Category: Business Daily

Cement consumption and production hit an all-time record high in August, signalling recovery in the construction sector that contracted last year due to expensive bank loans, reduced State spending on public infrastructure, and strains of pending bills.

Data from the Kenya National Bureau of Statistics (KNBS) shows that consumption of cement, a key input in the building and construction industry, hit a record high of 907,154 tonnes in August, indicating a boom for manufacturers in the sector.

The record consumption was matched by cement firms, which produced 920,442 tonnes in August and 906,979 tonnes in the previous month.

‘Cement production increased from 907.0 thousand tonnes in July 2025 to 920.4 thousand tonnes in August 2025. Similarly, cement consumption rose from 888.0 thousand tonnes to 907.2 thousand tonnes over the same period,’ said the KNBS.

The sector suffered its first contraction in nearly 11 years, as output fell by 2.9 percent in the quarter ended June 2024, hurt by budget cuts on major projects, high costs of materials like cement, and a significant drop in private sector credit to the industry.

These developments affected the consumption of cement.

Latest data shows signs of a rebound in construction activities on the back of the resumption of stalled public projects after the government announced it had started paying off contractors following verification of debt claims.

Some 580 projects had stalled due to unpaid bills, resulting in reduced cement consumption last year.

In April, hundreds of road contractors resumed work after the government received Sh63 billion to pay pending bills, unlocking an impasse that stalled more than 580 projects.

Contractors (both foreign and local) laid down tools over the government’s failure to pay them billions of shillings for both ongoing and completed works, some dating back to as early as 2016. The debt was estimated at over Sh650 billion as of July last year, with some contractors claiming over Sh10 billion.

Failure to pay the contractors was attributed to a thinning fiscal space as the Treasury grappled with mounting debt payments that had left little cash for other items like pending bills and development projects.

While addressing the Parliament in July, Cabinet Secretary for Roads and Transport, Davis Chirchir, said the government is actively addressing pending bills to ensure the completion of stalled road projects across the country.

“The biggest challenge has been the lack of liquidity to settle pending bills. That is why contractors halted work,” said the CS.

Mr Chirchir added that contractors had agreed to write down up to 35 percent of the interest on the delayed payments in a bid to ease pressure on the government.

The resumption in construction projects helped to spur the economy in the second quarter of 2025.

KNBS data shows that the economy expanded by 5 percent in the second quarter of 2025, compared to 4.6 percent in the same period last year, driven by a rebound in construction activity and strong performance in the agriculture and financial sectors.

Similarly, in the same period under review, the Central Bank of Kenya lowered its benchmark interest rate from 9.75 per cent in July 2025 to 9.50 percent in August 2025, resulting in cheaper credit to contractors in the building industry.

Nursing colleges are expanding across the country, particularly in urban areas, offering hope to a population in need of quality healthcare.

Private health institutions, such as Nairobi Hospital, MP Shah, and Nairobi Women’s Hospital, are increasing their intake capacities and producing more nurse graduates who are ready to provide services, reducing the shortage in the health sector.

However, behind these numbers lies a stark reality. The country is still struggling to meet global benchmarks for health workforce densit

‘Kenya continues to face a shortage of nurses and midwives. Key factors identified as causing the shortage of nurses and midwives include brain drain, a poor working environment, natural attrition, a rapidly growing population, an ageing population, and emerging diseases,’ said the Nursing Council of Kenya (NCK) in their latest policy brief.

While Kenya’s nurse-to-patient ratio has increased from 8.3 to 22.7 per 10,000 people, the 2025 World Nursing Report shows that this is still below the World Health Organization’s (WHO) recommendations, an indication that, although more nurses are entering the system, the scale of production is not yet sufficient to meet the country’s healthcare needs.

The WHO recommends a minimum of 25 nurses per 10,000 people to ensure universal access to essential health services.

Data from the Economic Survey indicate that the number of graduate nurses has increased, from 4,808 in 2020 to 9,189 in 2024, a 91 percent rise over four years.

However, thousands of these professionals are leaving the country to seek better opportunities abroad, drawn by higher salaries, clearer career progression, and improved working conditions.

Even those who remain in Kenya often struggle to find employment in hospitals or clinics, leaving many qualified nurses unemployed.

Peterson Kirui, a Moi University Eldoret nursing graduate, has worked part-time for two years at a small dispensary in his home area. It was a tough struggle, but the pay was too low to provide even the bare minimum for survival, so he decided to take up research work instead.

‘I have had to look for other sectors of the economy to put food on the table. I have had to go into research,’ he said.

Mr Kirui’s situation mirrors that of thousands of nurses across the country who have qualified but cannot find employment, highlighting a growing disconnect between training and service delivery.

The cost of a three-year nursing diploma varies widely depending on the institution. At public colleges such as the Kenya Medical Training College, government-sponsored students pay about Sh240,000 for the entire course, while self-sponsored students pay around Sh359,700.

Read: Diploma nurses eye level pay with degree holders on upgrade

At private hospital-based colleges such as Nairobi Women’s Hospital, the cost is about Sh405,000 for three years, while at Nairobi Hospital Nursing College, it is around Sh603,000.

According to the NCK, around 10,000 students graduate with nursing qualifications each year, yet fewer than 3,000 find employment. The NCK also says more than 40 percent of registered nurses are either unemployed or underemployed, indicating an intensifying crisis.

‘Almost 50 percent of the difficulties in filling vacant positions relate to budgetary constraints, followed by a lack of goodwill from county governments to fill the required positions,’ said the NCK.

The implications are severe. Hospitals operate under chronic staff shortages, which is overwhelming for those on duty and means that patients have to wait for hours or go without essential care.

‘The emigration of nurses and midwives, especially those in specialised categories, has a crucial bearing on the quality of care provided in health facilities. This is a critical concern for healthcare systems at all levels as it has an immediate and long-term effect,’ said NCK.

A report by CGFNS International on nurse migration showed that, in 2024, Kenya accounted for 6.5 percent of all African applicants seeking US VisaScreen certification to work in the United States.

A 2023 report by the Ministry of Health revealed that up to 64.4 per cent of healthcare professionals had expressed a desire to emigrate.

While the government claims that this could increase remittances to the country, strengthen the foreign exchange rate, and boost the overall economy, some health officials have cautioned against the looming shortage of qualified medical personnel.

‘Labour migration is a critical component of our socio-economic development, benefiting both Kenya and the countries that welcome our workers. This is why we continue to negotiate bilateral labour agreements to facilitate safe and orderly labour migration, protecting Kenyan workers’ rights and facilitating their access to international job markets,’ said President Ruto during last year’s Labour Day celebrations.

Added NCK: ‘Emigration (92 percent) and increased patient volume (92 percent) are the main contributors to staff shortages, as is high staff turnover and retirement (88 percent).’

Recently, Kenya has seen hundreds of nurses move to the UK under bilateral agreements, while smaller numbers have sought jobs in Canada, Australia, and the Middle East.

In August 2023, 76 Kenyan nurses were sent to the UK to work under a bilateral health workforce agreement.

In April 2024, the government and Mount Kenya University sent the first group of five nurses to Germany as part of a plan to create 250,000 jobs for Kenyans.

However, rather than allowing Kenyans to seek jobs abroad, the United Nations Conference on Trade and Development has urged the government to improve pay and working conditions to discourage people from seeking employment elsewhere.

‘To stop brain drain, the government must improve working conditions and provide incentives. In the medium term, the government should enhance the attractiveness of job opportunities by improving pay and benefits,’ said the UN agency.

Electricity imports hit a record high of 150.45 million kilowatt-hours (kWh) in August 2025, bringing to the fore Kenya’s deepening reliance on neighbouring countries to avert power rationing.

The latest official data shows that Kenya’s overall electricity imports rose five percent from 142.36 million kWh a month earlier, driven by increased supply from Uganda.

Kenya nearly doubled imports from Uganda in August, supplying 32.5 million kWh compared to 18.95 million kWh a month earlier, as imports from Ethiopia dipped in the same period.

Kenya recently completed another transmission line to Uganda, enabling it to buy more electricity from the neighbouring country. The new connectivity to Uganda ensures an enhanced supply of electricity to western Kenya.

Kenya has, in the last few years, significantly relied on Ethiopia and Uganda to bolster supplies and avert possible load shedding amid a rising demand and a freeze on new power purchase agreements.

Electricity demand hit a new peak of 2,363.41 megawatts in August this year, pointing to the surge in demand which has left Kenya staring at possible forced rationing in the absence of supplies from Ethiopia and Uganda.

Kenya Power Managing Director Joseph Siror recently said the reliance on imported electricity is increasingly leaving the country exposed.

‘It is a major concern, and this is not premised on the thinking that they will be unable to support us. Rather, my concern is that this is hydropower from these countries and, in a situation where there is a serious drought, it may put them in a position where they might be unable to meet this obligation,’ Dr Siror said two weeks ago.

Increased connections and the use of electricity by homes and industries are behind the growing demand.

The country imported 117.77 million kWh from Ethiopia in August this year, compared to 122.08 million kWh the previous month.

The record-high imports in August came in a month when local generation marginally dipped one percent to 1.146 billion kWh.

Generation from Kenya’s dams and wind power plants dipped in August, triggering the overall fall in the local electricity production.

Hydropower production in August was 296.01 million kWh from 320.73 million kWh the previous month, while output from the wind plants fell to 154.99 million kWh compared to 165.51 million kWh in the same period.

Hydropower is the second biggest source of power in the national grid, accounting for 23.7 percent in the eight months to August, ahead of wind and imports at 12.7 percent and 10.9 percent, respectively.

Geothermal, which is mainly supplied by the State-owned Kenya Electricity Generating Company, is still the dominant source of power in the country and had a share of 39.7 percent in the eight months to August.

Kenya has a 25-year power import deal with Ethiopia, where the country takes a maximum of 200 megawatts in the first three years, but this will double from December 2026.

Kenya also has power exchange deals with Uganda and Tanzania, where the country that imports more in a given period pays the other.

Nairobi’s Eastern, Northern and Southern bypasses, as well as their link roads, have a unique, but also annoying, history. It ended well, though, bespeaking the late Raila Odinga’s boldness in driving public good.

The bypasses, which provided much-needed relief to local and transnational traffic that did not enter the city centre, had been projected and planned for in the 1970s.

Since the corridors traversed private land, compulsory acquisition was done, and those affected were compensated. But the acquisition was not followed up with construction.

For years, life went on, with the corridors remaining unclaimed and hence available for all manner of land uses, other than the reserved one. Ultimately, politically correct operatives in the Kanu government, famous for high levels of public land-grabs, ‘discovered’ them.

With the connivance of those in public offices, the corridors were quickly re-planned into plots and subsequently allocated. The construction of palatial houses, and, in some cases, offices, followed and were completed in the 1990s.

It remains rather intriguing how people entrusted with leadership have lost vision and compromised, rather than protected, such vital public corridors.

It was then that the Council of the Institution of Surveyors of Kenya (ISK), which was privy to the bypass corridors grabbing, flagged the matter publicly.

It teamed up with Odinga, then minister for Roads, Public Works and Housing, to push for the opening up of the corridors. The ISK provided hard evidence of the public land grabbing by private individuals.

Convinced that there was a good case, and supported by an able team of his then Assistant Minister, Joshua Toro, PS Erastus Mwongera, Odinga confronted this seemingly insurmountable challenge boldly.

He was not deterred by the fact that the corridors had been re-planned and allocated at a high level, and that the beneficiaries were well-connected and influential persons.

Odinga provided focused and resolute leadership at a most needed moment. As the then chairman of the ISK Council, I witnessed the bureaucracy, the technical and political obstacles that he and his team had to relentlessly navigate.

The ministry went on to issue public notices, asking beneficiaries in the corridors to vacate, or else be evicted. Most resisted. Some went to court.

However, between 2004 and 2005, they were evicted, and developments were demolished, with construction of the bypasses commencing.

Ultimately, the bypasses were opened up and gradually constructed. Today’s leaders must learn to be bold in advancing and protecting public lands and resources, despite the risks.

Confronting threats and obstacles in the pursuit of the public good is what defines good leadership. On this, Odinga provided a powerful model.

Head of Public Service and County Secretaries held a convention last weekend. A first, it explored how to make the civil service effective at county level.

On the menu, national interest, securing the state, and moving from political promises to programs and obtaining impacts, and effective performance management. That effectiveness supports growth.

Vision 2030, Kenya’s national interest, identifies an efficient, motivated, and citizen-focused public service is a major enabler.

Therefore, the public services, both at national and county level are expected to implement results-based management, strengthen accountability and transparency, and enhance strategic planning. The convention was a timing reflection on how we are doing.

In the theory of democratic governance, leaders are elected on the basis of a platform, which we typically call manifesto. At the county level, that manifesto informs the County Integrated Development Plan (CIDP).

Thereafter, an annual slice of CIDP becomes the annual development plan, which when funded becomes the budget, and appropriation act.

New revenue measures are enacted with a finance bill, and where borrowing is necessary, this must be approved in the debt management plan.

The CIDPs must be anchored in longer term development plans, currently the Vision 2030. In this way, government action at both levels can have coherence. The civil service is at the heart of preparing, and once approved implementing, that annual plans.

To be effective its leadership must ensure proper performance management.

The constitution provides a variety of institutions to aid in that regard, including those providing assurance (Internal Audit, Controller of Budget) and oversight (Auditor General, County Assembly and Senate). A county secretary therefore, is at the heart of driving performance management.

But how do citizens make their choices? Economists talk about standard preferences, assuming our choices to be stable, well informed, and free of bias. However, they are anything but. They are who we are, and influence our political choices.

And, at home and abroad, citizens are choosing politicians with little to offer beyond ethnic bigotry, racism and division. This may explain why we struggle with ethnic diversity in the public sector. We are all tribalists!

Further, and unfortunately, that various political leaders employ vicious language daily, legitimizes the public expression of views that people probably have, but rarely speak out or act upon.

Vision 2030 has three pillars:- to achieve an average economic growth rate of 10% per annum and sustain it to generate resources for national development (economic), achieve an issue-based, people-centered, results-oriented, and accountable democratic system (political) and to build a just and cohesive society with social equity in a clean and secure environment (social).

To get there requires enablers. First, macroeconomic stability with consistent fiscal and monetary policies to attract investment and fostering sustainable growth.

Second, intensified application of science and technology to increase productivity and efficiency across all sectors of the economy. This includes ICT infrastructure such as National Optic Fibre Backbone Infrastructure (NOFBI) and, the Konza Technopolis.

To create a globally competitive workforce, education and training must be enhanced to provide citizens with the skills needed for a rapidly industrialising economy.

This involves focusing on skills development, technical training, and fostering a knowledge-based society. That was the reasoning behind the introduction of the competency-based curriculum (CBC).

Infrastructure and energy are vital for the expansion opportunities and wealth creation for all. So the vision relies heavily on deploying world-class infrastructure.

This includes expanding and modernising roads, railways, airports, seaports, and water and sanitation facilities to increase connectivity and lower the cost of doing business.

The vision requires that we generate more energy at lower costs and increase efficiency in energy consumption to meet the demands of a growing economy. This includes exploiting renewables like geothermal, solar and wind power.

To deliver that infrastructure, Kenya has relied on debt financing. This has come at a cost. The public sector has crowded out the private in the credit market. This coincided with high interest rates.

That is why growth in credit to private sector is a critical policy question at this time.

When producers sell across county lines, they are faced with additional licensing costs.

Economists believe that the benefits of trade are more than the costs. An example is the CEREB region who estimated that these benefits would be sufficient for counties to reimburse each other what they would lose if they removed the single business permit costs of small business from neighboring counties.

The Treasury earned Sh13.1 billion in five years from buying government paper using cash that investors have failed to claim in bank accounts, dividends and mobile money wallets such as M-Pesa.

The Unclaimed Financial Assets Authority (UFAA)-an agency under the Treasury-says it invested unclaimed cash worth Sh22.3 billion in buying Treasury bonds and bills between 2019 and 2024.

This earned it a cumulative return of 58.7 percent or Sh13.1 billion, with the cash being kept in a bank because there is no policy to guide the use of the earnings.

Unclaimed assets include money in bank accounts and dividends which have been dormant for more than five years, bankers’ cheques not cashed and contents in safe deposit boxes unclaimed for more than two years.

Insurance policies that remain uncollected for two years and cash sitting in mobile telephony wallets for the same period should be transferred to UFAA.

Unclaimed cash, shares and dividends surrendered to UFAA crossed the Sh75 billion mark in November last year, reflecting the difficulty in reuniting the idle wealth as investors, including tycoons, show disinterest in reclaiming the assets.

The law directs UFAA to invest half the unclaimed cash in Treasury bonds, 45 percent in Treasury bills and retain five percent as cash.

UFAA used Sh3.4 billion or a quarter of the income generated to finance its operations and kept Sh9.6 billion in cash despite the cash crunch in government.

‘This implied that the Authority was able to safeguard the unclaimed financial assets received from holders and, at the same time, make returns on investment. A portion of the returns from the investments was used to finance the Authority’s operations,’ said the Auditor-General in a report on UFAA.

UFAA’s reliance on the investment income to fund its operations more than doubled in the five years to Sh761.3 million last year, up from Sh354.6 million in 2019. There was no breakdown on how the UFAA used the amount.

‘The absence of such a policy may pose the risk of the country losing out on public investment opportunities that could uplift the economy,’ said the Auditor-General.

‘For instance, the amount of Sh9.6 billion in the Trust Fund account is a substantial amount to construct and equip a medical facility equivalent to the Kenyatta University Teaching and Referral Hospital, which cost approximately Sh10 billion,’ added the Auditor-General.

UFAA is holding on to the cash at a time the Treasury is battling a cash crunch in the wake of revenue shortfalls and mounting public debt that has cut the appetite for borrowing.

The State has been reluctant to introduce new taxes following the 2024 Gen Z protests that forced the withdrawal of the Finance Bill with Sh345 billion in new levies.

UFAA’s returns rode on the back of double-digit yields from government paper as the Treasury tapped the local debt market to plug budget shortfalls.

Last year, Treasury bonds offered returns as high as 18.5 percent while the average yield on Treasury bills was between 9.89 percent and 16.99 percent.

Government securities offered average returns of 13.64 percent in 2023 and 12.83 percent in 2022, ranking them among the best-performing asset classes at a time when the stock market was facing headwinds and real estate was yet to recover from the effects of Covid-19.

Returns from government securities have since dropped as the State races to cut its borrowing costs in line with the Central Bank of Kenya’s cuts on its benchmark rate.

Treasury bills have dropped to 7.82 percent and bonds to a range of between 12.65 percent to 13.53 percent.

Many Kenyans, said UFAA, remain uninterested in pursuing funds legally belonging to them or their families.

The authority reckons it had received Sh36.09 billion in cash in local and foreign currencies from Sh23.2 billion in 2021.

Billionaire businessmen, former powerful government officials and prominent politicians are in the long list of individuals with shares worth Sh39.4 billion that have been surrendered to the Treasury, up from Sh30 billion in 2021 and Sh16.42 billion in 2017.

The shares surrendered to the authority remained idle as UFAA did not have a mechanism to receive and manage non-cash assets.

UFAA is not allowed under the law to operate a Central Depository and Settlement Corporation (CDSC) account, which is necessary for facilitating the transfer of unclaimed shares.

Surrendered safe boxes that are believed to contain jewelry, title deeds, share certificates and Treasury bills rose to 3,737 units from 1,953 in June. Over 9.87 million unit trusts whose values were not disclosed are also part of the idle assets.

The money is largely held by insurance companies, banks, pension schemes, legal firms, mobile phone money wallets and saccos, among others.

So far, the authority has reunited less than 10 percent of the billions worth of shares and cash with beneficiaries, representing 1.9 percent of the unclaimed assets.

Kenyans have failed to claim Sh3.2 billion lying idle in M-Pesa wallets, with Airtel and Telkom Kenya subscribers having Sh114.3 million and Sh7 million, respectively.

Some of the unclaimed assets are linked to the deceased having kept their wealth secret and the absence of Wills.

The Court of Appeal has temporarily shielded Ecobank Kenya from paying Sh840 million to the estate of former Cabinet Minister Mbiyu Koinange, pending the determination of its appeal against a High Court order.

In a ruling delivered by a three-bench, the appellate court found that Ecobank’s appeal raised arguable legal questions and that forcing immediate payout risked rendering the appeal futile.

The judges emphasised that releasing the funds could lead to their irreversible dissipation among beneficiaries of the estate, complicating recovery if the bank succeeds in overturning the High Court’s decision.

The dispute stems from 2011 withdrawals made from an estate account at Ecobank holding Sh284 million, which the High Court ruled were illegal. The estate is claiming an extra Sh556.6 million in accrued interest, bringing the total amount to excess of Sh840 million.

The High Court had earlier restricted withdrawals without its approval, but the bank disbursed the funds to lawyers representing beneficiaries in the long-running succession case.

In June 2025, the High Court held that the bank breached its fiduciary duty by failing to verify court orders before releasing the money.

The court ordered the bank to refund the full amount plus interest, a decision Ecobank challenged, arguing it was unfairly penalised for relying on instructions from advocates mandated to operate the account.

Its advocate contended that there were procedural flaws, arguing that the High Court adjudicated negligence and fraud claims summarily within succession proceedings, denying the bank a fair trial.

The advocate also stated that previous rulings by two other High Court judges had directed advocates -not the bank- to account for the funds. The money was part of the Sh1.1 billion proceeds from sale of Koinange’s land known as “Close Burn Estate Runda” in 2010.

It was further claimed that the bank was not aware of the court order dated July 26, 2011 to halt and restrict any dealings with the account.

The bank’s further argument was that complying with the June 2025 order would force the lender to dip into depositors’ funds, risking instability.

Since banks rely on depositor funds to do their business, the court agreed and found that abrupt withdrawals of the amount could destabilise operations of Ecobank.

However, the estate’s administrators insisted Ecobank knowingly violated the court orders. They asked for the money at the centre of the dispute to be deposited in a joint account opened by the advocates for the estate pending determination of the appeal.

‘The High Court judge properly directed himself on all issues on record; that any money deposited with the bank was trust money belonging to the estate, as appears in the Account Opening Forms,’ said the lawyer representing the Koinanges.

He added that the bank was aware that the money deposited was pursuant to a court order, and no withdrawals could be done without court sanction irrespective of the signatories of the account.

In addition, no part of the estate could be distributed without a court order.

Led by Koinange’s widow, Eddah Wanjiru Mbiyu, the administrators offered to secure the High Court decree by depositing title deeds of estate properties worth billions, but the court doubted their liquidity, noting ongoing succession disputes.

The appellate bench ruled that Ecobank’s appeal deserved a full hearing, citing arguable grounds such as whether the High Court overstepped by awarding alleged unpleaded reliefs and mixing succession with tort claims.

The judges also found that disbursing the contested money to the beneficiaries would make recovery “a herculean task” if the appeal succeeds.

‘The applicant (bank) is apprehensive, and rightly so in our view, that if the appeal were to succeed, tracing the said sum amongst the beneficiaries would be a herculean task,’ said the court.

‘Considering the interests of the parties in this application, we find that the balance tilts towards the grant of the stay, since no serious prejudice is likely to be occasioned to the respondent (Koinange’s estate) during the pendency of the intended appeal,’ said the judges.

The stay halts enforcement of the High Court’s order until the appeal is heard. Ecobank is expected to file its substantive appeal within timelines set by the court.

Koinange died on September 3, 1981. He served in President Jomo Kenyatta’s cabinet and briefly in President Daniel Moi’s administration.

We all chase high returns, but what about the costs? Investment fees, commissions, and charges can quietly erode your gains. What’s a reasonable cost of investing-and when do the charges start to hurt your portfolio?

Lydia Muriuki, Senior Relationship Manager at Standard Investment Bank (SIB), joins us to pull back the curtain on these costs. She unpacks the different types of investment fees, how they impact your returns, and how to keep them in check.

Make Money, a podcast series, hosted by Kepha Muiruri, from Business Daily Africa unravels ways to be financially savvy. Get practical tips and advice on how to increase your income, build wealth, and achieve financial freedom in Kenya. Whether you’re just starting out or a seasoned investor, we’ve got something for everyone.

Residential property developer Mi Vida Homes plans to raise between Sh15 billion and Sh20 billion from both local and international institutional investors in the first quarter of 2026 in what is earmarked to be Kenya’s first hybrid real estate fund.

A hybrid real estate fund is an investment vehicle that is designed to mobilise capital from investors by combining both an Income and Development Real Estate Investment Trust (Reit).

A Reit is a regulated vehicle that addresses the liquidity risk of real estate by allowing individual investors to pool funds and invest in property that would be otherwise out of reach for them in their individual capacity.

Development Reits focus on financing the acquisition of land, construction and development of properties with the end goal being generation of profit by selling or leasing the complete projects to investors.

Income Reits, on the other hand, allow individual players to invest in already completed and income-generating real estate projects and earn revenue primarily through rental income.

Mi Vida, which had earlier planned issuance of a Sh4 billion Development Reit in 2026, says the change in design and amount of its planned fund is geared toward addressing fast growing market demand for institutionalised real estate development.

The company adds that the just concluded management buyout that has seen the exit of the firm’s founding investor, private equity firm Actis, frees it up to tap into local capital to finance growth.

Mi Vida on October 16 announced its management team had signed an agreement to buy out Actis that had owned the property firm for seven years.

‘Much as it’s a management buyout, Mi Vida remains an institutional developer because it means now we have the capacity and the opportunity to bring onboard other local institutional capital,” Mi Vida CEO Sam Kariuki said.

“Because of the opportunity that we are seeing on the affordable housing side of the market, the plan has always been to raise a fund of some sort. We had planned a Development Reit but now want a hybrid whereby the fund takes on development risk while still holding Income Reit characteristics from a yield perspective.”

In setting up the hybrid real estate fund, Mi Vida will be looking to ride on its credentials having been granted the greenlight by the Capital Markets Authority in 2024 to act as a Reit manager in the market.

The company says the real estate fund will be Kenya shilling denominated and is banking on high double digit returns to woo international investors who would otherwise shy away from local currency exposure in their portfolio.

‘We are already at the early structuring stages of the fund and from the first quarter of 2026 we should be in the market talking to investors which will be local and also potentially international investors,” Mr Kariuki said.

“Even when we will be talking to international investors, they will be required to be comfortable with local currency exposure and as long as the fund yields something in the high teens and early twenties in total return it will meet their hard currency return requirements.”

Mi Vida’s planned hybrid fund will be joining the list of regulated assets that target crowding in more investors into real estate as an asset class. So far, ILAM Fahari I-Reit, Laptrust Imara I-Reit, Acorn I-Reit, and Acorn D-Reit are in the market with majority being listed in the Unquoted Securities Platform of the Nairobi Securities Exchange.

One question we should be asking ourselves as more banks launch their own financial technology or fintech subsidiaries is whether it creates a conflict.

Are the fintechs competitors to banks, or are they partners complementing each other? How are the symbiotic relationships between banks and fintechs being handled?

Yes, these fintechs are crucial because they have allowed digital payments, mobile money, online lending, savings and investment platforms, insurance technology, wealth management (robo-advisers), and even cryptocurrency and blockchain applications, and predict fraud and computer outages.

They are gradually stripping away the inefficiencies of traditional banking systems by using digital tools to lower costs, speed up transactions, and expand access.

In Kenya and Africa at large, this means enabling the unbanked or underbanked population to make payments, access credit, or save through mobile phones.

In an effort to keep up with technology, spur innovation, and tap into fintech’s hypergrowth, banks are now in a race to partner with fintechs.

Some operate as standalone or semi-autonomous fintech subsidiaries under their parent banks, a strategy that enables faster innovation outside legacy banking systems while maintaining regulatory compliance and brand connections.

Others do it differently.

A McKinsey report shows that of the top 100 banks by assets and other digitally advanced banks, four out of five have now partnered with at least one fintech company. That is up from 55 percent just two years ago.

For instance, Equity Group launched its fintech subsidiary, Finserve, about seven years ago. Nigeria’s Stanbic IBTC Holdings, in 2022, started a fintech subsidiary called Zest Payments.

Stanbic Kenya had similar plans, but last year it put its fintech subsidiary on hold just months after receiving regulatory approval. Barclays Plc partnered with Flux Systems to give customers itemised receipts on their smartphones, allowing them to see in detail how they spend their money.

Elsewhere, Bank of Kigali perhaps stands out. It operates a distinct fintech subsidiary. Bank of Kigali does solely commercial banking, while BK TecHouse, founded in 2016, serves as a digital enabler, collaborating directly with the bank to develop fintech products.

Digital adoption is no longer a question but a reality. Around 73 percent of the world’s interactions with banks now take place through digital channels, a McKinsey report notes. Therefore, without embracing technological innovation, banks risk fading into irrelevance.

However, the bank-fintech strategic alliance has to be a cautious one. The banks must remain the mothership, and the fintech the speedboat. In a partnership where this is not well understood, the favour will tilt towards the fintech, and these companies will become a significant threat to banks. Reason? Fintechs grow fast because they move quickly, try new ideas, and run simple operations, processes that can slow down once they face the strict rules of traditional banks.

Banks, by contrast, are known to be the opposite. They remain anchored in slow, rigid structures. Without proper separation, they risk being overtaken, or even swallowed, by the very fintechs they seek to control.

In fact, while partnerships between banks and fintechs have increased over the years, full acquisitions remain rare because, as McKinsey notes, ‘integration often slows decision-making and innovation cycles, undermining fintechs’ competitive advantage.’

Therefore, when a bank acquires a fintech, it must make sure that the same resources it has on the speedboat, which is a fintech, it has similar resources in the mothership, which is a bank.

Bank-fintech collaboration isn’t just a strategy; it is survival. But harmonisation, not dominance, must be the guiding principle.

Perhaps the other conversation we should be having is about neobanks, the digital, branchless units to capture the younger, tech-savvy generation that traditional banks often struggle to reach.