Category: Business Daily

Big banks face a reduced headroom for paying hefty dividends to investors as the Central Bank of Kenya (CBK) pushes for enhanced core capital, which is used to absorb unexpected financial losses.

New proposals by the CBK require large lenders such as Equity, KCB and Co-op Bank to hold larger buffers to prevent them from falling into trouble and disrupting the economy or requiring a taxpayer-funded bailout.

This is in addition to the minimum core capital requirement of Sh10 billion by 2032.

Also known as Common Equity Tier I capital, core capital is the highest quality capital a bank holds, primarily made up of ordinary shares and retained earnings, and serves as a cushion against financial stability.

The new framework for supervision of domestic systemically important banks by the CBK, if adopted in its present form, will potentially compel big banks to cut back on dividends as they build up their retained earnings to ensure they adhere to the strict requirements of the regulator.

‘In order to enhance the resilience of domestic systemically important financial institutions, the framework requires these banks to hold higher levels of capital through additional loss absorbency requirements. These requirements aim to reduce the probability of domestic systemically important financial institutions failure, provide a buffer to absorb losses during periods of stress and limit the need for public sector support,’ the CBK says.

‘The additional capital is to be implemented through the Common Equity Tier I capital requirement. Additionally, the enhanced supervision and robust recovery and resolution planning to reduce systemic risks and ensure resilience strengthens financial stability and minimise the impact of domestic systemically important banks’ failures,’ the framework states.

Kenya’s big banks have been paying substantial dividends over the years, backed by core capital topping the Sh100 billion mark for some institutions.

The 12 listed banks paid total dividends of Sh117.2 billion for the year ended December 2025, amounting to nearly half of the Sh245.9 billion that all Nairobi Securities Exchange-listed firms paid in their latest financial years.

For the full year ended December 2025, Co-operative Bank raised its dividend per share by 66.6 percent to Sh2.50 from the prior year’s Sh1.50 while Equity Group lifted its distribution by 35.2 percent to Sh5.75 from Sh4.25 over the same period.

In the half year ended June 2026, several banks bumped up their dividend on the back of strong earnings.

KCB Group, for instance, increased its interim dividend by 50 percent to Sh3.0 per share and NCBA Group hiked its interim dividend by 50 percent to Sh3.75 per share.

The CBK now wants the country’s big banks to be supervised more closely, keeping up with the trend of regulation of global systemically important banks, which started in November 2011 in reaction to the fallout from the 2008 global financial crisis.

According to the CBK framework, domestic systemically important financial institutions are financial institutions operating in one or more countries and whose disorderly failure would cause significant dislocations in the domestic or regional financial system and adverse economic consequences in the country or region.

The regulator says four indicators -size, interconnectedness with other institutions, complexity and substitutability (difficulty in being replaced in a specific service)- can determine a domestic systemically important bank.

‘The size of a bank can be regarded as the key measure of systemic risk. The larger a bank is, the higher the potential damage that arises from its failure,’ the regulator said.

Also known as Common Equity Tier I capital, core capital is the highest quality capital a bank holds, primarily made up of ordinary shares and retained earnings, and serves as a cushion against financial stability.

The new framework for supervision of domestic systemically important banks by the CBK, if adopted in its present form, will potentially compel big banks to cut back on dividends as they build up their retained earnings to ensure they adhere to the strict requirements of the regulator.

‘In order to enhance the resilience of domestic systemically important financial institutions, the framework requires these banks to hold higher levels of capital through additional loss absorbency requirements. These requirements aim to reduce the probability of domestic systemically important financial institutions failure, provide a buffer to absorb losses during periods of stress and limit the need for public sector support,’ the CBK says.

‘The additional capital is to be implemented through the Common Equity Tier I capital requirement. Additionally, the enhanced supervision and robust recovery and resolution planning to reduce systemic risks and ensure resilience strengthens financial stability and minimise the impact of domestic systemically important banks’ failures,’ the framework states.

Kenya’s big banks have been paying substantial dividends over the years, backed by core capital topping the Sh100 billion mark for some institutions.

The 12 listed banks paid total dividends of Sh117.2 billion for the year ended December 2025, amounting to nearly half of the Sh245.9 billion that all Nairobi Securities Exchange-listed firms paid in their latest financial years.

For the full year ended December 2025, Co-operative Bank raised its dividend per share by 66.6 percent to Sh2.50 from the prior year’s Sh1.50 while Equity Group lifted its distribution by 35.2 percent to Sh5.75 from Sh4.25 over the same period.

In the half year ended June 2026, several banks bumped up their dividend on the back of strong earnings.

KCB Group, for instance, increased its interim dividend by 50 percent to Sh3.0 per share and NCBA Group hiked its interim dividend by 50 percent to Sh3.75 per share.

The CBK now wants the country’s big banks to be supervised more closely, keeping up with the trend of regulation of global systemically important banks, which started in November 2011 in reaction to the fallout from the 2008 global financial crisis.

According to the CBK framework, domestic systemically important financial institutions are financial institutions operating in one or more countries and whose disorderly failure would cause significant dislocations in the domestic or regional financial system and adverse economic consequences in the country or region.

The regulator says four indicators -size, interconnectedness with other institutions, complexity and substitutability (difficulty in being replaced in a specific service)- can determine a domestic systemically important bank.

‘The size of a bank can be regarded as the key measure of systemic risk. The larger a bank is, the higher the potential damage that arises from its failure,’ the regulator said.

‘When a large bank collapses, other banks are unlikely to fully replace its activities. Failure of a large and well known bank negatively impacts confidence in the banking system as a whole. In determining the size of a bank, this framework shall consider the leverage ratio [indebtedness] exposure measure of a bank relative to the aggregate value of the Leverage Ratio exposure measure for all banks in Kenya’s banking sector.’

At a global level, the collapse of America’s investment bank Lehman Brothers in September 2008 set off a contagion that was felt around the world, featuring bankruptcies and severe financial crises in countries such as Iceland and Dubai.

The focus on keeping Kenya’s large banks on a tighter leash comes at a time when smaller institutions are undergoing recapitalisation with the ultimate target of hitting a Sh10 billion core capital requirement by the close of 2032, signalling increased efforts to put the entire country’s banking sector on more solid ground.

The Business Laws (Amendment) Act 2024 amended the Banking Act to provide for a staggered approach with annual hurdles towards the Sh10 billion core capital target. But the Finance Act 2026 repealed the annual hurdles and provided only for the 2032 Sh10 billion target.

‘To allow flexibility in achieving this objective and following widespread consultations, we have adopted an amendment to the timeline specified in the law to allow banks to realise the Sh10 billion core capital by December 31, 2032 without any annual milestones,’ Treasury Cabinet Secretary John Mbadi told the National Assembly on June 11.

When parents separate or divorce, decisions about their children can sometimes become another source of disagreement. One question that may arise is whether one parent can enrol a child in a more expensive school without consulting the other.

Family law advocate Cosmas Mureti says that while a parent can sue for custody and maintenance, challenging the other parent simply because they have taken the child to a more expensive school is different.

‘It’s an exercise in futility. A partner can argue that they will pay the fees equivalent to the previous school and the other partner to pay the extra amount. One parent cannot make such a decision without the input of the other.’

The reason is that parental responsibility is shared between both parents.

‘No parent is superior to the other. If co-parenting, a parent must consult the other parent and agree on the school,’ he says.

But what happens when one parent earns considerably more than the other and can comfortably afford the higher fees?

‘The best interest of the child is paramount on all issues affecting the child. If the school is beyond the parent’s means, the court should not force him or her to carry a load that she or he cannot carry,’ notes Mr Mureti.

Where the parents have a parental responsibility agreement, the parties are bound by what they agreed, although circumstances can change and the agreement can be amended.

Where circumstances have changed, the parents can change a child from one school to the other.

‘Where there was agreement on contribution by each parent, and one of the parties decides to transfer the child to a more expensive school, this party is liable to shoulder or pay the extra cost,’ he notes.

This means that a parent who unilaterally moves a child to a more expensive school cannot expect the other parent to take on the additional financial burden.

‘It is also possible for the court to order the parent who has transferred the child to a more expensive school to pay for the extra fees,’ he says, adding that the court will also consider the circumstances prevailing before the parties moved to court.

If you want to know how many hours are in a minute, look at what Jacqueline Waihenya does with it. To list all her attributes would be to undersell her, but let’s try. She is a chartered arbitrator, certified advanced construction adjudicator, governance expert, International Mediation Institute certified mediator…and so on. Let’s just call her multi-disciplinary or, as she prefers, multipotentialite.

‘In 2012,’ she says, ‘I made a commitment to myself to learn at least one new thing every year.’

However, to cut straight to her core, she will tell you that parenting is her lifelong lesson. How to let go of control. How to be a go-getter. How to be yourself. That’s the part-mum, part-expert advice she offers her daughters. And she hopes, when the world tells them to ‘play nice’, they will critically analyse the situation and not just kiss the ring or bend the knee. She knows this because she’s learned it, and she passes it on, because you only keep what you give away.

If someone were to observe one day in your job, what would surprise them the most? I do not have a set routine. I deal with whatever is on the table on any given day. Sometimes I serve as the Chairperson of the Institute of Certified Secretaries; other times I am the former chairperson at CHArb. Above all-and at all times-I am a mother to my two daughters, aged 22 and 19. I really love engaging with the younger generation because my daughters have very similar expectations and needs.

So I think the one thing that would surprise people the most is that I am a mum [chuckles]. I like to think that I am a present mother to my daughters. We spend a lot of time together, and sometimes they ask me whether I am a stay-at-home mum because I try to work from home a lot when they are around.

What do your daughters think you take too seriously? They think I am too serious about work, especially academia and scholarship. I really enjoy challenging myself academically. I am currently pursuing a PhD, so I have ample opportunity for intellectual rigour, and they get to see me doing that.

You are pursuing a PhD alongside all these other multi-potentialities that you have. How do you manage all of this? It is an integral part of who I am. Around 2012, I made a commitment to learn at least one new thing every year. Continuous growth is a deliberate process. There are days dedicated to academia, days focused on my legal practice, and other days spent engaging in service at the Institute of Certified Secretaries, supporting the community, and mentoring young professionals. I have also been in Rotary.

What is one key lesson from learning something new every year that has deeply impacted how you live your life? That small steps make a huge impact. When I first stumbled into arbitration, I took what we call the entry course and thought it would take forever to learn the nitty-gritty and become an expert. But by breaking complex subjects like arbitration and mediation down into bite-sized pieces, mastering them became manageable. It has been a privilege to start where no structure previously existed and build one day at a time.

I also learned that becoming an expert requires dedicating 10,000 hours to a subject. I resolved to invest those 10,000 hours, knowing that even if I shifted focus later, I would have acquired valuable expertise.

What achievement are you secretly proud of? I think I really like being a mum haha! I am proud of my professional work, but there is something I am doing that very few people know about. Every Wednesday, I attend a diploma class in Theological Education by Extension at PCEA St Andrews. It allows me to connect my faith with my intellectual pursuits, and earning that certificate is my goal for this year.

What part of being a mother has been the hardest to learn? Parenting is inherently challenging. My eldest daughter, who recently graduated as a lawyer, pointed out that I was projecting my own goals onto her. That was hard. I thought that I could guide her path, but she opted to pursue public policy rather than commercial law.

Was it easy to let go of control? No, it was very hard. When you experience an empty nest for the first time, you become deeply introspective and have to recalibrate your life almost from scratch. As children become adults and take charge of their own lives, letting go is far more challenging than managing earlier stages of parenting.

Having built your life through continuous learning, what do you hope your daughters build differently? It’s a deep question. My own mother encouraged me to be a go-getter, to be myself, and not to be afraid of reaching out. That is what I have taught my daughters. My life has been an incredibly rich experience, and I hope they derive similar fulfilment from their professional and personal journeys.

When was the last time you did something purely for Jacky? I cannot even remember haha! Serving others is what genuinely brings me joy. When my daughters were very young, before taking on professional institutional leadership, I was heavily involved in community service through Rotary.

I eventually rose to become the Rotary Kenya Country Chair during a season when we were restructuring the district from five countries-Uganda, Tanzania, Kenya, Ethiopia, and South Sudan (later Eritrea)-into separate districts. That service provided incredible leadership training through interacting with ordinary citizens across East Africa. Travelling across the region demonstrated that despite regional nuances, our fundamental aspirations, challenges, and ideals are remarkably similar. It also heightened my deep appreciation for Kenya.

What are your primary interests outside work? I am a workaholic. What truly drives me in work and leadership is engaging with, observing, and serving people.

No hobbies whatsoever? I have explored several over the years, though I do not maintain a strict routine. I sang with a choir in Mombasa for two years, and I tried playing golf, but it did not stick because I do not follow a fixed schedule. I think of myself as a non-conformist.

How do you ensure that work does not prevent you from being present in the moment-such as being buried in your phone? I maintain too many diverse interests to be consumed by a single distraction. My phone is a work tool that I keep accessible for urgent matters, but when I sit down with someone or engage with a group, I remain fully present.

What core rules do you live by? My primary rule is to learn something new every single day. My second is courage. Not arrogant bravado, but the quiet courage to speak out when silence would be easier.

Why is daily learning so vital to you? Learning drives personal growth. A mentor once told me, ‘Jacqueline, make sure that every day you can say that you are not only growing in age, but in wisdom.’ Time will always pass, but actively accumulate wisdom, knowledge, and understanding rather than merely ageing.

What habit has yielded the greatest benefit for you? Being a morning person. Starting my day early adds productive hours, enabling me to accomplish major tasks by 11 o’clock so I have the rest of the day for other pursuits. It got validation from Robin Sharma’s 5 am Club too.

Speaking of, is there a book you frequently recommend to people? Team of Rivals by Doris Kearns Goodwin. It is my all-time favourite recommendation. It is an essential read for disruptors and leaders navigating change. It illustrates how Abraham Lincoln assembled competing rivals into a unified, effective cabinet.

A favourite takeaway of mine is Lincoln’s principle of “government of the people, for the people, by the people,” which applies directly to organisational governance by involving people and ensuring decisions create meaningful public impact. Another profound concept from Lincoln’s story is sharpening the axe beforehand by investing 80 per cent of your effort in preparation so that execution takes only 20 per cent of the time.

What should be common knowledge but isn’t? That there are sufficient resources for everyone if equal opportunities are provided. Many people operate from a scarcity mindset and an excessive urge to accumulate, driven by historical fears of hardship and having to go back there. The remedy lies in leveraging our rich human capital and empowering citizens through visionary leadership.

What do people get wrong about you? People often assume I am soft because of my soft-spoken and calm demeanour. However, my calmness is actually my superpower.

What advice should women be cautious of accepting? To “be nice”. In many contexts, telling a woman to be nice is an indirect way of asking her to step down or yield her position or taking advantage of them. It is really context-specific, but women should critically analyse the situation before deciding whether being “nice” serves their interests.

What have you become worse at with age? Having filters. They tend to dry up as you grow older. Beyond age 50, you gain the clarity and freedom to authentically focus on your core priorities without worrying about pleasing everyone.

What has been the greatest blessing of reaching half a century? Experiencing positive societal transformation firsthand and actively contributing to emerging fields. For instance, my PhD research focuses on artificial intelligence and sustainable finance, where technology meets social consciousness in the financial space. It is a privilege to contribute governance experience to emerging technology while seeing the next generation thrive in a dynamic Kenya. This is my small thing.

What fundamental lesson has life taught you? Life changes, and those who adapt thrive.

What is the soundtrack of your life currently? Uplifting gospel music, particularly songs reflecting gratitude for God’s blessings like Baruch Hashem Adonai, sung by Maranatha! Music.

Who do you know that I should know? Dr Deche Mercy. She is a powerhouse in academia but has served in public spaces and professional spaces. The first time we met, we had been invited to a career fair in Mombasa, and she was married and raising her family there. She spoke immediately after me, which made a huge impression on me. She noted that law is a unique profession where earning capacity ranges from zero shillings to infinity based on individual dedication and effort. Her wisdom made a lasting impression and deeply inspired my approach to legal practice. Have I said she’s also in Mombasa and Nairobi and the whole country? [chuckles]

A social media influencer campaign can appear to be performing well: tens of posts praising a product, hashtags gaining traction, and an apparent steady stream of consumers talking about a brand.

Yet some of that ostensible enthusiasm may not be as organic as it looks.

The growing use of artificial intelligence (AI) to mass-produce social media content is creating a new problem for companies buying influencer marketing without knowing that they are paying for manufactured influence and not genuine engagement.

A new investigation by the US AI giant Anthropic has lifted the lid on how the same AI tools being used to create political propaganda are repurposed for commercial marketing.

Between December 2025 and August 2026, Anthropic identified and removed an account used by an actor to mass-produce Kenyan political content through its popular Claude chatbot.

The operation was designed to make coordinated messaging appear like spontaneous grassroots commentary by Kenyans on platforms like X and Facebook.

The actor would provide a topic, talking points, and hashtags and instruct Claude to generate batches of exactly 50 posts, formatted for publication across social media.

While a large portion of the campaign focused on Kenyan politics, the same model was used for Kenyan retail brands, which Anthropic did not disclose.

‘The actor ran the identical AI workflow for Kenyan retail brands under a marketing persona, ‘SHANKI’/’Elkins Marketer,’ the report said.

The AI-generated promotional broadcast was repackaged as organic-looking tweets, with links inserted into every fifth post.

‘This fits into a commonly observed pattern in Kenya where agencies pay local influencers to manipulate narratives,’ said Anthropic.

Anthropic said the activity appeared consistent with an entirely domestic Kenyan operation.

The trend creates a new risk in Kenya’s rapidly expanding influencer economy. Companies may struggle to tell the difference between genuine creator influence and content manufactured at scale.

Influencer marketing has become big business as companies shift some of their advertising budgets away from traditional media toward digital creators with specific audiences.

Creators produce sponsored photos and videos, embed product links in posts, and sell physical and digital products directly through their pages.

Nairobi-based research and data analytics firm OdipoDev recently reported that Kenyan influencers collectively earned about Sh1.07 billion from brand-sponsored posts last year.

This creates an incentive for creators and agencies to produce more content, reach more people, and demonstrate engagement to brands.

AI can also lower the cost an influencer incurs – instead of writing many variations of a promotional message, an AI system can produce hundreds of posts in seconds, tailored to different audiences and social media platforms.

But while the technology can help a creator brainstorm ideas, improve grammar, edit video, generate design concepts, or adapt a genuine campaign to different platforms, it becomes problematic when it starts manufacturing the appearance of independent consumer interest.

Brands pay influencers and agencies because they believe the creators have audiences that trust their product recommendations. If the campaign is built around AI-generated accounts, comments, or posts designed to look like independent opinions, the company risks paying for an audience and influence that do not really exist.

This is similar to the political tactic of astroturfing, where coordinated messaging is made to appear as if it is coming from ordinary members of the public.

Anthropic classified the Kenyan operation as Category One on its Breakout Scale because the activity remained isolated within a network of fake accounts and local influencers on a single platform and did not reach or influence real people.

‘While a social media site usually sees an operation once its content is already circulating, we may see it on Claude while the operation is still being built,’ Anthropic said.

‘Actors use AI to plan their campaign, choose their targets, and write the material. Those types of tasks produce signals that our systems are trained to detect, which often lets us disrupt an operation before it gets off the ground.’

British newspaper The Guardian has reported cases of content creators in Europe producing AI influencer material for corporate clients, who asked them to sign non-disclosure agreements preventing them from discussing their work.

In Kenya, new rules proposed under the Artificial Intelligence Bill, 2026, would require AI systems generating or manipulating images, voice or likeness to clearly label the output as AI-generated.

This would create increased scrutiny as companies seek to establish how their campaigns are produced, whether creators are using automated tools, whether images and testimonials depict real people, and whether engagement around a campaign comes from genuine users.

In Kenya, the energy transition arrives on a phone screen as a 20-digit number. That number is what a growing number of households see when they buy prepaid electricity. And as the country moves toward another election in August 2027, that number could become a more powerful measure of the government’s energy record than any statistic about renewable power.

Kenya gets more than 90 percent of its electricity from renewable sources, led by geothermal, hydro and wind. It is one of the world’s cleaner electricity systems. But clean does not necessarily mean cheap. For the consumer, the question is much simpler: How many units did their money buy, and how long did they last? That is where Kenya’s energy success story becomes more complicated.

The price of a prepaid token reflects far more than the cost of generating electricity. It also carries the costs of moving that electricity across the country, financing the system and absorbing economic shocks. Some of those charges can change even when electricity consumption does not.

Variable adjustments and fuel costs are one part of the equation. The Fuel Cost Charge (FCC) reflects the cost of thermal generation used to provide backup when renewable sources are insufficient. The Foreign Exchange Rate Fluctuation Adjustment (Forex) reflects movements in the shilling against foreign currencies. Inflation adjustments account for changes in the cost of operating parts of the power system.

Government levies and taxes also apply. A portion of what consumers pay goes toward statutory charges, including the Rural Electrification Programme levy and the Water Resource Management Authority levy, as well as VAT.

The Energy and Petroleum Regulatory Authority regulates these charges through the energy sector framework. So when a consumer buys tokens, they are not simply buying electricity; the money helps finance an entire system, from generation and power contracts to transmission, distribution, taxes, and economy-linked adjustments.

The cost of bad decisions in the power sector eventually reaches the household. Poorly negotiated independent power purchase agreements, investment decisions that fail to match supply with demand, high government taxes and levies, and global economic shocks may seem like distant policy or market issues. But they converge in one very immediate place: your household, through the phone screen, when you buy that token.

That distinction matters because Kenya’s problem is increasingly less about whether it can generate clean electricity and more about how efficiently it delivers and pays for it. System losses are a glaring example. More than 20 percent of electricity can be lost through technical failures, theft and other inefficiencies, compared with roughly up to 10 percent in better-performing systems. Consumers ultimately feel the cost.

Kenya also carries what might be called an African premium, where electricity projects are expensive to finance because investors demand higher returns to compensate for perceived risks. Those costs can eventually be passed on to electricity prices.

Long-term power purchase agreements through Independent Power Producers add another layer. They helped Kenya attract private generation when the country desperately needed more electricity, but contracts may require payment for power even if not all of it is ultimately consumed. That creates an uncomfortable contradiction. Kenya can have periods of excess generation while consumers continue paying relatively high prices.

Manufacturers are particularly exposed. Industry groups have described Kenya’s electricity as among the most expensive in the region, with industrial users paying substantially more per kilowatt-hour than competitors in countries such as Egypt, South Africa, Morocco and Ethiopia. That affects the price of everything from manufactured goods to food processing and can make Kenya less attractive to investors.

This is why Parliament’s recent push for a policy to guide renegotiating electricity agreements with major power producers matters. Lower wholesale prices could give Kenya Power more room to reduce consumer bills without undermining the utility’s finances. But renegotiating contracts alone will not solve the problem.

Kenya needs to attack the costs buried deeper in the system. It needs to modernise the grid, reduce losses, improve metering, expand storage, strengthen competition and make it easier for large consumers to buy electricity directly from generators through open-access and wheeling arrangements.

Most importantly, consumers deserve to understand what they are paying for. Imagine if every token came with a simple breakdown of how much went to generation, how much to Kenya Power’s distribution system, how much was lost, how much went to taxes and levies, and how much reflected fuel, foreign-exchange and inflation adjustments. That would turn an opaque electricity bill into a tool for public accountability.

Kenya’s energy transition should ultimately be judged not only by how green the grid becomes, but by whether ordinary Kenyans can afford to use it. As the election approaches, voters may not be thinking about geothermal capacity, renewable energy targets, or power purchase agreements.

They will be thinking about something much more immediate: how long their tokens last. That is the political currency of Kenya’s energy transition.

This is the thinking behind the Central Bank of Kenya’s (CBK) proposed Framework for Identification, Regulation and Supervision of Domestic Systemically Important Banks (D-SIBs), issued in August 2026 and subsequently released for public comment.

The framework targets banks whose distress or disorderly failure could cause significant disruption to Kenya’s financial system and wider economy. The important question, therefore, is not simply which Kenyan banks will qualify as D-SIBs, but what it takes to regulate an institution whose failure could become a national economic event.

The 200-8 collapse of the $639 billion in assets Lehman Brothers remains the clearest reminder of how the failure of a large and interconnected institution can transmit losses and uncertainty throughout financial markets. Several major institutions deemed systemically important also received substantial state support to prevent wider consequences.

The Basel Committee subsequently introduced the D-SIB framework in 2012, recognising that a bank does not have to be globally important to be systemically important. A bank can be relatively small by global standards but critically important to its domestic economy. Kenya is now adapting this logic to its own financial system, which is a very progressive step toward ensuring bank stability in the economy.

Kenya enters this new regulatory phase from a position of relative strength. The latest CBK data show total capital adequacy at 20 percent in June 2026, comfortably above the statutory minimum of 14.5 percent. The average liquidity ratio stood at 61.2 percent against a 20 percent minimum, while the gross non-performing loans-to-gross loans ratio declined to 14.6 percent in July 2026 from 17.6 percent a year earlier.

It is also impressive to note that four Kenyan banks: KCB Bank Group, Equity Bank, Co-operative Bank of Kenya and Stanbic Bank Kenya, made Forbes’ first-ever list of the World’s Top Performing Banks, ranking 500 institutions across 89 countries.

These are encouraging indicators, but financial strength should never become complacency. Banking history teaches us that apparently healthy institutions can deteriorate rapidly when weaknesses in governance, liquidity, credit management or internal controls collide with a loss of confidence and trust from the public: bank runs can happen in seconds.

Kenya has seen the consequences. Between 1984 and 2016, Kenya experienced 27 banking failures with the more recent (as of 2016) cases being the collapse or resolution of banking institutions including Dubai Bank, Imperial Bank, Chase Bank and Charterhouse Bank.

Dubai Bank was placed under receivership in 2015, followed by Imperial Bank later that year amid revelations concerning suspected fraudulent activities.

Chase Bank was placed under receivership in 2016 after a severe liquidity and confidence crisis, while Charterhouse Bank was eventually placed into liquidation.

The consequences were felt beyond the failed institutions themselves. Such failures affect depositor confidence, interbank liquidity, credit availability, investors and other financial institutions. In the case of Chase Bank and Imperial Bank, for example, they had substantial outstanding bonds, illustrating that bank failures can also transmit losses into capital markets beyond their depositors and clients.

Kenya’s historical experience points to three recurring vulnerabilities: poor corporate governance and management; insider lending and weak credit management; and fraud and weak internal controls.

Weak boards, poor decision-making, conflicts of interest and inadequate accountability can allow problems to grow unnoticed. Excessive lending to directors, shareholders and related parties, coupled with weak loan appraisal and monitoring, can produce large non-performing loans. Fraudulent transactions, misappropriation of funds, financial manipulation and ineffective controls can then transform institutional weaknesses into crises. These lessons should sit at the centre of D-SIB supervision.

Who might be systemically important?

It would be premature to name the eventual D-SIBs before CBK completes its assessment. However, given their scale, interconnectedness and economic reach, banks such as KCB Bank Kenya, Equity Bank Kenya, Co-operative Bank of Kenya and NCBA Bank would naturally attract attention. There could be others once the methodology is applied to actual supervisory data.

More importantly is that the D-SIB designation does not mean a bank is weak. It means that the consequences of its failure would be sufficiently serious to warrant greater resilience and supervisory attention.

CBK proposes to assess systemic importance using five indicators: size, interconnectedness, substitutability, complexity and importance to the domestic economy. Size carries 40 percent, interconnectedness 30 per cent, substitutability 15 percent, domestic economic importance 10 percent and complexity 5 percent.

The proposed Kenyan framework adapts the Basel methodology by replacing cross-jurisdictional activity with importance to the domestic economy. This is appropriate: a bank may be globally insignificant but economically indispensable to Kenya.

Size considers the bank’s exposure measure; interconnectedness examines transactions with other local banks; substitutability considers lending to households and the trade sector, including SMEs, as well as RTGS payments; complexity considers securities and derivatives; and domestic economic importance incorporates deposits and bank size relative to GDP. The underlying question is therefore not simply, ‘How big is the bank?’ but ‘What would Kenya lose if this bank suddenly disappeared?’

Capital is necessary, but not sufficient

Under the proposed framework, a systemic-importance score above 0.25 and/or a category score above 0.05 would indicate systemic importance. Designated banks would then be placed into three buckets, with additional Common Equity Tier 1 requirements ranging from 0.5 percent to 2.5 percent of risk-weighted assets.

Additional capital is important because it reduces the probability of failure and provides greater loss-absorption capacity. But capital is only one line of defence. A bank can meet capital requirements and still fail because of poor governance, excessive risk-taking, fraud, weak internal controls, poor liquidity management or ineffective leadership. The regulator must therefore identify weaknesses before they become capital problems.

Governance and succession are systemic-risk issues

This is particularly important for Kenya’s D-SIBs. A systemically important bank requires a board capable of challenging management, understanding its risk profile and ensuring that growth does not outpace risk-management capacity. It also needs credible succession plans for the chief executive and other critical executives.

Recent CEO movements within Kenya’s banking industry demonstrate why this matters. Executive mobility is not itself a problem; indeed, it can strengthen the industry by spreading leadership experience. The regulatory question is whether a bank can manage leadership transitions without uncertainty or disruption and whether incoming executives satisfy CBK’s fit-and-proper requirements.

For D-SIBs, succession planning should therefore extend beyond naming a replacement. Boards should have tested plans covering CEO succession, emergency leadership, key risk-management positions and business continuity.

The critical question is simple: If the CEO left tomorrow Friday evening, would the institution remain stable on Monday morning? If the answer is uncertain, succession is no longer merely a human-resources issue. It is a financial-stability issue.

Regulation must look beyond today’s ratios

The proposed framework goes beyond higher capital requirements. D-SIBs will face more intensive supervision, including closer examination of governance, risk management and internal controls. They will undertake quarterly stress testing and conduct Internal Capital Adequacy Assessment Process (ICAAP) and Internal Liquidity Adequacy Assessment Process (ILAAP) exercises at least annually.

They will also be required to maintain recovery and resolution plans, updated annually and submitted to CBK by April 30. CBK may impose higher liquidity requirements, enhanced disclosure obligations and restrictions on activities that increase systemic risk. This represents an important shift from backward-looking compliance towards forward-looking supervision.

CBK must ask not only whether a bank complies today, but whether its business model, governance, capital, liquidity, technology, cyber resilience and leadership would withstand tomorrow’s shock.

The US lesson: stability does not mean absence of risk

A preview of US banking failures of 2023, particularly the Silicon Valley Bank, Signature Bank and First Republic, showed that even sophisticated financial systems remain vulnerable to interest-rate risk, liquidity pressures, concentrated funding and rapid loss of confidence.

Yet the lesson is not that the US financial system is inherently unstable. Despite reporting about 2,439 FDIC institutions shut down and put under receivership between 1984 and 2026, the US financial services sector remains stable, albeit with elevated pockets of vulnerability rather than systemic distress. The lesson for Kenya is more nuanced: regulation cannot eliminate banking failures. Its purpose is to ensure that the failure of one institution does not become the failure of the system.

What does this mean for Kenya?

The D-SIB framework should strengthen Kenya’s already resilient banking sector. Large banks will face greater capital requirements and supervisory scrutiny, but they will also be expected to demonstrate stronger governance, risk management, succession planning and recovery capabilities.

Smaller banks should not assume that systemic risk is exclusively a large-bank problem. A smaller institution can still undermine confidence, particularly where its failure exposes weaknesses elsewhere in the financial system. The framework could also accelerate differentiation and consolidation as banks with stronger capital, governance, technology and risk-management capabilities gain an advantage.

But Kenya must guard against one unintended consequence: the creation of a ‘too-big-to-fail’ phenomenon. D-SIB designation must never be interpreted as a government guarantee. Otherwise, the framework could create moral hazard by encouraging depositors and investors to assume that the State will ultimately rescue designated banks. Systemic importance should mean greater responsibility, greater scrutiny and greater loss-absorption capacity, not guaranteed protection.

Kenya’s banking sector, with an asset base of Sh8.413 trillion (approximately US$65 billion), is currently well capitalised, highly liquid and profitable, with total assets equivalent to about 52 per cent of the country’s GDP. But financial stability is not secured by today’s ratios alone. It depends on governance, risk management, internal controls, technology, cyber resilience, board independence, succession planning and the regulator’s ability to identify problems before they become crises.

The ultimate test of Kenya’s D-SIB framework will therefore not be how well CBK manages the collapse of a systemically important bank. It will be whether the framework makes such a collapse less likely, less contagious and less consequential for the Kenyan economy.

But it was those pitches of Umoja that offered Omari his first lessons in competition, humility, friendship and persistence. Years later, those lessons would follow him into a very different arena -the boardroom of one of Kenya’s largest banks.

Last week, Omari became the CEO of Absa Bank Kenya after more than two decades at the lender, capping a career that has taken him from internal audit to finance and, for 17 years, the chief financial officer.

‘My advice to ambitious professionals is to focus on making the most of the opportunities in front of you rather than concentrating on the next title,’ says Omari.

He twice served as acting CEO, gaining a taste of the top job without being handed the keys permanently. He says it was about gaining experiences that challenged his thinking and exposed him to different parts of the business.

‘Serving as acting CEO on two separate occasions gave me the opportunity to lead the organisation through different periods while continuing to grow in my role as CFO. It also broadened my leadership beyond finance into strategy, treasury, sustainability, and the community impact agenda,’ says Omari.

He now dreams of amplifying the bank’s mantra of ‘Empowering Africa’s tomorrow, together… one story at a time.’ And he has a story of his own. A story that stretches beyond the tarmac pitches of Umoja.

Omari had initially considered studying engineering. But while processing his university admission, a conversation with someone who encouraged him to see university as a foundation for learning and adapting to opportunities changed his thinking.

He eventually studied Economics at the University of Nairobi, alongside professional accounting qualifications. This set him on a path that would take him from audit to banking, compliance, finance and, ultimately, the top job at Absa.

‘When I reflect on that young man from Umoja, whose afternoons were often spent playing football on the neighbourhood tarmac courts, I am reminded that few careers follow a predetermined path,’ he says.

When he first walked into what was then Barclays Bank of Kenya on February 2, 2004, he was interviewing for an internal audit manager position at Market Branch. He remembers climbing three flights of stairs to the office, slightly breathless.

‘At that moment, the idea that I would one day become CEO was far from my mind. Looking back, I feel a deep sense of gratitude,’ he says.

The appointment as the CEO marks the latest stage of a career built largely within one institution. His career has moved through external audit at KPMG, internal audit, compliance, finance and leadership.

He says an early assignment to help establish KPMG’s office in Rwanda exposed him to building teams, growing a business and solving problems in an unfamiliar market.

‘That experience shaped my approach to opportunities throughout my career. Whenever an opportunity arose to take on additional responsibility, lead a new initiative or step into an unfamiliar environment, I tried to view it as a chance to contribute,’ he says.

From the bank’s head office in Westlands, Omari says his leadership philosophy cannot be separated from Eastlands, where he learned the importance of hard work and creating his own luck.

‘I would describe myself as a grounded and curious person who believes that growth comes from continuously learning, embracing change, and investing in people. Growing up in Nairobi’s Eastlands taught me the value of hard work, resilience, and making the most of every opportunity,’ he says.

He adds that his greatest satisfaction comes from seeing people develop and achieve more than they thought possible. His view about leadership is that it is an opportunity to serve and create memories.

‘If there is one thing I would hope people say about me, it is that I remained authentic, treated people with respect, and used every opportunity to make a positive difference,’ says Omari.

Football was once a big part of his life, but ‘age and injuries,’ he says, have taught him how to graciously surrender the passions of youth. His football boots have given way to golf clubs.

Most of his Saturdays now involve a golf course and his close group of friends, called the ‘Eight Ball.’ The group has evolved into a community bound by friendship, competition and support. But Sundays belong to the family.

‘No matter how demanding the week has been, spending time with my family is what helps me stay grounded and keep perspective,’ he says.

He explains that parenthood has changed the way he thinks about leadership. As his children have grown older and more independent, his role has shifted from having all the answers to becoming a guide and sounding board.

He sees a successful leader as one who listens, supports, and creates an environment where people can grow and make confident decisions for themselves. That may prove useful as he takes charge of a bank navigating a changing industry.

Absa wants to deepen its presence across personal and private banking, corporate and investment banking and business banking, while pursuing opportunities in housing, SMEs, trade, manufacturing, infrastructure and agriculture. For Omari, however, the strategy ultimately comes back to people.

‘I think about the people, businesses, and stories behind every customer relationship, and how we can help them realise their potential. When we do that consistently and well, stronger performance will naturally follow,’ he says.

Across Africa, the most consequential uses of AI do not look like a chatbot. They look like a forecast that warns a nutrition team months before a crisis, a satellite map that shows a planner how land use is changing, a drought assessment that reaches a ministry in time to act. Most of this work runs on data that has nothing to do with language: imagery, health records, weather.

Yet whether any of it changes a person’s decision often comes down to language. One in six people worldwide has now used a generative AI product, according to Microsoft’s 2025 AI Diffusion Report, and Africa has about 1.5 billion people and more than 1,500 languages, yet most AI models were trained mainly on English and a handful of other global tongues.

A farmer looking for planting advice in Dholuo, or a mother seeking health guidance in Amharic, may find that today’s systems cannot speak to them. Language is not everything in Africa’s AI story, but without it, everything else struggles to arrive.

Encouraging progress is being made, and much is led from within the continent. For example, LINGUA Africa, an initiative of the Masakhane African Languages Hub with the Gates Foundation, the Microsoft AI for Good Lab and Google.org, funds open datasets, speech resources and practical language tools. Its recent call, designed to strengthen the language foundations needed for inclusive AI in Africa, drew more than 800 applications from 64 countries, 85 percent of them African.

Yet fluency is not the same as usefulness. A system can answer a farmer in fluent Kikuyu and still provide a recommendation that makes no sense for the soil, the season or the family budget. Language opens the door, but trust depends on whether the advice reflects agriculture’s complex, local realities.

Data scarcity in Africa is not only a shortage of examples. It also means missing communities, outdated maps, and records that capture only the people who managed to reach a clinic. Train a model on data like that and it quietly inherits the same blind spots.

Locally led data collection, documentation and long-term stewardship deserve as much investment as the models themselves. At the same time, scarcity is no reason to stand still: African innovation should be designed to work in today’s conditions, rather than waiting for perfect datasets (and compute capabilities) that may never arrive.

For AI solutions to deliver lasting impact, local institutions must own their development, deployment and long-term stewardship.

As I argued recently in Nature Africa, the hardest part of AI is not the algorithm. Around 600 million people in sub-Saharan Africa still lack electricity, and connectivity, devices, skills and maintenance decide whether an impressive demonstration becomes a service people rely on every day. For Africa, these are not a distraction from the AI agenda; they are a large part of it.

We should aim for more than AI that speaks Africa’s languages. We need AI that reflects its realities, strengthens its institutions and helps people make better decisions. Language belongs at the centre of that ambition, alongside good data, earned trust and the capacity to act.

The writer leads the Africa team of the Microsoft AI for Good Lab in Nairobi and is a member of the UN Secretary-General’s Independent International Scientific Panel on AI.

When Mercy Akoth moved to Canada nearly three years ago, she quickly discovered that setting up a home away from Kenya came with unexpected costs, particularly when it came to decorating her living space.

Mercy, who works as a caregiver while pursuing a master’s degree in nursing at McGill University, has had to move house several times to accommodate her work and studies. Although her residences have not been far from the university, each move has meant finding ways to make her space comfortable and homely.

One of the first things she noticed was the difference in curtain options between Kenya and Canada. In Nairobi, curtains were readily available in countless designs, colours and fabrics. In Canada, however, she found the variety limited and the prices steep.

Outfitting a one-bedroom apartment could cost about $37 (Sh4,800) per metre, prompting her to look back home for solutions.

“I realised Kenya has a wider variety of curtains in different designs than what I was finding here. When I came back for the holidays last December, I decided to buy them from Kenya instead,” she says. “I travelled with them in my suitcase, but the airline charges were high.”

She paid about Sh9,800 in airline baggage fees to transport the 7-kilogram package of curtains.

Her experience reflects a growing trend among Kenyans in the diaspora who are turning to local retailers for home décor products.

Curtain sellers in Nairobi say overseas clients from Canada, the United States, Australia and the United Kingdom are becoming a steady part of their business.

Retailers attribute the appeal to variety, affordability and the ability for customers to choose fabrics and designs before the curtains are stitched and shipped. Kenya has also become a destination for buyers from other African countries, including Ghana and South Africa.

Most curtain fabrics are imported, primarily from China, and then customised locally to suit customers’ preferences.

At Dream Curtains on Tom Mboya Street, Head of Sales Dan Khaemba says diaspora clients have been a key market since he joined the business in 2023.

‘The clients we serve come from different countries. We recently delivered curtains to a Kenyan living in Australia, but we also have many clients in the United States,’ he says. The shop serves between three and five diaspora clients each month.

Social media has been central to this growth. Online platforms allow customers to browse designs, select materials and communicate directly with sellers before making payments. Still, building trust takes time.

‘Not everyone believes in online business. Some people send someone to confirm that we are genuine. Once they do, they become serious buyers,’ Khaemba explains.

Curtain demand also follows seasonal trends, with sales peaking between October and January. For diaspora clients, purchases often rise during winter, when people focus on making their homes warmer and more inviting.

Unlike local buyers, who often bargain, diaspora clients tend to prioritise quality and transparency. Payments are made through bank transfers or mobile money, with prices ranging from Sh350 to Sh1,800 per metre, depending on the material. Blackout curtains are particularly popular.

At Najibu Curtains, sales representative Mugoya Shakur says most of their overseas customers come from the United States and Canada.

‘The prices here are far more affordable than in those countries,’ he says. Curtains range from Sh350 to Sh2,000 per metre, serving both homes and businesses. Yet shipping can nearly double the overall cost. A client may buy curtains worth Sh300,000, but transport costs can add another Sh200,000.

Despite this, referrals continue to drive growth.

‘Most of the clients who purchase from us are referred by other Kenyans in the diaspora. If you do a good job, people will trust you,’ Shakur says.

Some clients combine curtain purchases with other Kenyan products, such as home décor items and African clothing, including vitenge, to maximise shipping.

At Suli Home Curtains, manager Lugendo Swaib says orders come from the UK, the US, Canada and African countries such as South Africa, Nigeria and Ghana.

‘They prefer curtains from Kenya because we offer a wide variety of colours and designs, as well as high-quality products,’ he says.

Unlike local buyers, who often shop seasonally, diaspora clients purchase throughout the year, often driven by new homes, construction projects or business ventures. Swaib says the shop receives at least 10 diaspora clients every month.

‘As long as you advertise well, you will always find clients purchasing curtains,’ he adds.

Some buyers even purchase in bulk to resell abroad, with prices typically ranging from Sh700 to Sh900 per metre.

Kenyan retailers say their competitive edge lies in customisation. Customers choose the material, which is then stitched, packaged and shipped. Depending on whether the order is sent by air or sea, delivery takes between seven and 21 days.

For many in the diaspora, curtains are more than functional household items. They are cultural touchstones, reminders of home and symbols of identity. The colours, textures and designs often evoke memories of Kenyan households, where curtains play a central role in interior décor.

Mercy recalls how the curtains in her childhood home were carefully chosen to match the furniture and wall colours.

‘In Kenya, curtains are part of the personality of a house. They make a home feel complete,’ she says.

Abroad, she found that curtains were often plain, functional and expensive, lacking the vibrancy she associated with home.

Retailers are keenly aware of this emotional connection. By giving diaspora clients the opportunity to select fabrics that resonate with their tastes, they are not just selling curtains but exporting pieces of Kenyan culture.

The business opportunity is significant. With more Kenyans moving abroad for work and study, demand for affordable, customised home décor is expected to grow. Retailers are already exploring partnerships with shipping companies to reduce costs and streamline delivery.

For now, the challenge remains balancing affordability with logistics. Shipping costs can sometimes outweigh the savings of buying curtains in Kenya. Yet many diaspora clients are willing to pay the extra cost for quality and familiarity.

As Mercy puts it, ‘It is not just about the curtains. It is about feeling at home, even when you are far away.’

‘I would stay awake most of the night, and even when she slept during the day, I could not sleep. In my mind, daytime was for being awake and night was for sleeping,’ she says.

‘I thought I was losing my mind.’

The exhaustion soon began to affect more than her energy. Selina developed brain fog, struggled with household chores and became increasingly irritable and emotionally drained. At her lowest point, she says, she even feared she might harm her child.

‘I completely lost sleep, and for a moment, I thought I was losing my mind.’

What confused her was that she was constantly tired. ‘I did not understand what was happening,’ she says.

It was only after she mentioned the problem during a routine clinic visit that a physician told her she was experiencing insomnia and advised her on ways to improve her sleep.

‘I was told to avoid coffee and other caffeinated drinks in the evening, to eat a lighter dinner, and of course, to keep to a regular sleeping routine,’ she says.

‘I even spent almost Sh20,000 on supplements, hoping they would help me sleep, but they didn’t work,’ she says.

Her sister then stepped in to help, recommending that she seek counselling in the hope that she would find a way to cope with the emotional exhaustion and demands of caring for the child.

‘It wasn’t something that changed immediately. I tried counselling because my sister was concerned and worried,’ she says.

She attended counselling for two months. This helped her to come to terms with her situation and reminded her to be gentler with herself, but her sleep problems persisted.

She spent about another three months searching for something that could help. Then her sister told her about a sleep therapist she had come across on TikTok.

After an intensive search, the therapist she chose recommended changes to her routine and sleeping environment. One of these was a blackout curtain.

‘Honestly, I had never heard of blackout curtains before. I went to Google and other social media platforms just to confirm this so that I wouldn’t waste my time on something that wouldn’t help me like the previous interventions,’ she says.

Another challenge was the environment in which they lived. She lives in a gated community where outdoor security lights remain on throughout the night, making it difficult to distinguish between day and night.

‘At night, there are always lights outside, so the bedroom is never completely dark,’ she says.

She remembers buying two metres for Sh7,000, but this did not solve the problem. Unfortunately, she had bought a partial blackout curtain that let in some light, and she had been overcharged.

Selina continued to wake up frequently, sometimes after an hour and a half. She bought another pair for Sh6,000, followed a sleep programme, and made other changes, and this time her sleep duration increased.

‘I also had to learn that if I had the opportunity to sleep during the day, I should take it. I couldn’t keep waiting for night,’ she says.

Three years later, the 38-year-old says her sleep has improved considerably. She can now sometimes sleep for five to seven hours without interruption, and her daughter also sleeps better, although with the help of stimulants.

‘It’s very different from how things were before. I am hoping to get eight to 10 hours of sleep at night and, of course, a good nap during the day,’ she says.

The circadian rhythm

Selina is one of many people who struggle to sleep due to various sleep disorders.

Sleep consultant Anisa Samnani says that darkness is one of the signals the body uses to prepare for sleep.

‘Darkness is an important cue for our body that it is time to sleep,’ she says.

The body has an internal clock known as the circadian rhythm, which responds to light and darkness. As darkness falls, the body increases its production of melatonin, the hormone that prepares the body for sleep.

‘Light sends a different message to the brain,’ says Anisa. ‘Bright light tells the brain that it is daytime,that we should be alert, while darkness signals that it is time to wind down and sleep.’

For someone sleeping during the day, sunlight can therefore interfere with sleep. Blackout curtains can help by reducing the amount of light entering the room.

‘Blackout curtains can make a meaningful difference, particularly because daytime sleepers are trying to sleep at a time when their environment is naturally bright and active,’ she says.

However, Anisa says that curtains are not a treatment for insomnia.

If someone is waking up due to sunlight coming through the window, streetlights, or household lighting, blocking that light could solve the problem. However, someone with ongoing insomnia may have other factors affecting their sleep that need to be addressed.

When buying blackout curtains, she advises people to check how much light gets through around the edges of the window. A curtain may be labelled as ‘blackout’ but still allow light in through gaps at the sides, top or bottom. An eye mask can also help if curtains alone are not enough.

‘I had expected the usual demands of caring for a newborn, but I was not prepared for caring for a child with special needs,’ she says.

Selina had endured 32 hours of labour, and her daughter appeared healthy at birth, crying immediately like most newborns. But eight months later, she was diagnosed with cerebral palsy, and their routine changed dramatically.