Nduiga says.

The estate’s layout, with its main avenue and branching roads leading to two bordering rivers, further supports its controlled design.

Security arrangements are organised around these avenues, with guards stationed at entrances to individual courts.

Despite the restrictions, Kahawa Sukari has not been been immune to commercial pressures. The estate’s busy centre hosts shops, eateries, and student residences, reflecting demand from nearby universities.

Commercial and residential developments along a road in Kahawa Sukari, Kiambu County, on September 26, 2026, reflecting the area’s rapid growth.

Bonface Bogita | Nation Media Group

Martin Macharia, a resident who owns apartments in the estate, has tapped into this demand. ‘I mainly structured them for students,’ he says.

His bedsitters rent for Sh8,500, while one-bedroom units go for Sh22,000 and two-bedroom units for Sh30,000. Newer apartments near the main road command even higher rents.

‘I have seen one-bedroom houses going for Sh30,000 and two-bedroom houses for Sh45,000, especially in the modern apartments that have come up in the last five years,’ Mr Macharia adds.

Still, the welfare association remains firm in its stance against large-scale apartment blocks within the residential sections.

For all its order, Kahawa Sukari faces challenges. Infrastructure remains uneven, particularly sewerage. ‘We’ve had water reticulation through Ruiru Water and Sewerage. But currently, we are struggling with the sewer,’ Mr Nduiga says.

Water supply, though relatively reliable compared to other estates, is not perfect. Road improvements are ongoing, but security remains a concern, especially along access roads not covered by the smaller security arrangements in individual avenues.

‘The challenge has been security, although with time things have improved,’ Mr Bernard observes.

Another pressing challenge is enforcement of development rules as land values rise. Some owners have attempted to bypass restrictions by disguising multi-dwelling units as single-family homes.

An aerial view of residential homes and properties in Kahawa Sukari, Nairobi, on September 19, 2026.

Wilfred Nyangaresi | Nation Media Group

‘We have rogue land owners. They get approvals for a single dwelling but camouflage four units within one. By the time they finish, there are four rental units,’ Mr Nduiga says.

Such practices threaten the estate’s identity, but the welfare association remains determined.

‘We have a very empowered welfare, which ensures that Kahawa Sukari maintains what the dream of the owners was-controlled development,’ Mr Nduiga insists.

The government has withdrawn Sh46 billion in funding for 41 energy sector projects in the current financial year and transferred the ventures to the newly established National Infrastructure Fund (NIF), triggering doubts about their implementation.

The Parliamentary Budget Office (PBO), which advises lawmakers on economic and budgetary matters, revealed that the government excluded the 41 projects under five agencies and the State Department of Petroleum for the 2026/27 budget in anticipation of the NIF rollout.

The State removed Sh18.8 billion in funding for 12 Kenya Power projects, Sh8.8 billion for 15 Kenya Electricity Transmission Company projects and Sh6.8 billion for some five projects under the State Department for Petroleum, according to the PBO.

‘In anticipation of the operationalisation of the NIF, the government identified several projects in the energy and petroleum sectors mainly undertaken by Government Owned Enterprises (GOEs) whose financing can be weaned off from the exchequer and government loan book and transitioned to the NIF in financial year 2026/27,’ the PBO notes.

PBO says that the government also cut Sh6.46 billion in funding to some three projects being implemented by the Geothermal Development Company (GDC), removed Sh3.97 billion from four projects under the Kenya Electricity Generating Company (KenGen), and Sh1 billion from two projects under the National Oil Corporation of Kenya.

The PBO, however, did not reveal details of the specific projects affected by the government’s budget cuts, but reckons that while transitioning the projects to NIF presents an opportunity to diversify their financing, the speed at which it was done has exposed them to risks of delay.

‘The transition to the NIF presents an opportunity to diversify infrastructure financing, leverage private and institutional capital, reduce reliance on direct budgetary allocations and public borrowing, and improve the structuring of commercially viable projects. However, the sudden transition exposes them to project implementation risks due to changes in the funding structures that will potentially lead to disruptions in budget disbursements,’ the PBO says.

In a report regarding implementation of the current fiscal year’s budget, the office observes that the transition of the projects to NIF will involve repurposing of exchequer funding to other sectors, leaving them to wholly rely on funding by agencies implementing them.

This poses risks to the projects’ unhindered continuity since some of the agencies lack sufficient cash to finance them on their own, the PBO warns.

‘Likewise, it will also entail restructuring of existing contractual agreements with external financiers. Getting consent from external financiers for such a restructuring may take some time, and this will adversely affect implementation of Energy projects which are significantly dependent on donor funding,’ the office says.

NIF is at the centre of President William Ruto’s plan to mobilise private capital for infrastructure development, with the government targeting up to Sh5 trillion in investments over time by using public capital to crowd in private investors.

Among the projects expected to benefit from the fund is the planned modernisation and expansion of Jomo Kenyatta International Airport, as well as investments in transport, logistics, energy and other strategic sectors.

The NIF Act, 2026 provides for the development of an investment policy to guide on what projects can be bankrolled by the fund, a fact the PBO observes may also form part of the obstacle for the 41 projects the State has removed exchequer funding.

‘Another concern is that the transition of the projects to the NIF will also require them to be subjected to the general investment criteria review as provided in the IPS (Investment Policy Statement) including demand validation, commercial viability, financial return, investor readiness and capital mobilisation and risk management,’ the PBO says.

The PBO warns that projects risk stalling as they wait for the review, which is likely to cause cost overruns ‘due to penalties for delayed payments to contractors and commitment fees from approved but undisbursed development financing from lending agencies.’

The office also cautions that transitioning the projects to NIF funding will require reappraisal, restructuring, refinancing, legal reviews, and transaction advisory services, which may increase the current project cost.

‘Therefore, to ensure the successful implementation of the energy and petroleum projects identified for transition to the NIF, the National Assembly should keep an eye on timely operationalization of the NIF, and policy and legal alignment for project migration,’ the PBNO said.

The NIF currently has Sh350 billion in capital from the Sh106 billion proceeds from the government’s sale of a 65 percent stake in the Kenya Pipeline Company (KPC) and Sh244 billion proceeds from the government’s sale of a 15 percent stake in Safaricom.

The PBO also reckons that while an investment policy for the NIF has been developed and approved by MPs, its annual business plan is yet to be developed.

‘With the establishment yet to be fully operational, review and approval of the energy and petroleum projects is likely to be delayed, and this may lead to implementation challenges,’ the PBO says.

The office has also urged MPs to scrutinise affected projects to ensure their contractual agreements with development partners are not breached to the detriment of taxpayers.

Housing-focused Pan-African multilateral development bank Shelter Afrique plans to issue a $ 500 million (Sh64.83 billion) sustainability-linked bond focused on East Africa in the first quarter of 2027. A sustainability-linked bond is a type of bond in which the issuer’s financial or structural terms change based on whether it reaches specific environmental, social, or governance goals. Shelter Afrique said the multi-currency bond will be floated in Kenya, Uganda, Tanzania, and Rwanda.

‘We are in the space of mobilising resources from our local markets. We are currently in the market in West Africa where we are issuing about 60 billion CFA francs in the monetary union to finance housing projects in local currency,’ Shelter Afrique MD and CEO, Thierno-Habib Hann, said while speaking at the second Bullish Africa Summit in New York.

‘We plan to go to market and issue US$500 million worth of local currency sustainability linked bond in East Africa in early 2027 and we are targeting four markets – Kenya, Uganda, Tanzania and Rwanda.’

According to the CEO, the lion’s share of the planned sustainability-linked bond will be floated on the Nairobi Securities Exchange owing to the size and depth of liquidity in the market.

Shelter Afrique had earlier said that proceeds from the bonds would be invested in Kenya, Rwanda, Uganda, and Tanzania. The institution has housing projects and investments in mortgage refinance companies in multiple African markets.

Shelter Afrique last issued a bond in Kenya in 2013, a five-year note of Sh5 billion at an interest rate of 12.75 percent.

Shelter Afrique says that the West and East Africa bonds are designed to ensure that the implementation of housing projects in the two regions is shielded from foreign currency risk associated with borrowing in hard currency.

‘One major risk is currency risk, and that is why we must mobilise resources through our local markets. You can have an amazing project that offers you huge returns, but if your local currency depreciates over the life of the project, that can really eat into your return and potentially push the project to default,’ Hann said.

Foreign currency risk in debt occurs when a borrower takes out a loan denominated in a currency different from their home currency, meaning a drop in the value of the borrower’s local currency makes the debt much harder to repay. Shelter Afrique closed 2025 with a $234.82 million (Sh30.44billion) asset base, of which $174.08million (Sh22.57billion) was attributable to loans disbursed to customers, having grown from $134.7 million (Sh17.46billion) a year earlier.

The development bank has 44 member countries, with Nigeria as the largest shareholder with a 17.01 percent stake. Kenya has a 15.81 percent stake in the bank, while the African Development Bank and the African Reinsurance Corporation hold 11.41 percent and 3.39 percent stakes, respectively.

Dormant members in savings and credit co-operative societies (saccos) grew 14.1 percent to 1.9 million in the year ended December amid reduced disposable incomes that could have forced workers and traders to stop making contributions or borrow on their accounts.

Data from the regulator, the Sacco Societies Regulatory Authority (Sasra), shows 24.14 percent of the 7.87 million Sacco members did not transact on their accounts for more than six months last year.

This emerged in a period when analysts reckon workers’ purchasing power has declined over the past five years on the back of rising taxes, multiple statutory deductions and high cost of living.

Kenya Bankers Association (KBA), the bankers’ lobby, reckons that households’ purchasing power dropped by between 10.7 percent and 12 percent the past five years despite increased hiring and wages.

Owners of inactive accounts are often restricted from accessing their deposits and are required to pay a reactivation fee before retrieving their savings.

Sasra data shows 234, 603 members in deposit-taking (DT) and non-withdrawable deposit-taking (NWDT) saccos became dormant last year, up from 218,435 a year earlier.

Accounts that have remained idle for six months in DT-saccos are termed dormant, while those in NWDT-saccos have a longer period of a year.

Sasra CEO David Sandagi said the growth in overall membership amid deepening share of dormancy should be an ‘area of focus’ for saccos if they are to sustain deposit mobilisation pace that can fund rising appetite for loans.

‘One of the key observations we are making is the level of dormancy, albeit with an increase in overall membership. This must be an area of focus for saccos. It is one thing to leverage increasing membership, and it is another to ensure that economic activity of those members who have joined the sacco is stimulated,’ said Mr Sandagi.

Many saccos restrict withdrawals from accounts classified as dormant, requiring account holders to reactivate them by presenting their identification cards at branches, completing reactivation forms and making a deposit into the account.

Some saccos charge a reactivation fee of up to Sh300 and require a deposit of Sh100 to Sh1,000 in the account to lift the dormancy status.

Total membership in the 357 saccos under Sasra supervision increased 6.6 percent to 7.87 million last year from 7.39 million in 2024.

However, active membership grew by only 4.42 percent to 5.97 million, while dormant membership jumped 14.08 percent to 1.90 million.

The pressure is more pronounced among deposit-taking saccos, which accounted for the bulk of industry lending.

Their gross loans grew 12.98 percent, compared with an 11.89 percent increase in deposits.

The rise in inactive accounts emerged in the year when the economy grew at the slowest pace in five years at 4.6 percent while real wages-earnings adjusted for inflation-grew by 2.0 percent, marking the first time in six years for growth in workers’ earnings to surpass inflation.

The positive growth in real wages, however, masked the impact of increased statutory deductions — including the healthcare insurance levy, housing tax and higher National Social Security Fund (NSSF) contributions that ate into workers’ pay, keeping it below the 2020 levels.

The State uses gross income rather than take-home pay that hits workers’ accounts to compute real wages.

The increase in dormant membership in saccos came as loans grew faster than members’ deposits and savings, widening the gap between the funds saccos mobilise from members and the amount they lend to Sh115.93 billion at the end of December from Sh95.68 billion in the previous year.

Members’ deposits and savings remain the main source of funding for sacco lending, making the rising level of dormancy a concern for the industry.

Members’ deposits and savings increased to Sh832.74 billion from Sh749.43 billion recorded in the previous year, as gross loans and advances grew to Sh948.67 billion from Sh845.11 billion.

Sasra said the mismatch between the appetite for loans and deposits mobilisation has forced saccos to utilise reserves and external loans for lending.

‘While deposits have continued to grow steadily, a notable gap remains between total deposits and gross loans, with loans exceeding deposits. This gap is primarily financed by retained earnings and institutional reserves, with a relatively small proportion funded through external borrowing,’ said Sasra.

Part of the reason saccos’ loan book beats the deposit base is the use of the multiplier model in lending, where many sacco members are allowed to borrow up to three times their deposits using their fellow members as guarantors.

The regulator has asked saccos to develop suitable financial products and services to reactivate dormant members and conduct surveys to establish the reasons for their inactivity.

Across the sector, the gross loans-to-deposits ratio rose to 101.36 percent last year from 100.65 percent a year earlier. The ratio means gross lending was higher than members’ deposits and savings, with the difference being supported by other sources of internal funding.

However, Sasra said the faster growth in loans did not, on its own, signal weakening liquidity because deposits were increasing and new lending was being supported by repayments from existing borrowers.

‘Regulated saccos are, however, challenged to devise strategies to spur the growth in deposits to cope up with the surging demand for loans,’ the regulator said.

The 1.90 million dormant members provide a sizeable pool that saccos could seek to bring back into active participation.

Sasra said the saccos disbursed loans amounting to Sh596.54 billion towards eight key sectors of the economy.

Land and housing remained the largest beneficiary, receiving Sh157.2 billion, followed by education and agriculture (Sh124.51 billion and Sh110.74 billion, respectively). The human health sector received the least funding in loans disbursed during the year, amounting to Sh14.65 billion.

Saccos posted improved loan repayment among members, cutting the non-performing loans ratio for DT saccos to 6.36 percent from 8.56 percent, while that of NWDT saccos improved to 6.44 percent from 7.07 percent.

The regulator attributed this to stricter loan appraisal and approval processes, enhanced loan recovery efforts and improved loan repayment performance among members.

The asset base of the Sasra-regulated saccos grew to Sh1.21 trillion from Sh1.08 trillion, largely driven by DT saccos whose assets hit the trillion mark of Sh1.07 trillion during the review period.

The Supreme Court has agreed to hear an appeal by former Cabinet Secretary Raphael Tuju in a Sh4.5 billion loan dispute with East African Development Bank (EADB).

A five-judge bench, chaired by Deputy Chief Justice Philomena Mwilu, agreed to hear the appeal after reviewing its October 11, 2024 decision in which the judges recused themselves from hearing the case, stalling the matter.

The judges noted that a complaint filed by Mr Tuju at the Judicial Service Commission (JSC), which triggered the recusal to allow the matter to run its course, has since been withdrawn.

‘That the complaints have subsequently and unequivocally been withdrawn, and in exercise of the Court’s inherent powers, we find no justification to perpetuate the recusal beyond this point,’ the judges said.

The court, however, maintained that the change in the circumstances that led to the recusal of the judges does not alter the validity of the ruling.

‘It was the correct and proper decision to make in the circumstances at the time. As a matter of fact, and to buttress this fact, the applicants have not invited us to hold that the ruling was erroneously made,’ said the court.

The apex court said everyone has a Constitutional right to lodge a complaint with the JSC over the conduct of a judge or judicial officer.

‘There is a corresponding responsibility on a litigant not to casually make allegations sufficiently grave to occasion the recusal of five of the seven Justices of the Supreme Court,’ the judges said.

The former CS has been entangled in a protracted dispute with EADB over the 2015 loan. His companies, Dari Ltd and SAM Company Ltd, had a deal with EADB for a $9.3 million (Sh1.2billion) loan for business expansion.

The loans were aimed at financing the construction of Sh100 million two-storey, flat-roofed bungalows sitting on a 20-acre forested land dubbed Entim Sidai and the purchase of a 94-year-old bungalow built by a Scottish missionary, Dr Albert Patterson, which currently operates as a high-end restaurant.

The loan was secured through several forms of collateral, including an indemnity and guarantee agreement dated April 10, 2015.

Among the properties charged as security were Entim Sidai, Tamarind Karen and Dari Business Park. Dari Business Park was sold for Sh450 million in October last year.

When Dari Ltd defaulted, the bank demanded immediate repayment and subsequently filed a suit in the United Kingdom against the company, Mr Tuju, his children, and SAM Company Ltd.

On June 19, 2019, Judge Daniel Toledano of the High Court of Justice (Business and Property Courts of England and Wales) entered summary judgment against Dari Ltd and the guarantors-jointly and severally-for $15,162,320.95.

To enforce the decision, EADB moved to the Kenyan High Court, which recognised the UK judgment on January 7, 2020, under the Foreign Judgments (Reciprocal Enforcement) Act.

Dari Ltd’s application to set aside the UK judgment was dismissed, and the matter escalated to the Supreme Court, but the judges recused themselves.

The court halted the planned sale of other properties-Entim Sidai Wellness Sanctuary-after Mr Tuju challenged the valuation conducted by Knight Frank Valuers, who were appointed by EADB.

Mr Tuju accused the bank of failing to disburse the full loan amount, causing cash flow challenges for the borrower.

The bank defended itself, saying the balance was never disbursed because Dari Ltd breached the agreement by failing to pay $11,462,757 as at November 10, 2017.

Kenya’s sugarcane farmers earned an estimated Sh33.5 billion in the seven months to July as cane deliveries surged, boosting domestic sugar output and easing consumer prices.

Farmers delivered 5.94 million tonnes of cane during the period, up from 4.12 million tonnes in a similar period a year earlier, with the increased supply lifting domestic sugar production to 528,874 tonnes.

The higher deliveries translated into a 52.3 percent increase in estimated farmer earnings, as the average cane price also rose to Sh5,643 per tonne from Sh5,343 over the comparable period.

The jump in cane supplies has provided sugar factories with more raw material after last year’s shortages constrained milling and contributed to a sharp decline in domestic sugar production.

Sugar output rose 44.5 percent to 528,874 tonnes by July from 366,007 tonnes in the same period last year, according to KNBS data sourced from the Kenya Sugar Board.

The recovery has started feeding through to consumers, with the average retail price of sugar falling 3.1 percent to Sh167.02 per kilogramme from Sh172.36 over the comparable seven-month period.

The improvement follows a prolonged period of weak cane availability that forced factories to reduce operations, leaving Kenya more dependent on imported sugar to bridge domestic supply gaps.

The country had last year faced severe shortages of mature cane in western Kenya, prompting the Sugar Board to direct seven factories to suspend milling from July to allow the crop to mature.

The shortage also sent Kenya’s sugar import bill from Uganda and Tanzania soaring 708 percent to Sh6.17 billion in the three months to September 2025, according to official trade data.

The turnaround in cane deliveries marks a significant reversal for factories that struggled to maintain production when farmers had insufficient mature cane to supply mills.

KNBS monthly data shows the recovery gathered pace from November last year, when cane deliveries reached 800,196 tonnes compared with 566,584 tonnes a month earlier.

By June, cane deliveries had reached 998,000 tonnes, 109.03 percent above the 477,439 tonnes recorded in June 2025, before rising to a record high of 1.01 million tonnes in July.

The increased cane flow has been accompanied by a sharp improvement in factory output, with July alone producing 91,022 tonnes of sugar compared with 42,255 tonnes in July 2025.

The recovery is partly linked to improved cane availability following sector reforms, including the reopening of previously dormant State-owned factories under private management arrangements.

Four State-owned factories-Nzoia, Chemelil, Muhoroni and Mumias-were targeted for private management as part of efforts to revive production, reduce losses and improve factory utilisation.

The larger farmer payout comes at a time when the sugar industry entering a more competitive trading environment after Kenya ended 24 years of protection from cheaper Comesa sugar imports.

The country exited the regional safeguard regime in January, removing restrictions that had shielded local millers from cheaper sugar produced by other Comesa members.

The safeguards had allowed Kenya to import up to 350,000 tonnes of sugar from Comesa countries to cover domestic deficits while protecting local producers from cheaper regional supplies.

The removal of that protection means local factories must compete with imported sugar even as they work through higher cane procurement costs and investment requirements.

The pressure was visible in July when sugar millers in western Kenya were reported to be holding large stocks of unsold sugar amid competition from imported and allegedly smuggled supplies.

Nzoia Sugar, for example, was reported to have accumulated 269,750 bags of unsold sugar by July 28, highlighting the challenge of converting higher cane deliveries into stronger factory revenues.

When a customer walks into a shop in Kenya, whether they pay through M-Pesa, Airtel Money, a bank app, or another digital wallet determines which payment route they and the merchant use.

But a new proposed law could make these distinctions less important by pushing Kenya’s digital financial sector toward systems that can communicate with each other and allowing customers to share their financial data with other service providers.

The National Payment System Bill, 2026, introduces mandatory interoperability and open finance, which would reshape how fintechs build their products.

The proposed law requires payment service providers and payment system operators to use systems that can connect with those of other providers, operators and their agents.

Payment service providers handle customer-facing transactions, such as M-Pesa and Airtel Money, while payment system operators such as Pesalink own the underlying infrastructure for settling funds between financial institutions.

The Central Bank of Kenya (CBK) would also have the power to require providers to enter into interoperability arrangements.

This means fintechs would have less room to operate entirely closed payment systems. Different networks would connect, allowing money and payment instructions to move more easily between providers.

Kenya has already moved toward this model through mobile money interoperability and bank-to-mobile-money connections. For example, customers using Airtel Money can pay for goods at stores that use Safaricom’s M-Pesa till numbers.

The Bill seeks to make interoperability a broader feature of the national payment infrastructure rather than something individual providers choose to offer.

‘Each payment service provider or payment system operator shall use systems that are interoperable with the systems used by other payment service providers and payment system operators, and their agents,’ the Bill says.

For fintechs, this could change how they design their products. Instead of building around a single bank, wallet or payment network, a startup could build services that connect to several providers.

The bill defines open finance as allowing a third party, with a customer’s permission, to access and use data held by a payment service provider to offer new or improved services or develop new business models.

It also creates the concept of an account information service, which could allow information from accounts held with different providers to be brought together.

For instance, a Kenyan can have a salary account at one bank, a savings account at another, M-Pesa for everyday spending and a digital loan elsewhere.

Today, each institution largely sees only part of that person’s finances and the customer has to move between different apps, while the institutions have limited visibility of accounts held elsewhere.

Under open finance, the customer could authorise third-party applications to access information from several accounts and present it in one place.

This information could support other financial services: a personal-finance app could analyse spending across accounts, and a lender could, with permission, assess a customer’s financial activity across several providers instead of relying only on its own records.

Similarly, a small business seeking working capital could allow a lender to examine its transaction history across different payment channels.

The proposed law also introduces payment initiation services, enabling users to initiate online payments without directly interacting with their bank or financial service provider. This could allow fintechs to build new payment services on top of existing financial infrastructure.

This model is already more developed in markets such as the UK, where regulated third-party providers can access account information and initiate payments with customer permission.

For Kenya’s fintech sector, this could create room for startups built around the data and infrastructure of established financial institutions.

However, the financial system also creates new risks.

Because transaction histories can reveal income, spending habits, regular payments, relationships and financial difficulties, giving more third parties access to this information makes cybersecurity, data protection and clear customer consent critical.

Recent research by UK law firm TLT Solicitors found that half of financial services companies are concerned about the increased fraud risk as a result of the larger ‘attack surface’ open banking can give hackers.

Two thirds of respondents raised concerns about data loss or misuse through third-party providers.

The technology also raises the question of fraud and liability. If a customer authorises a payment through a third-party fintech and the transaction turns out to be fraudulent, the industry will need clear rules on who is responsible – the bank, fintech, payment system or customer.

As such, regulators globally have had to develop rules covering authentication, consent, data security, liability, complaints and the responsibilities of third-party providers.

Kenya’s bill does not specify how access would work and says the CBK ‘shall make regulations to give effect to this section.’

Details on what data can be accessed, under what conditions, and at what cost would be left to subsequent CBK regulations.

Opening access to financial infrastructure could also make it easier for smaller fintechs to compete with established institutions.

However, experts have warned that this may give large financial and technology companies room to exploit their customer bases and datasets, meaning open finance does not automatically produce a more competitive market.

Payment service providers and system operators will now be required to keep five times as much capital as the minimum capital requirement is raised to Sh250 million.

The National Payments Bill, 2026, sponsored by the Treasury proposes to expand licence categories under payment service providers (PSPs) and payment service operators, acknowledging the evolution of the payments landscape since 2014 when the respective laws were last set.

Under the PSPs licence, payment initiation service providers and account information service providers will be required to have Sh5 million in minimum capital.

Electronic money issuers will be obligated to hold the highest minimum capital at Sh250 million from Sh50 million previously.

Electronic money issuers are entities like mobile network operators or non-bank firms which convert cash into digital money.

Payment system operators including payment gateways, messaging system operators, card scheme operators and switching and clearing system operators must keep between Sh20 million and 50 million minimum capital.

Previously, the scope of payment service providers was narrow and covered only four license categories; electronic retail payment service providers, designated payment instrument issuers, e-money issuers and small e-money issuers.

The players, who are regulated by the Central Bank of Kenya (CBK) have until now been required to keep between Sh1 million and Sh20 million in core capital.

The proposed changes seek to address gaps and challenges identified in Kenya’s national payment system including the legal framework, limited interoperability across payment platforms, insufficient payment system resilience, data fragmentation and real-time visibility, cybersecurity and emerging technology risks.

‘Kenya’s National Payment System continues to evolve rapidly, supported by technological innovation, digital financial services and increasing adoption of electronic payments,’ reads the draft National Payments Policy published alongside the payments bill.

‘However, gaps and challenges remain in the legal and regulatory framework, interoperability, resilience, data and information sharing, cybersecurity, consumer protection, participation in payment infrastructure, cross-border payments, financial literacy, governance and coordination.’

The Central Bank of Kenya (CBK) has currently authorised 40 payment service providers including Safaricom Plc and Airtel Money Kenya Limited who are both approved to issue, process, store, send and facilitate mobile money payments.

The pair is also approved to provide platforms that facilitate the processing of payments on behalf of merchants.

Other approved PSPs include Web Tribe Limited, Cellulant Kenya Limited, Pesapal Limited, Craft Silicon, Direct Pay and Paystack Payments.

The National Payment System (NPS) forms the backbone of Kenya’s financial sector and facilitates the smooth, secure and efficient transfer of funds across the economy.

The payment system has undergone significant transformation, driven primarily by mobile money, fintech innovation and progressive regulation.

In the 1990s, payments in Kenya relied heavily on cash and cheques, with slow and inefficient manual clearing processes.

At the end of the decade in 1998, the Nairobi Automated Clearing House was automated, serving as a catalyst for the modernisation and laying the groundwork for faster and more reliable electronic clearing of cheques and electronic funds transfers.

CBK introduced the Kenya Electronic Payment and Settlement System, a real-time gross settlement system that facilitates high-value interbank transfers.

The launch of mobile money services in 2007 served to revolutionise retail payments by enabling secure, affordable, and accessible digital transactions.

Most recently, Kenya has witnessed rapid digital transformation of its NPS, characterised by mobile-money interoperability, regional payment integration, and expansion of payment solutions, including the integration of digital payment systems in government platforms such as eCitizen.

‘The current phase of NPS reforms focuses on enhancing interoperability, security and regional integration, building on CBK’s National Payment Strategy (2022-2025) , which promoted the principles of trust, security, usefulness, choice and innovation,’ the draft NPS policy adds.

‘As the eco-system continues to mature, the country is now pursuing a modern, unified and adaptive framework for payments to ensure a resilient, interoperable, and inclusive national payment system that enables real-time, secure and affordable transactions while promoting innovation, regional payment integration and consumer protection.’

CBK holds the primary responsibility of regulating and supervising payment systems and PSPs including the authorisation for entities that carry on payment services.

The CBK also holds powers to issue directives and impose supervisory requirements and provide the legal basis for oversight of retail and wholesale payment infrastructure.