Category: Business Daily

For many years, growth in Kenya’s financial services sector was driven by physical expansion. Banks competed to grow their branch networks and increase headcount, with many prioritising scale.

However, the underlying economics of banking have recently evolved with today’s customers demanding performance, seamless service, quicker responses, and meaningful access, as opposed to physical presence.

In response, restructuring physical presence has become a critical element in the strategy of forward-looking banks that recognise the need to align with these new market realities.

When implemented effectively, branch restructuring enhances speed of service, accountability, and relevance to the customer, essential for strengthening the balance sheet, profitability and cost of service for a bank.

Achieving this transformation requires a careful assessment of one’s distribution models.

Across Kenya, mobile money and agency banking have changed how customers consume financial services. While physical infrastructure still plays a role, it must now integrate with digital platforms and community-based channels.

In this new environment, a smaller, more intelligent network can often deliver better results than a larger, less agile one. Indeed, accessibility and ease of transacting, rather than geography alone, define proximity in the modern context.

For example, we at Faulu Microfinance Bank have invested heavily in digital-first transformation, expanding online services to reach more customers across Kenya.

Equally vital is the rethinking of human capital, as banks can no longer operate with rigid hierarchies and siloed teams.

Success increasingly depends on institutions that empower agile, tech-savvy professionals who can make decisions closer to the customer.

As automation handles more routine tasks, the real differentiator from now on becomes the ability to address problems and deliver value in real time.

The bank has rolled out tools such as the digital field agent tool to empower staff to deliver banking services digitally at the customers’ premises to realise this evolution.

However, distribution model restructuring must remain grounded in customer outcomes. Internal changes often fall short when they fail to improve the client experience.

Streamlined structures, smarter systems, and reduced costs are only meaningful if they result in faster onboarding, simpler transactions, and greater trust. The most important question today is not whether a process is efficient, but whether it better serves the people it was designed for.

Meanwhile, even as banks continue to innovate, they must remain critically aware that competition in the financial sector is intensifying.

Fintechs, mobile operators, and other non-traditional players are offering services that not only rival those of established banks but frequently outperform them. These challengers benefit from their focus and flexibility, unburdened by outdated systems or institutional inertia.

Against such realities, banks that delay restructuring risk falling behind, resulting in eroded market share and heightened cost of change.

Those that act early, with clear goals and disciplined execution, however, have the opportunity to gain both efficiency and renewed relevance.

Kenya will save $215 million (Sh27.79 billion) annually after converting its three dollar-denominated standard gauge railway (SGR) loans to yuan, with repayment in the Chinese currency set to start in January next year.

Treasury Cabinet Secretary John Mbadi on Tuesday said Kenya had already converted most of the dollar-denominated loans owed to Beijing to Chinese yuan, paving the way for the country to switch from the expensive floating, dollar-based interest rates.

Imagine this: in a youth centre outside Nairobi, four teenagers join a facilitator in call-and-response music making. Shoulders loosen, hands find rhythm, moods shift.

What once looked like an arts club now carries a new label-music therapy. The songs are familiar, but what’s new is the structure: goals, methods, and measures. This clinical scaffolding makes the difference between casual singing and a recognised therapeutic intervention.

Kenya has always healed through music-lullabies in maternity wards, choirs in moments of grief, drumming that binds communities. Professional music therapy does not replace these traditions; it curates them within ethical and clinical frameworks.

Sessions target clear goals such as reducing anxiety, improving attention, or supporting emotional expression, while evidence is tracked through checklists, scales, and reflection.

Why invest?

The economics are persuasive. International research shows music therapy is not just effective but often cost-saving.

In US intensive care units, a patient-directed music programme delivered by therapists reduced time on mechanical ventilation, saving about $2,300 per patient at an average cost of only $329.

In dementia care homes, music therapy reduced agitation at £13-£27 per person, far lower than the costs of other interventions. In neurosurgery, perioperative music was found to be cost-effective in reducing postoperative delirium.

Group music therapy for schizophrenia in Chinese nursing homes dominated treatment-as-usual, providing clinical benefit at lower overall cost. Even in paediatrics, therapist-supported music has helped reduce sedation needs-making care both safer and more affordable.

These numbers matter for Kenya, where mental health services remain underfunded and clinical staff are stretched thin.

Music is already embedded in everyday life, trusted across generations and communities. Introducing professional music therapy offers a low-cost, high-reach solution that extends care into schools, hospitals, and community halls.

An ideal life insurance cover should range between four and eight times one’s annual gross salary, financial experts say, a figure that often surprises many first-time policy seekers.

Life insurance is about protecting your family’s future, ensuring that in your absence, they can grieve, heal, and rebuild without financial distress. But how do insurers decide what your life is worth, and what determines how much you should actually be covered for?

Cross-border traders, Kenyans in the diaspora, and multinationals are increasingly using stablecoins for payments, setting the stage for wider adoption of digital assets in everyday finance in Kenya.

Kenya made Sh426.4 billion ($3.3 billion) worth of transactions in stablecoins in the year to June 2024, according to Chainalysis, a New York-based blockchain data platform that tracks crypto use.

Kenya’s fertiliser imports have dropped for the second straight year, signalling a cooling of the government’s subsidy programme that drove record shipments in 2023 and stood at the heart of President William Ruto’s food security agenda.

Data by the Kenya National Bureau of Statistics (KNBS) shows that the country imported 443,701 tonnes of fertiliser between January and June 2025, valued at nearly Sh25.63 billion, down from 445,857 tonnes worth Sh27.71 billion in the same period of 2024.

A group of 132 staff of the Kenya Medical Research Institute (Kemri), including research scientists, has escalated their fight for equal pay to the Court of Appeal, challenging an Employment and Labour Relations Court decision that dismissed their discrimination claims regarding special allowances paid to medical doctors.

Their claim relates to entitlement to five allowances totalling Sh201,000 monthly. Central to the legal dispute is a claim that only 268 of Kemri’s 931 employees were receiving these benefits.

Kiru, Michi and Chinga tea factories netted the highest prices at the maiden orthodox tea held about a fortnight ago, disclosures show.

Records from the regional auction in Mombasa showed that tea from Kiru, which is located in Mathioya, Murang’a County, fetched the highest price at $3.87 (Sh500.15) a kilo during the sale, followed by Michi $3.77 (Sh487.23), Chinga $3.76 (Sh485.94), and Kagwe $3.70 (Sh478.18).

Africa’s urban centres are expanding at an unprecedented pace. By 2050, they’re projected to welcome nearly a billion new residents. This explosive growth presents tremendous opportunities and significant challenges.

While cities serve as engines of economic progress, they often develop in ways that exclude large segments of their populations through rising costs and poor planning. Designing urban expansion with inclusivity in mind can help solve this problem.

The foundation for inclusive cities begins with thoughtful land management. When cities treat land purely as a commodity, prices inevitably rise beyond what most residents can afford. Kigali, for example, offers a compelling alternative through its leasehold system, where the government maintains ownership while issuing long-term usage rights.

This approach stabilises land values, prevents speculative bubbles, and ensures development benefits the entire community rather than just wealthy investors.

Housing policy represents another critical lever for inclusion.

The traditional model-or default-of isolated luxury developments alongside neglected slums serves no one’s long-term interests and is, at best, lacking strategy.

In fast developing economies, we have seen new developments that demonstrate the power of mixed-income communities, where affordable units are integrated into market-rate developments. Such projects create vibrant, diverse neighbourhoods while giving lower-income residents access to better services and opportunities.

Transportation systems also often reveal a city’s true priorities. While, for instance, Lagos’ BRT network initially focused on wealthier corridors, Addis Ababa’s light rail system was designed from the outset to serve all residents with flat, affordable fares.

Well-planned public transit helps bridge economic divides by connecting people to jobs, education, and services regardless of their neighbourhood or income level.

The ‘informal economy’ still employs the majority of urban Africans, yet many cities treat street vendors and market traders as problems rather than assets.

Upgrading rather than removing informal commercial spaces can preserve livelihoods while improving safety and sanitation. Smart cities recognise that informality often represents rational adaptation to economic realities, not something to be eradicated.

When allocating limited municipal resources, basic infrastructure in underserved areas delivers more value than showcase projects. A good example is Dar es Salaam’s decision to prioritise water and sanitation in informal settlements which dramatically improved living conditions for thousands. This approach demonstrates how targeted investments in fundamentals can uplift entire communities.

The time for incremental change has passed. African cities need bold, comprehensive approaches to urban development that place inclusion and affordability at the centre.

The solutions-and successful examples-exist. What’s needed now is the collective will to implement them at scale across the continent’s rapidly growing urban landscapes.

Community engagement also produces better outcomes than top-down decision making. In Zambia, when residents of informal settlements mapped their own neighborhoods and guided upgrade plans, the results reflected actual needs rather than bureaucratic assumptions.

Although technology implementations often bypass the urban poor, they don’t have to.

Simple modernisation tools – like prepaid utility meters – bring reliable service to previously excluded neighborhoods, proving that innovation can expand rather than restrict access.

True smart city initiatives should be judged by their ability to serve marginalized communities, not just technological sophistication.

The costs of exclusion manifests in strained social systems and reduced economic potential. For example, Johannesburg’s stark inequalities have resulted in creating massive expenditures on private security and lost productivity. In contrast, cities that prioritize inclusion benefit from greater social stability and shared prosperity.

Creating inclusive cities isn’t easy – it requires thoughtfulness, innovation, and coordinated action across multiple fronts. The approaches I have mentioned are being tested and proven across African cities.

The challenge now lies in scaling them systematically. Municipal leaders have both the tools and successful examples to guide action.

The coming decade of urban growth presents an opportunity to build differently; more intentionally, with technology and governance integrated into master plans, and focused on creating cities that work for all their residents.

Kenya’s recent upgrade by S and P Global Ratings from B- to B is more than a technical adjustment, it’s a turning point in the country’s economic story.

As Kenya edges closer to joining Botswana, Mauritius and Morocco among Africa’s investment-grade economies, the ripple effects are already being felt: Eurobond yields have dropped by 0.6 percent, unlocking an estimated $220 million in potential savings on debt service.