Category: Business Daily

The developers of Kenya’s first public-private partnership (PPP)-funded power lines have approached three banks, including the African Development Bank (AfDB), for loans of up to Sh34 billion to finance the project.

Disclosures by the Kenya Electricity Transmission Company Limited (Ketraco) and the PPP Directorate show that the other two lenders approached to provide the loans are the Trade Development Bank (TDB) and the Dutch Entrepreneurial Bank (FMO).

The total project cost for the two power lines and substations is $341 million (Sh44.05 billion), with the developers covering the remaining costs.

Africa50, the AfDB’s pan-African infrastructure financing arm, and PowerGrid Corporation of India will construct the 400 kilovolts (kV) Lessos-Loosuk line and the 220kV Kisumu -Kibos-Kakamega-Musaga line.

The project will be funded via a mix of debt and equity in a 77:23 ratio. Africa50 will provide 60 percent of the equity or Sh6.08 billion ($47.06 million) with the PowerGrid Corporation of India providing the remaining 40 percent.

The loans will provide slightly more than three-quarters of the funds needed to finance the construction of the two lines and related substations.

‘Indicative term sheets for the project were also provided. The term sheets indicate negotiated positions with following senior lenders, African Development Bank, FMO Entrepreneurial Bank and Trade and Development Bank,’ the due diligence report on Africa50 and PowerGrid Corporation of India reads.

‘This demonstrates confidence by the senior lenders on the proponents and indicates intent to provide the debt component thus achieving financial close.’

Consumers will pay a special tariff on their monthly power bills, allowing the banks and developers to recoup their investment over a period of 30 years, after which the project will be handed over to Kenya.

The two lines and substations are crucial for improving power supply in western Kenya and providing alternative routes for evacuating wind and solar power from northern Kenya.

Earlier this month, the Energy and Petroleum Regulatory (Epra) undertook public participation on the project, with the proposed tariff one of the key issues that were discussed.

This will be the first energy project in Kenya to be funded via the PPP, given that an earlier deal awarded to the Adani Group of India was verbally cancelled in November last year.

Adani Energy Solutions, a subsidiary of Adani Group, had been awarded the deal to build 400 kV Gilgil-Thika-Malaa-Konza, 220kV Rongai-Keringet-Chemosit and the 132kV Menengai-Olkalou-Rumuruti lines.

The Indian firm was also set to build a 400/220 kV substation at Lessos and Rongai 132/33kV Thurdibuoro substations in Kisumu.

But President William Ruto was forced to cancel the deal after Gautam Adani, the founder of the Indian conglomerate was indicted in the US for allegedly orchestrating a $250 million bribery scheme.

Ketraco is betting on PPP deals to bridge a financing gap of more than $4 billion (Sh516.8 billion) to upgrade the power transmission network over the next 20 years.

The company has recently invited consultants to undertake feasibility studies for a $245.93 million (Sh31.8 billion) project to build four power transmission lines via the PPP model.

These are the 132 kV Kipevu-Mbaraki, the 220 kV Kiambere-Maua-Isiolo, 220kV Kwale – Shimoni (Kibuyuni) and the 132kV Meru-Maua.

The Environment and Land Court has allowed the construction of a 115-unit residential estate in Kibos, Kisumu, dismissing claims by Kibos Distillers Limited that the area was a designated industrial zone.

The judgment is expected to have a significant impact on urban planning and environmental governance in the region, which has long been touted as an industrial zone.

Kibos Distillers laid claim to ownership of the land. They sued, contending that the development and construction of residential units in an industrial zone was contrary to building rules, laws, and regulations because a housing estate could not exist in the middle of an industrial zone.

However, the court ruled the company did not prove that the suit properties are in an industrial zone. The court found there was no illegality or irregularity in the process through which the Kisumu County government issued planning approval in respect of the developments.

‘A declaration sought to that effect by the plaintiff (Kibos Distillers), and an order that no residential settlement shall be developed on the suit properties cannot therefore be granted,’ said the court.

The dispute centred on a 56-acre parcel in Muhoroni adjacent to Kibos Distillers’ factory.

The company, which was established in 2014 and produces industrial alcohol, argued that the area was an industrial zone and that housing would expose future homeowners to noise, foul smells, and environmental hazards from its operations, including the alcohol production plant.

It argued that the county and the national government have proposed to set up a Special Economic Zone in Kibos, and should that project take off, the entire area would be an industrial zone, not ideal for residential purposes. The area has 11 other factories.

The company also claimed the Wanahewa Housing Cooperative Society fraudulently obtained approvals without environmental impact assessments (EIAs) or proper public participation.

Wanahewa, however, maintained it lawfully purchased a 14-acre portion of the land from the legitimate owner in 2017, subdivided it into 115 eighth-acre plots, and sold them to its members.

It subsequently secured approvals in 2018 from the Kisumu County government and other relevant authorities, like the Ministry of Lands and Physical Planning, for the change of use of the properties.

The cooperative accused Kibos Distillers of lacking legal standing to challenge the project, noting that the distillery itself operated on land zoned for agricultural and residential use, not industrial.

The court ruled that Kibos Distillers failed to prove the area was legally designated as an industrial zone, noting there was no evidence of gazettement.

The distillery relied on a 2016 letter from a Kisumu County official declaring the area an industrial zone. However, no formal gazettement or urban development plan was presented.

Another evidence relied on by Kibos Distillers was a July 2019 report by the County Assembly of Kisumu on the pollution of rivers by Kibos Sugar and Allied Industries Limited.

In the report, the county Committee on Water, Environment and Natural Resources said: The area around the factory at Kibos is beginning to draw many investors, and the county government should submit proposals to the county assembly to gazette it as an industrial zone with speed to encourage more investment away from the central business district and into the area, exclusive of residential settlements.

However, the court asked why the county assembly would still call for the gazettment of Kibos as an industrial zone in 2019 if it had been designated as such in 2016, when the company was setting up its distillery.

‘In the absence of evidence that the suit properties are situated in an industrial zone, the Plaintiff’s objection to the planning/development approval on that ground has no basis,’ ruled the court.

Another finding was that Kibos Distillers’ own land title restricted use to agricultural and residential purposes, undermining its claim of operating in an industrial zone.

The court further rejected allegations that Wanahewa fraudulently acquired the land, noting the cooperative purchased the 14-acre portion legitimately.

It also noted Kibos Distillers did not sue the other three co-owners of the original 56-acre parcel, weakening its case, and there was no evidence showing Wanahewa misrepresented ownership when applying for approvals.

Additionally, the court ruled that an Environmental Impact Assessment (EIA) was unnecessary since the project involved subdivision and change of use and not large-scale construction.

‘Such a license was not required. The Plaintiff has not persuaded this court that the application for amalgamation, subdivision, and change of user of the suit properties required an EIA license,’ the court held.

The court also noted that Kibos Distillers did not prove its operations would harm future residents, despite its own reports on noise and emissions.

According to Kibos Distillers, the Kenya Railways Corporation was also upgrading the railway line to Kisumu through Kibos. The Kenya Ports Authority ICT station was also situated within the industrial zone in Kibos.

The Kenya National Highway Authority was working on the Mamboleo-Muhoroni By-pass Road, which would open up the Kibos area for further industrial development and the establishment of manufacturing plants within the industrial area.

One of its rejected arguments was that the development of a residential estate within the area would result in unending litigation between the residents and the factory.

The ruling paves the way for residential growth in Kibos, aligning with Kisumu’s housing demand.

The court’s emphasis on procedural compliance reassures developers, but highlights risks for industries operating without proper zoning clearances.

The cost of construction input rose at the fastest pace in nearly two years during the third quarter of 2025, lifted by higher prices of steel, electrical fittings, sand and bitumen, signaling budget pressure on construction projects.

The Construction Input Price Index (Cipi) increased by 1.27 percent between July and September this year, according to Kenya National Bureau of Statistics (KNBS) data, marking the quickest quarterly rise since December 2023. The index stood at 121.27 points, up from 119.75 in the previous quarter and 120.38 in the same period last year.

The Cipi measures the price changes in the inputs used in construction, such as materials, labour, and equipment. The index helps to track overall construction costs.

The increase in Cipi between July and September was driven mainly by steel and reinforced bars, whose prices rose by 5.2 percent, while electrical fittings increased by 5.1 percent.

Prices of bitumen macadam and sand rose by 4.7 percent and 3.6 percent, respectively. The cost of cement and timber, however, eased by 1.39 percent and 2.71 percent, respectively, helping to marginally moderate the overall rise in input costs.

The Building Cost Index, which measures changes in material prices for structural works, rose by 1.48 percent to 121.29 points, while the Civil Engineering Cost Index climbed to 121.79, reflecting higher prices of bitumen and petroleum products.

This marks the sharpest quarterly movement in 21 months, reversing a period of relative price stability that had held since early 2024. The last comparable increase was in December 2023, when construction input prices rose by 1.66 percent.

The cost pressures come at a time when the sector is showing signs of renewed activity.

For instance, cement consumption and production – key indicators of construction demand – hit a record in August 2025, signaling a rebound following last year’s slowdown caused by expensive credit and pending bills that stalled public projects.

Kenya imports a large portion of its construction materials, including steel and clinker, leaving the sector exposed to exchange rate fluctuations and shifts in global commodity prices.

Rising input prices risk squeezing margins for contractors and developers, especially those executing fixed-price contracts under projects such as the government’s Affordable Housing Programme and other public infrastructure projects.

The construction sector suffered first contraction in nearly 11 years during the quarter ended June 2024, shrinking 2.9 percent following budget cuts on major projects and high costs of materials.

The KNBS noted that labour and equipment indices also edged up 0.5 percent during the period under review, reflecting steady wage adjustments and higher machinery operating costs.

Equity Group Holdings has reported a 32.6 percent growth in net profit for the first nine months ended September 2025, riding on cheaper cost of deposits while holding other operating expenses flat.

The regional lender, with operations in six countries, Kenya, Rwanda, Uganda, Tanzania, South Sudan, and the Democratic Republic of Congo, reported a net profit of Sh52.1 billion for the period ended September, up from Sh39.2 billion in a similar period the previous year.

The growth followed a 20.6 percent drop or Sh9.3 billion in the bank’s cost of funds to Sh35.9 billion from Sh45.3 billion. The drop was despite a 2.2 percent growth in customer deposits, signalling the decline was due to a drop in interest rates.

‘As interest rates came down late, we passed that to the customers and reduced lending rates by 300 basis points. Interest income has grown by three percent. But interest expense has gone down by 20.6 percent, giving us a 16 percent growth in net interest margin from Sh80 billion to Sh93 billion,’ said Equity Group Chief Executive James Mwangi.

Banks traditionally make money by accepting cash deposits from their customers in return for interest payments and then investing that money elsewhere. The profit made by a bank is the difference between the interest it pays its depositors and the yield it makes through investing.

Equity held its operating expenses flat at Sh90.7 billion, which the management attributed to efficiency arising from digital banking.

‘It is the efficiency of automation – we have digitised the bank significantly. The second one is the use of artificial intelligence (AI). For the last four years, the bank had been messed up by fraud. Financial losses from fraud have been eliminated by using AI,’ said Mr Mwangi.

Kenya was the largest contributor to the group’s performance, having posted a 51.2 percent growth in after-tax profit despite a shrinking of its balance sheet.

The Kenyan subsidiary recorded a net profit of Sh31 billion, up from Sh20.5 billion. Its balance sheet shrank by Sh7 billion to Sh978 billion due to a decline in lending.

‘When the government decided to lower its rates from 17 percent to the current range of 10 to 12 percent, the cost of funds went down, and the net interest margin has driven Kenya. The cost-income ratio of Kenya has moved from 57 percent to 47 percent,’ said Mr Mwangi.

‘What does it mean? That as at December, for every 100 shillings of revenue Kenya made, 57 was spent, but now it is only spending 47 and keeping 53.’

Equity’s DRC subsidiary raked in Sh13.8 billion in after-tax profit, Uganda (Sh2.9 billion), Rwanda (Sh4 billion), and Tanzania (Sh1.5 billion).

The bank’s pile of non-performing loans dropped by Sh10 billion in the three months from June to Sh129 billion, which management attributed to debt collections, especially in Uganda and Tanzania. Bad loans in Kenya were 18.2 percent of the total loan book, the bulk of which was held by corporate borrowers.

Besides banking, Equity also has subsidiaries in insurance, investment banking, telecom, and fintech. The non-banking operations raked in the group Sh800 million.

The bank’s performance saw its share price at the Nairobi Securities Exchange rise 5 percent in Thursday’s trading to a historic high of Sh63.50 per unit.

The hike in share price saw the bank’s valuation at the bourse rise by Sh10 billion on Thursday, cementing the bank’s position as the largest listed lender by market capitalization at Sh239 billion.

Kenya’s insurance penetration remains relatively low at just under 2.5 percent despite the rising insurance risks and the young population, that is hooked to digital platforms such TikTok, Instagram and X.

APA Life insurance CEO Erick Wanting speaks to Business Daily about the missing link in the race to deepen insurance penetration, filling data gaps to start offering personalised covers that appeal to the young people and the advantages of teaming up with banks.

You have previously served in senior roles at Liberty Africa and Hollard, giving you a view of the African insurance market. What is distinct about the Kenyan market?

For 18 to 19 years, I have been in Pan-African roles, with a lot of focus on Southern African Development Community (SADC).

There is a high cultural acceptance to life insurance in those markets, with the most popular ones being funeral and last expense products.

The Kenyan insurance market is a very well-established market, with some companies dating back almost 100 years.

However, the life insurance market is still quite concentrated. Products like funeral insurance are still mostly concentrated in higher net worth people.

Life insurance as a standalone product is still fairly new in the Kenyan context. The market is dominated by investment products.

However, as the younger generation is getting more exposure to information globally, I think they are starting to see the need and the value in having pure life insurance. But this a process that is going to take time. It is not going to be an immediate switch.

Kenya’s insurance penetration remains relatively low at just under 2.5 percent. What do you see as the strategies in increasing life insurance uptake among underinsured and uninsured populations, especially in rural and informal sectors?

The first thing is that we need to understand the people’s needs. We need to move away from a sales approach to a solution space.

It can no longer be a one-size-fits-all approach in terms of making sure that our products are relevant. We need to stop and ask: Does our product meet a customer’s need? What feedback are we getting from our intermediaries and our partners? Understanding what the customers’ need is at the core.

Secondly, our products need to be accessible. Kenya is the envy of a number of markets throughout Africa, because mobile money has created a platform for digital distribution.

The use of digital platforms can be a key enabler. But we have a lot to do to create the awareness of that product, even as we load these products into digital platforms.

Further, insurers need to ask: What is the value the customer is going to get out of it? And how does that process works when they need to make a claim? How do they make premium payments?

Our products need to be relevant and accessible. We have got to do a lot that demystifies the benefits of the product and that means a lot of work needs to go into educating our customers on the benefits of not just our products but of the insurance benefit in totality.

Do you feel there is a big gap in the market between what insurers are offering and what customers think is being offered?

Maybe this is a criticism that we need to look at internally. I think we need to be more deliberate in terms of the message we are putting into the market and what we are marketing through different distribution channels.

Are we reaching our customers through the right communication mediums? That is something that, as a strategy, we need to look at.

We have not done enough in making people understand [the value of insurance. We are not growing the market. We’re not growing the pie. Now we need to start focusing on growing the pie.

Investments in technologies like artificial intelligence and big data seem to be gaining traction as insurers move to improve underwriting and claims management process. How is APA Life playing in this space?

We are modernising our systems so as to harness the value that data and AI can offer. The second thing is using that system’s ability to create value for customers and efficiencies within the business.

We are constantly searching for refined answers to key questions such as: How do we manage our customers better? How do we make sure we are targeting the right customers to offer them the right solution when it comes to using data or using AI in our systems?

We will start seeing increased use of AI for predictive analytics to be able to identify risk areas a lot earlier. The process of modernising our systems is expected to unlock a lot.

As you think about AI, how do you ensure that you still have your hand on the handle as opposed to letting technology take over, given all the biases that may come with it?

This is a question that a number of people are grappling with: What is the role of AI and how is it going to influence business? I think we must be very careful so that we don’t run too far ahead in terms of allowing AI to make decisions when the business isn’t ready for it.

I think it is going to be an iterative process that we introduce in stages into the business.

At the moment, we should have the first line of checks that can be automated but then still have supervisors as a second line of defence, that can actually go and make sure that we’re paying out valid claims.

Software systems and the technology is going to be an entry to the game. But ultimately, it is the people who can use it that will count. That is where our focus is.

We will find our feet as we introduce different kinds of AI efficiencies over time. But there’s no doubt it is going to have a profound impact on how we operate.

Banks and insurers are increasingly teeming up to give life to bancassurance. How important is this distribution model for the industry?

I get very passionate when I speak about bancassurance because I think it is the perfect distribution channel for insurance. Banks are the most trusted financial institutions. Insurers are very good at managing risks. When you take the partnership of these two entities and you marry them, the outcome is a very powerful distribution proposition.

This is the reason why the growth in the bancassurance sector has been in the region of about 25 percent as a compound annual growth rate, compared to 11 percent in the insurance sector.

Banks are realising that to build an insurance business on credit life alone is not sustainable; you need to be a full-service insurance intermediary- which means aligning insurance need to all the banking services they offer.

Developing products that speak to the changing needs of people may require quality data, yet many industry players are suffering from massive data gaps. How can the industry go about it?

Data is definitely the new wealth. Unfortunately, given legacy systems-and APA is no different- a number of players in the market have legacy systems.

At APA, we are now recollecting data and rebuilding up our database. We have gone through a process of redesigning our five-year growth strategy and part of that has been the role of data analytics in the future success of the business.

We’re already in the process of building our data warehouses and recording the correct data.

A lot of it has to do with going back to our existing customer base, putting human resources in place to contact those customers and expand on the data gaps that we have. We will then back up this process with proxy data. It is a bit of an arduous process but one that will pay tremendous dividends in the future.

Today’s edition of the Business Daily carried a lead story on what the author reported was the IMF’s view of the exchange rate of the Kenyan shilling to the US dollar. The story quoted my comments in a panel discussion at a forum last Friday out of context and was misleading.

The fact is that the exchange rate is a price. In fact, it is multiple prices, reflecting the demand for various currencies. That demand arises because we are buying goods and services in the currencies in question.

In addition, we get inflows such as remittances, an eventuality that increases the supply of various currencies. Those who buy our goods and services, in turn, require Kenya shillings to pay us. It is these market conditions- forces, if you like-that determine the shilling versus dollar exchange!

The panel discussion on the total tax contribution of the financial sector raised the question that Kenya’s tax to gross domestic product (GDP) ratio is lower than the 25 percent the IMF recommends.

I responded that the ratio is a rule of thumb that should not be regarded as gospel truth, or implemented dogmatically, and that when looking at comparator countries, we should correlate like for like. Understood within that trajectory, the author of the offending content quoted me out of context.

During the said forum, I explained that buoyed by the economic model that informs the Vision 2030, Kenya has over the years invested heavily in infrastructure. That has grown the GDP, thus raising the denominator in the tax to GDP ratio calculation.

However, infrastructure does not yield taxes directly, so the numerator does not increase immediately. Rather, it enables production, which by extension creates incomes and therefore taxes.

Therefore, I said, we should not get hot under the collar just now, worried that the tax to GDP ratio is low. Once private sector activity picks up pace and ‘sweats’ the infrastructure to create incomes, the ratio will recover. In any case, I continued, many economists including myself, do not always agree with the Fund’s policy prescriptions.

To take those comments out of the context in which they were made and seek to give them life as a reflection of what the Fund believes or doesn’t on the exchange rate or any other matter, is stretching the bounds of journalism beyond the safe shores.

Fact and accuracy are the hallmarks of good content!

Three years ago, Elisabeth Gomis, a French film director was tasked with the responsibility of writing a concept for a forum of the cultural and creative sectors in Africa.

‘I knew the music industry was already set up but what are the other disciplines that need to be highlighted,’ recalls Gomis, a former journalist who traces her roots to Guinea Bissau. ‘We went for disciplines that have high economic potential, starting with video games which is the creative industry that makes the highest amount of money in the world, even more than cinema. So, we were like ‘if this is true for the global north, why can’t the money flow into Africa.”

The global gaming industry earned over $187 billion in 2024 with Africa’s market hitting $1.8 billion, according to the annual report by the Pan Africa Gaming Group (Pagg). Kenya contributes $46 million in gaming revenue, behind Egypt ($338m), Nigeria ($300m) and South Africa ($278m)

The first Forum Creation Africa in Paris in 2023, connected video games and related disciplines like animation and webtoons while this year’s event in Lagos, Nigeria, added other high-growth innovations to the programme: immersive world (virtual reality/augmented reality), video special effects, digital fashion and sound design.

Gomis was appointed as Director General of MansA – Maison des Mondes Africains (House of African Worlds) in 2024, a cultural institution dedicated to the promotion, transmission and celebration of contemporary African and Afro-diaspora cultures.

It was under MansA’s umbrella that more than 1,000 artistes, creators, producers and actors from over 40 African countries and Europe, recently met in Lagos to explore partnerships that would result in dynamic story-telling platforms and new economic models.

‘Networking with creatives from across Africa revealed that we all face variations of the same challenges. There are issues Nigerians have already overcome that we can learn from, and others to which South Africans may have found solutions,’ notes Salim Busuru, a Kenyan comic creator whose pitch won the webtoon category.

‘While you flip the pages of a comic, you scroll up and down a device for webtoons. The genre is the same, but the format is different,’ he explains.

Busuru’s winning pitch was for his current project Moran, an action-adventure comic based on African mythology. ‘The story is based on three cultures across Africa, the Ashanti, Maasai, and Zulu, and explores what African tribes would pick from Western culture and integrate into their own way of life, and which practices they would reject,’ he explains.

‘My motivation has always been visualising African stories because we grew up seeing Western animations with alien creatures like dragons.’

With his team of five artists and writers, Busuru has been developing the story for one year now. ‘We are currently in pre-production and thanks to this successful pitch, we will travel to France next year and meet editors and publishers and hopefully clinch a deal to market the project in Europe and other parts of the world.’

Gomis cites a self-taught gaming creator from Guinea after presenting a winning pitch in 2023, asked to learn the whole value chain for video games and was connected to a tutor for 15 days, met engineers who helped him transform his project. ‘At the end of the day we are creating entrepreneurs, they come sometimes as artists and they finish the mentorship as entrepreneurs but you also have to do advocacy to financiers and policy makers to deploy your business plan.

Using her own background as a documentary filmmaker, Gomis urges Africans in the creative and cultural sectors to transcend their production roles and seek ways of moving into the executive rooms to influence decisions.

‘As a director of films, you need to talk to a producer to find the money and that means you give up your rights. It means you are not fully responsible for what you are putting out in the world and my journey made me alive to this. Now that I am entering spaces that I never imagined before, I see that you have to be inside the room, you cannot be outside, to keep your story authentic from the beginning to the end,’ says Gomis.

She adds, ‘If you lose one step in the process, your narrative will be changed because it doesn’t fit the requirements of this person or the other. You have to be responsible for the project from the idea until the project is delivered and it gives you power and your story is not erased or diluted just to make it more conventional.’

This year’s Forum Creation Africa attracted high-powered guests like the Nigerian Minister for Art, Culture, Tourism and the Creative Economy Hannatu Musawa, the French Foreign Minister, Jean-Noël Barrot and the CEO of Access Bank, Aigboje Aig-Imoukhuede.

While touring the demonstration room, Aig-Imoukhuede was so excited about the creativity exhibited that he declared his company’s interest in supporting the developments in Africa’s creative sector.

‘We need to accelerate because some people who have power and money are ready to finance,’ declares an excited Gomis. ‘So, as people in the creative sector, we can speak totally freely and we can invite the policy makers, we can invite people with money to have discussions with us and at the end of the day reach a deal, maybe support for production, or a prize for a pitch.’

For creatives like Busuru the success of the forum in Lagos is a challenge to the African Union to come to terms with the creative sector as the next frontier for social and economic transformation on the continent.

‘It is a huge challenge to do any collaboration with my Nigerian colleagues when I have to apply for a visa and fill out formalities like landing and exit cards. Let us just remove these barriers and allow the youth to travel and flourish.’

According to Gomis, some governments have done better than others by investing in the creative sector. ‘Benin has designated culture as the second pillar of the economy, Morocco has created a whole ecosystem for video games, Senegal is investing big in cinema and of course the creative industry is giving a good image to Nigeria with its Afrobeats.

This is the moment for the youth to go and tell their leaders ‘Ok, it is the French Government who supported this in Nigeria. You are here, you are the Minister of Culture in Nigeria; I am a young Nigerian working in those fields, what can we do?’

At that time what can you do as a Minister? You are forced to listen and act because your own people are looking at you. The fact that our Minister travelled from Paris to be here, forced the policy makers in Nigeria to make a move because it is your country here and it can’t be a foreign state that is running the show.’

Small lender Habib Bank AG Zurich is Kenya’s cheapest bank for borrowers seeking a Sh100,000 personal loan over a 12-month period while Sidian is the priciest, new data on the cost of credit shows.

Disclosures on a portal operated by the Kenya Bankers Association (KBA) show that Housing Finance Corporation, ABC Bank and Standard Chartered Bank are the other relatively cheap lenders while Guardian and Access Bank Kenya have the second and third costliest loans for the same facility.

The website reveals the total cost of credit including additional fees.

A borrower would repay Sh112,750 for a Sh100,000 loan taken from Habib Bank AG Zurich, which only charges an annual interest rate of 12.75 percent without any fees.

The cost of Sh12,750 therefore rep-resents pure interest. At Sidian, the same borrower would on average pay back Sh131,100, a difference of more than Sh18,000, with the lender imposing additional fees above its 16.22 percent annual interest rate.

A Sh100,000 loan at Sidian attracts interest of Sh16,220, bank charges of Sh12,400 and Sh2,480 as third party costs, making it the most expensive bank for the facility across the board with the total loan cost of Sh31,100.

The total cost of credit at the Middle East Bank is Sh23,980 despite the lender pricing its facility at the highest interest rate of 23.98 percent but not levying additional fees.

The total cost of credit website reveals the pricing of loans under the current risk-based pricing regime which is set for a revamp concluding at the end of February 2026.

The portal shows that lenders are charging the same for both secured and unsecured personal facilities. The analysis done on Thursday captures the cost of taking a one-year, Sh100,000 loan from the 33 banks offering personal loans.

KBA Head of Research Samuel Tiriongo said all banks will be ready to roll out the new pricing regime which is anchored on the Kenya Shilling Overnight Interbank Average (Kesonia) at the end of this month.

The total cost of credit portal is also set for a revamp to cover more facilities beyond the current listing of mortgages, personal unsecured and personal secured loans.

‘By November 30, all banks should have their models ready and approved. The beauty is that this time, only the board is approving the framework. Once the board approves, each bank can proceed to implementation,’ Dr Tiriongo said.

‘All banks have to publish the average premiums for all products that they have within their books.’

Banks are set to transition to the new pricing regime from December for new loans while applying the improved framework on old loans by the end of February 2026.

The new pricing regime is deemed more responsive to policy direction by the Central Bank of Kenya (CBK), with borrowing costs expected to fall when the apex bank cuts its benchmark and rise when the rate increases.

The CBK has piled pressure on commercial banks to lower interest rates through eight consecutive cuts to the benchmark rate, which now stands at 9.25 percent from a high of 13 percent in August 2024.

Private sector credit growth recovered modestly to an annual rate of five percent as of the end of September, a far cry from the double-digit historical expansion.

Average commercial banks’ lending rates declined to 15.1 percent in September from 15.2 percent in August but have remained relatively higher when contrasted to CBK rate cuts in the past 12 months.

‘The committee (Monetary Policy Committee) concluded there was scope for a further easing of the monetary policy stance by reducing the CBR [central bank rate] by 25 basis points,’ the CBK said on October 7.

‘This will augment the previous policy actions aimed at stimulating lending by banks to the private sector and supporting economic activity, while ensuring inflationary expectations remain firmly anchored, and the exchange rate remains stable.’

Banks have previously cited a variety of factors for failing to cut interest rates to borrowers faster including locking in costly acquired deposits for long and the lack of an industry benchmark for pricing loans before Kesonia was set.

The CBK has responded to bankers, asking them to avoid excuses for failing to cut borrowing costs in tandem with the benchmark rate cuts.

‘There should be no excuse by banks for whatever reason … there have been quite a number of excuses. This time, there won’t be an excuse. Once we lower the (benchmark) rate, banks should also lower their rates,’ CBK Governor Kamau Thugge said previously.

Banks have cited other challenges to the pricing of loans, including a previous lack of adequate capacity to develop sound risk-based frameworks.

The final cost of credit to borrowers is expected to be Kesonia plus a premium based on each customer’s risk problem, which has been dubbed K. The premium factors bank operating costs, including expected returns to shareholders.

At a time when many businesses are navigating economic uncertainty and tightening their budgets, East African Breweries (EABL) has made a bold strategic move that could reshape how Kenyan companies think about growth.

By raising Sh11 billion through a corporate bond, part of a larger Sh20 billion Medium-Term Note programme, EABL has not only strengthened its own financial position but also sent a powerful message to the broader business community that the capital markets are open, and the time to act is now.

At its core, EABL’s bond is a simple idea executed with precision. The company issued a five-year unsecured bond at an interest rate of 11.80 percent per annum. Investors who buy the bond will earn this return annually, while EABL uses the funds to refinance older, more expensive debt and improve its cash flow.

It’s akin to a homeowner refinancing a mortgage at a lower rate, freeing up money for other priorities while reducing long-term costs. For EABL, this means preserving shareholder value without issuing new shares or diluting ownership.

This move couldn’t have come at a better time. The Central Bank of Kenya recently signalled a shift toward monetary easing, lowering the base lending rate and making borrowing more affordable. Inflation is stabilising, and interest rates are softening.

For businesses, this creates a rare window to access cheaper capital and restructure their finances. EABL seized that opportunity and others should follow suit.

The implications for Kenya’s private sector are profound. Many companies, especially in manufacturing, logistics, and agribusiness, rely heavily on short-term bank loans with high interest rates and rigid repayment schedules. These loans often stifle growth and limit innovation.

EABL’s bond shows there’s another path: tapping into the capital markets to raise long-term funds from investors, pension funds, insurance companies, and even individual Kenyans, who are looking for stable returns.

Imagine a tea processor in Kericho issuing a bond to build a new factory, or a logistics firm in Mombasa raising capital to expand its fleet. These aren’t far-fetched ideas. They’re viable strategies that can unlock growth, create jobs, and boost exports, if businesses are willing to step forward with credible plans and transparent financials.

The government has a critical role to play in making this happen. Beyond monetary policy, it must continue to reform the regulatory environment to make it easier and cheaper for companies to issue bonds. Recent efforts to streamline approvals and improve investor protection are encouraging, but more can be done.

Tax incentives for first-time issuers, credit guarantees for mid-sized firms, and a vibrant secondary market for corporate bonds would go a long way in deepening participation and reducing reliance on government securities.

Kenya’s manufacturing sector, long seen as the engine of economic transformation, has been stuck in neutral gear for years. High energy costs, outdated equipment, and limited access to capital have held it back. But with the right financing tools, like corporate bonds, this sector could become a powerhouse of innovation and productivity.

EABL’s bond offers a blueprint, use domestic savings to fund domestic growth- match long-term liabilities with long-term projects, and reduce exposure to volatile bank lending cycles.

Ultimately, this is about changing how we think about financing. For too long, Kenyan businesses have looked to banks or foreign investors to fund their ambitions. But the truth is, our own capital markets are deep, liquid, and ready.

What’s missing is more companies stepping forward with bold ideas and bankable plans. EABL has lit the path. Now it’s up to the rest of private sector to follow.

This bond is more than a financial transaction. It’s a wake-up call, a challenge, and an opportunity. If embraced widely, it could mark the beginning of a new era, where Kenyan businesses finance Kenyan growth through Kenyan capital.

The Kenya Tourism Federation (KTF) has raised objections to the new park fee payment system introduced by the Kenya Wildlife Service (KWS), saying the abrupt rollout has caused financial disruptions.

KTF, which represents key private sector players in the tourism industry, claims that the new system was implemented without prior consultation with industry stakeholders.

The federation further notes that the move has created operational and financial challenges for tour operators, travel agents and visitors.

‘The rollout of the new KWS park payment system has created unnecessary financial strain and uncertainty for operators who had already priced and contracted tours under the previous arrangements,’ said KTF Chairman Fred Odek.

‘The additional fees and limited payment options translate to unbudgeted losses and threaten existing contracts with our international partners,’ he added.

Under the new system, only M-Pesa and Visa card payments are accepted, with KWS scrapping the bank transfer option that many tour operators relied on for group payments.

What has further unsettled the industry is the introduction of an 8.5 per cent processing fee for all card payments, a rate KTF says is high compared to other government platforms.

KTF has also faulted KWS for using an inflated exchange rate of Sh135 per US dollar, which is higher than the Central Bank of Kenya’s current rate of around Sh129.50. The federation says the discrepancy has pushed up park entry costs, making Kenya’s destinations less competitive both regionally and globally.

Tourism players fear the changes could ripple through the value chain, that may affect contracted packages, which threaten to cost operators millions in unforeseen expenses and discourage visitors from booking future trips.

The federation has urged the Ministry of Tourism and Wildlife and KWS to reinstate all previous payment options, including bank transfers, to allow flexible transactions. It also wants the 8.5 percent processing fee reviewed and aligned with the standard industry rates, and the exchange rate adjusted to reflect the Central Bank’s official rate.

‘KTF remains committed to working closely with KWS and the Ministry of Tourism and Wildlife to ensure that Kenya’s tourism industry remains sustainable, fair, and competitive,’ Mr Odek said.

The federation insists that future policy or system changes must involve structured consultations with private sector players to avoid disruptions that could damage Kenya’s reputation as one of Africa’s top wildlife destinations.

Consequently, tourism experts warn that Kenya risks pricing itself out of the regional tourism market as the park fee increases take effect. Tanzania’s safari product is currently taking the lead while Uganda continues to gain ground.

Tourism Cabinet Secretary Rebecca Miano says the ministry is aware of these concerns and is pursuing an approach that prioritises affordability and investment-led growth to safeguard the country’s position as East Africa’s most dynamic tourism hub.

‘Kenya’s global brand has been anchored on safari and beach tourism. While these remain strong pillars, we recognise the need to diversify and make our destinations more affordable, competitive, and accessible,’ Ms Miano said.

She added that Kenya’s competitive edge should extend beyond the traditional big-five experiences, noting that the country’s tourism is richer and untapped than most visitors realise.