Category: Business Daily

A section of social media platforms has recently witnessed intense public debate about the newly created Small Taxpayers Department of the Kenya Revenue Authority.

A lot of discussions have revolved around a wide range of allegations, including intimidation and unofficial revenue ‘quotas’ by the taxman.

These claims are undeniably serious and deserve scrutiny. Yet they also raise an important question: why would a member of staff take issue with performance targets set to support budgetary needs?

Public officers, especially those working in critical institutions such as the KRA, are well aware that working under pressure is part of the job description.

With a national budget of Sh4.29 trillion and the taxman expected to raise approximately Sh3 trillion, staff must rise to the occasion.

Missing revenue targets is no longer a matter of inconvenience; it places the country at risk of heightened borrowing.

Kenya’s public debt has already surpassed Sh12 trillion, reaching about Sh12.06 trillion by September 2025, equivalent to 67.3 percent of gross domestic product.

This worrying position has been driven by a growing reliance on domestic borrowing alongside maturing external obligations. In such an environment, tax administration is not a casual undertaking; it is a national duty tied directly to economic stability.

Integrity is an inseparable pillar of any tax administration. The Bribery Act 2016 criminalises offering and receiving bribes, placing equal responsibility on all participants in corrupt activities.

If any KRA staff member engages in collecting unofficial revenue from taxpayers, that individual should not only be dismissed but also face the full force of the law. Fortunately, there are systems meant to prevent, detect, and punish such behaviour.

One of its most successful tools is the iWhistle platform, a secure, anonymous reporting system that has strengthened anti-corruption efforts.

Read: Tax reforms must obey taxation principles

Last financial year alone, iWhistle enabled the recovery of Sh6.8 billion from 821 verified cases.

The KRA has consistently collaborated with investigative agencies to prosecute wrongdoers and take action against internal staff implicated in corruption. Only last month, 24 employees were released from duty after corruption-related investigations confirmed misconduct.

Complementing iWhistle are lifestyle audits, the Informer Reward Scheme, which grants whistle-blowers up to Sh5 million, and an Integrity Award Framework that recognises exemplary officers.

These mechanisms raise an important question: why would any staff member choose to engage in collecting unauthorised revenue instead of using the anonymous systems available to protect both themselves and the economy? With these structures in place, many of the online claims circulating appear not only suspicious but inherently unreliable.

Such narratives are far from harmless. If left unchallenged, they can undermine the integrity and independence of Kenya’s tax enforcement processes. Kenyans deserve an effective and efficient tax system that is capable of safeguarding economic progress.

Several reforms are currently underway, targeting the modernisation of technology, sealing revenue leakages, and creating a predictable environment for businesses.

This is bound to rattle some parties who have for years thrived on loopholes for personal gain.

‘If you do what others do, you will get what others get.’

Do better answers, start with different probing questions? How helpful is it to get the right answer to the wrong question?

Why is it that the more companies compete, the more they look the same? If ‘the medium is the message’ is the secret sauce in the method companies use to become strategic and innovative? Can one really sprint to strategic insights, and genuine innovation in days? Think unusual

When companies ask, ‘How can we do it differently from our competitors?’ they generate far more bold, original ideas than when they ask ‘How can we do it better?’ Think of genuinely innovative products – Netflix, Tesla, IKEA, M-Pesa. They weren’t the best. They were different.

Today’s markets in Kenya and East Africa shift faster than traditional drawn out strategy cycles can handle. Organisations that thrive innovate continuously, make bold strategic choices quickly, and experiment intelligently.

More like a neurosurgeon

First step is to make the distinction between a plan and a strategy. And, to realise the days of 5-year plans are dead. Strategy begins with an MRI like diagnosis, both hypothesis driven analytical problem solving, with a dash of ‘out of the box’ creativity.

Second step is to realise that the scrum method originally used in software development, can be applied in a strategy innovation sprint. Using a fun engaging, intensive, high-impact sprint approach can help leaders and teams break out of old thinking patterns, generating workable strategies in days and weeks, not months and years.

Despite the name, a ‘sprint’ is not a sloppy quick fix. Think of it more like a skilled neurosurgeon and team, focusing their efforts over a short time, to repair a life threatening aneurysm.

To develop breakthrough strategic ideas, one has to use cutting-edge tools-platform strategy, rapid experimentation, and systems mapping-to uncover bold, high-value opportunities others miss.

Is it possible to collapse months of strategy work into days, by following a structured sprint workflow where the team moves from ambiguity to clarity, from ideas to actionable strategic priorities in record time?

To succeed requires building an innovation-driven culture with fast learning cycles, problem reframing, and collaborative decision-making.

See the unseen

‘Innovation is seeing what everybody has seen and thinking what nobody has thought,’ said Albert Szent- Györgyi.

Basically, there are three types of innovation, according to Clayton Christensen: cost, sustaining and disruptive. Cost innovations reduce [fixed and variable] expenses, while maintaining or improving on quality, sustaining innovations are all the [normal practice] improvements an organisation makes to stay current, just to be able to compete.

Disruptive innovation is the game changer that can transform a company, industry, or non profit. Christensen’s ‘innovators dilemma’ is that managers in corporates are taught to grow existing product lines and maximise profits.

This leads them to missing disruptive innovations that come from small troublesome start-ups on the unseen periphery, not following the traditional ‘by the book’ corporate ways.

It’s likely their innovations may, for instance, at times not work, focus on a small unprofitable niche, or be costly. But with time, history shows that the disruptors, gradually move up the value chain, gobbling up market share and profitability.

Before you know it, the once tiny disruptors are the market leaders, with the sleepy big corporates, bleeding red ink, wondering what happened.

Following disruptive start-up practices, in the strategy – innovation sprint risk is reduced through rapid validation. Aim is to test assumptions early, avoid costly strategy mistakes, and focus resources on what works.

Rapid immediate testing of what works

‘At its root, a scrum sprint is based on a simple idea: whenever you start a project, why not regularly check in, see if what you’re doing is heading in the right direction, and if it’s actually what people want? And question whether there are any ways to improve how you’re doing what you’re doing, any ways of doing it better and faster, and what might be keeping you from doing that,’ advises Jeff Sutherland, the co-creator of the scrum method.

A scrum like sprint applied to strategy and innovation is based on the way people really work, not on how they think they work. Aim is to take a step by step approach, breaking the work down into short term goals, with a constant assessment of progress, along with an agile adaptive approach to problem solving. Impact in terms of speed and quality can be seen almost immediately.

Yes, planning is useful but blindly following plans is stupid. ‘It’s just so tempting to draw up endless charts. All the work needed to be done on a massive project laid out for everyone to see-but when detailed plans meet reality, they fall apart. Build into your working method the assumption of change, discovery, and new ideas’ says Sutherland.

Inspect and adapt – is key in the sprint. Every little while, stop doing what you’re doing, review what you’ve done, and see if it’s still what you should be doing and if you can do it better.

Change or die

‘Clinging to the old way of doing things, of command and control and rigid predictability, will bring only failure. In the meantime, the competition that is willing to change will leave you in the dust. Fail fast so you can fix early. Corporate culture often puts more weight on forms, procedures, and meetings than on visible value creation that can be inspected at short intervals by users. Work that does not produce real value is madness. Working product in short cycles allows early user feedback and you can immediately eliminate what is obviously wasteful effort,’ writes Sutherland.

Much of traditional strategy work and attempts at innovation are often time consuming and wasteful. Scrum sprint co-creator Sutherland states: ‘When I go into a company, I usually find that about 85 percent of effort is wasted. Only a sixth of any of the work done actually produces something of value. Deep within ourselves, as we repeat the rhythm of our days, we know that’s true.’

The number of cars registered by Kenyans in the first eight months of the year increased by 25 percent compared to last year defying the tough economic times faced by many households.

Official data published by the Kenya National Bureau of Statistics (KNBS) indicates that Kenyans registered 75,059 vehicles in the eight months up from 59,945 in a similar period last year.

Units registered in the period to August this year, are the highest in four years. The surge in overall vehicle registrations suggests resilient domestic demand, improving credit availability, and stronger private-sector confidence.

Dealers in the car market have attributed the rise in vehicle acquisitions to financing arrangements by banks and other financial institutions.

Experts reckon the trend is likely to persist into the final quarter of the year if inflation remains contained and exchange-rate stability continues to support import flows.

According to the official exchange rate by the Central Bank of Kenya, the shilling has remained relatively stable since the year began, exchanging at an average Sh129.3 for a unit of the US dollar.

The local unit rallied strongly to the current levels, from January 2024 lows of Sh163 to the American currency in which most international trade is settled. This means imports of vehicles and other commodities have become cheaper from a currency perspective.

Further analysis revealed that the strongest momentum came from the commercial-transport segment, where trailer registrations jumped 151.2 percent, almost tripling to 2,738 units in the first eight months.

Analysts attribute this spike to growing cross-border cargo volumes and ongoing fleet upgrades by logistics companies positioning for regional trade opportunities under the African Continental Free Trade Area (AfCFTA).

Public service vehicles saw a powerful rebound, with mini-bus registrations rising 45 percent while full-sized buses increased by 25 percent.

Operators have been renewing fleets in anticipation of higher commuter volumes in major cities as economic activity normalises.

Station wagons remained Kenya’s most registered vehicle category and continued their upward trend, growing 22.8 percent to 50,390 units.

The popularity of station wagons mirrors continued preference among households and SMEs for fuel-efficient, multi-purpose vehicles.

The flood tide that is the Christmas season meant travelling upcountry, family gatherings, cooking different meals or cooking meals differently, eating together, and winding down the year in the warmth of family for many Kenyans as they grew up.

These are traditions that for generations, typified Christmas. With every generation taking them up and passing them down further. But those living and working in countries miles away, them that can’t travel home for the holidays, it is a season of longings and nostalgia, fond memories of home elevated by a global-scale celebratory mood, and reinvention.

What does Christmas look like for young Kenyans living abroad and how do they compensate for the distance and warmth of family? Nothing prepared 30-year-old Faith Wambui for her first Christmas away from family. Early 2022, Faith left Kenya for Melbourne Australia seeking space to breathe, to grow, to think freely.

‘I remember waking up and realising everyone had somewhere to go except me,’ she says. ‘People who had been here longer had families. I didn’t. I felt so lonely and so quiet inside. I missed moments I took for granted at home.’

In Kenya, Christmas for Faith had always been a simple: go to church with her mother, go back home to prepare special food and enjoy the laughter of cousins. It was a sense of belonging she didn’t need to negotiate.

In Australia, the festive season and more specifically Christmas Day, came with its many variations. Unlike what she’d been accustomed to, Melbourne does not sleep because it is Christmas.

‘In healthcare for example, people pick up extra shifts, it is a season to make extra money. Many friends work during this season and plans however tentative, don’t materialise because people are busy and with no sense of urgency when it comes to the commemoration of the day. You sit there wondering whether you chose the right life. You question if your family misses you the way you miss them.’

This has forced Wambui to adapt over the years through building her own community-a ‘family’ of fellow migrants who gather when schedules allow, sometimes not even on Christmas Day itself.

‘I learned that Christmas isn’t about the date or even the decorations that comes with it. It’s about the people around you. Here we celebrate when everyone is free-maybe on the 27th, maybe in January. And that’s okay.’

Even with this compensation, there is a sense of loss that she carries on her shoulders heavily.

‘You can’t replicate Kenyan chapatis here. And I miss the noise-the talking, the laughter. Here, you’re celebrating with people you’ve known for a few years. There are things you can’t talk about the same way.’

This sense of loss is aggravated by time difference between Kenya and Australia which is 8 hours ahead. This means she starts celebrating Christmas earlier and by the time it is Christmas in Nairobi, she is too tired to be awake.

‘Sometimes I wait for Kenya to reach the 25th to send messages, then I sleep and forget. ‘It makes me feel the distance in my bones. My daughter is the most affected. Many times when I wake up the next day and it is no longer Christmas Day for me, it feels weird to say Merry Christmas.’

Faith’s way of reclaiming the warmth, food and noise that lives in the season back at home is in reinventing and recreating ‘home’ moments in her house and around her.

‘I cook Kenyan food or if we are meeting with the Melbourne family, we do it at scale, we listen to music that reminds us of home, dress like we would at home-anything that says, ‘this is our new home away from home.”

Thousands of kilometres away in Japan, 25-year-old Upendo Nice Baraza lives in a completely different reality even though the emotion remains the same.

The English literature teacher moved in March 2024, landing in a country where Christmas is more of a commercial spectacle than a religious or social holiday.

‘Japan doesn’t recognise Christmas the way we do. People work, shops open and meetings happen. It’s business as usual and this was quite a shocker for me,’ says Upendo.

Growing up, Christmas for Upendo was a cluster of village trips, Salvation Army church presentations, singing competitions, and cousins running around in new clothes.

Even as these traditions faded much later, Christmas still meant family-even if it was at home planting vegetables or sharing meals. The mood for the season has always been for Upendo, family centered. Living in Japan has disrupted all she thought Christmas represented.

Her first Christmas forced her into a question she had never asked herself: What does Christmas mean when your environment does not acknowledge it? ‘I walked outside for 30 minutes and didn’t see a single person. No music, no noise, no family preparing food. I kept asking myself-is it really Christmas?’

All was not lost as the country has its own odd charms. ‘KFC is the Christmas meal. People queue for hours.’

As a diasporan, she feels the absence of family more acutely-even though her family in Kenya no longer celebrates Christmas as consistently as before.

‘The distance makes you reach out more,’ she says. ‘It makes you imagine you’re missing something-even when you aren’t.’

Like Wambui, Upendo’s longing makes her seek out a community. ‘Now I host friends who are African or Kenyan. We try to recreate a Kenyan Christmas-food, laughter, familiarity. It’s not the same, but it’s ours.’

What she misses the most? ‘The weather. The warmth. The aroma of chapati frying in every homestead. A whole season of celebration. The shows, the music, the chaos. Christmas here is cold and quiet. If you’re not careful, the day will pass without you noticing.’

For these Kenyans living in the diaspora Christmas is a deliberate act not just an inherited rhythm of culture. You choose your family. You create your traditions. You build what you miss and make do with what is available. You treasure time and spend it wisely. And sometimes-like Wambui and Upendo-you spend the day simply wondering whether it is Christmas at all.

For Benjamin Ogutu, who grew up in Nairobi, Christmas was always predictable in the best way. The 29-year-old multimedia technician loved reconnecting with family and the long hours of road travel to the countryside to meet relatives. ‘ As early as November every year, I’d be getting ready to usher in the festivities whose step-by-step process I could easily predict.’

He left Kenya in 2023 and now works in London. The way he observes the holidays today is vastly different from what the season meant to him for most of his life. ‘Nothing prepares you for your first Christmas abroad. You suddenly realise how much of your holiday identity was tied to place and family.’

The first shock was the weather. In Kenya, December is typically hot and vibrant. London, on the other hand, is the complete opposite. ‘The season here is very cold, it gets dark early, and everyone seems to retreat quietly to their spaces.’ Although the London streets are heavily decorated, he still feels something is missing. ‘The energy here feels a little more contained-maybe even private. In Kenya, Christmas is a season. In London, it’s just a day.’

The distance from family amplifies everything. ‘I didn’t realise until I relocated that just having people around was such a privilege. When I became an adult, I thought children running around the compound-making noise, doing what kids do-was a disturbance. How I’d wish for such moments right now!’

To cope, he has begun building his own traditions while maintaining what he can from home. ‘Nyama choma takes the crown. Though I must add-nyama choma is only good if you taste it in Kenya. There’s just something, I don’t know what it is, but I think home makes food taste better.’ He spends part of his Christmas break preparing the dishes he grew up with. ‘Sometimes we share with other Kenyans living here. It brings back some of the fond memories we have from home.’

He has also become more intentional about building and being part of a community. ‘Your friends-the people you work with-become your family here. We make deliberate plans to meet and catch up. Unlike home, it’s not guaranteed that because we’re approaching the end of the year, I’ll naturally meet people. Here, we make plans, share food, stories, and memories more deliberately. Everyone brings a piece of their childhood Christmas to the table.’ These gatherings recreate the sense of belonging he accessed so effortlessly in Kenya.

The worst thing one can do, he says, is spend the holiday alone. ‘Loneliness becomes more intense during the season. But when you sit in a room full of people who also miss home, you feel seen.’

Two Christmases abroad have allowed him to make peace with the evolution of the holiday. ‘I’ve realised Christmas won’t look the same every year-and that’s okay. I’ve also accepted that home is no longer one place. It’s a mix of where I came from and where I am right now.’

Until London, he never fully appreciated the chaos of Christmas in Kenya-the noise, the movement, the family congestion. Now, he misses it deeply. ‘Those things define the season. Watching and being part of the ‘great urban-rural migration’ is one of the things I miss the most.’

When social enterprises first gained prominence, they were rarely associated with job creation or viewed as tools for reducing poverty in Africa. As a result, the region continued to depend heavily on international charity and donor aid.

The Sisters Blended Value Project (SBVP) at Strathmore University is helping shift this paradigm. By working directly with communities across Africa and equipping women-particularly Catholic Sisters-with enterprise development skills, SBVP is providing the tools needed to transform charitable ministries into sustainable businesses. Participants learn how to design, launch, and scale social enterprises that address community needs while reducing poverty.

This support has enabled many religious congregations to transition from one-off, grant-funded initiatives to social enterprises with long-term impact. The ripple effects have been significant. Communities that once relied on the Church solely for aid are beginning to experience genuine market participation. Through its training and coaching programmes across East and Central Africa, SBVP is deliberately breaking the cycle of dependency by equipping Sisters with practical business capabilities. The results are visible. Catholic Sisters increasingly see social enterprise as a pathway to drive structural change and promote economic independence. With strengthened leadership and entrepreneurship skills, they are shifting from passive recipients of aid to active agents of sustainable development. Many are now turning their ministries into models of self-reliance, creating jobs and improving livelihoods. As these enterprises mature, they bring improved access to income, skills, education, food security, and dignity within the communities they serve.

A clear example comes from Murang’a County in Kenya, where the Emmanuel Sisters run a skills centre supporting single mothers and young women. A broiler poultry enterprise in Maragua finances the centre, with part of its profits funding scholarships for vulnerable learners. The centre offers training in tailoring, baking, hairdressing, beadwork, and digital literacy. Upon completion, graduates receive tailored support to start or expand their own ventures-many are now earning sustainable incomes through the skills acquired.

A similar model is taking shape in Uganda, where the Consolers of the Sacred Heart of Jesus are using their coffee enterprise to connect women and youth to reliable markets and stable incomes. Building on their longstanding embroidery and dressmaking work, the sisters-now strengthened through SBVP’s enterprise development training-are diversifying livelihoods in Rwengiri and contributing to the local economy through agriculture-driven social enterprise.

In Zambia, the Religious Sisters of the Holy Spirit (RSHS) have applied SBVP training in leadership, financial planning, and enterprise management to revitalise the James Corboy School. Their strengthened operational capacity has stabilised the institution and kept it accessible to girls, protecting them from vulnerabilities linked to poverty and long travel distances.

In Tanzania, the Missionary Sisters of the Precious Blood have transformed St Thomas Kilakala Health Centre. Previously constrained by weak infrastructure and limited management capacity, the facility now operates upgraded wards, a functional theatre, strategic partnerships, and a sustainable business model. These improvements have increased patient numbers and enhanced the quality of care for the surrounding community.

These cases represent only a fraction of the transformation under way. Over the past three years, SBVP has reached 690 Sisters from 147 congregations in Kenya, Uganda, Tanzania, and Zambia. Sixty-one congregations have also received seed grants to strengthen their social enterprises and secure long-term viability.

Yet challenges remain substantial. The United Nations estimates that in 2025, 808 million people-one in ten globally-will still live in extreme poverty. By 2030, nearly nine percent of the world’s population is projected to remain below the poverty line. Against this backdrop, the entrepreneurial ministries emerging among Catholic Sisters in Eastern and Central Africa stand out as a beacon of innovation and resilience. They are redefining religious life by actively contributing to local economies, generating employment, and promoting food security.

SBVP has catalysed a profound shift. Catholic Sisters are moving beyond traditional charitable approaches to become architects of community-owned, enterprise-driven development. Their efforts demonstrate that ending poverty requires creativity, courage, and locally grounded innovation. By blending faith with entrepreneurship, they are lighting a path toward a more resilient and prosperous Africa-transforming lives, one community at a time. Dr. Angela Ndunge and Alex Okoth

Fatma happily managed a small fresh juice kiosk near the Likoni ferry in Mombasa. She managed her two assistants who blended coconut, mango, and passion for long queues of commuters. She marketed sales during busy evenings while encouraging her team to treat customers with warmth and precision to set the business apart from the others.

Her stand attracted a loyal following. However, she noticed a pattern that really unsettled her whenever she tried to expand into a second location. Her requests for permits lingered in offices while other traders with familiar personal ties to decision makers advanced much faster.

Further, her assistants whispered about how certain competitor businesses gained favourable access to microfinance funding, strategic land positions, or procurement slots even when their products lacked distinction. Fatma tried to ignore the pattern and focus on the quality of her business.

But she watched new business entrants leap ahead of her without deeper competence or stronger customer appeal. She became increasingly frustrated because her business merit played a smaller role in her entrepreneurial growth than she expected from the onset, and unseen relationships dictated outcomes far more than open competition or capability.

A new global study by Sohrab Soleimanof, Tyge Payne, Curt Moore, and Matthew Rutherford released this week that is gaining a lot of academic attention sheds a unique light on what Fatma faces here in Kenya.

The researchers gathered a large multi-year dataset across nearly 100 countries and uncovered a consistent yet unsurprising pattern.

Cronyism dampens productive entrepreneurship by steering talented entrepreneurs away from innovative ideas and toward safer activities that require little creativity.

Individual entrepreneurs reduce risk-taking when external political influence networks overshadow merit, and new business ventures focus on survival rather and navigating political connections to survive rather than transform with innovation.

The study sadly finds that such cronyism environments encourage unproductive forms of enterprise that drain value through rent seeking and manipulation instead of through genuine contribution to society at large.

The research further reports that cronyism affects productive and unproductive entrepreneurship differently from what many expect.

Higher levels of cronyism act to suppress productive business ventures but at the same time fuels unproductive ones by channeling business effort into networking where an entrepreneur’s connections unlock unfair advantage.

The researchers warn that across all the nations studied that societies that tolerate such cronyism patterns ultimately lose promising innovators who drop out of business altogether because they sense unfairness in that hard work and creativity cannot overcome entrenched favour and bias networks.

Human beings crave fairness. So, talented individuals shift away from ideas that demand bold investment because they believe privileged political-related actors will absorb benefits of doing business regardless of skill or competency. The entrepreneurs fear that their investment, creativity, and time will not be fairly compensated.

One aspect of the study was actually surprising that concerns the rule of law. Citizens often expect strong legal frameworks to correct for the realities of unfairness.

However, the findings indicate a much more complicated picture. The stronger the rule of law in a country, then it actually magnifies the negative connection between cronyism and productive entrepreneurship.

When formal institutions like courts, counties, parastatals, etc. promise fairness but in reality, the informal networks still completely dominate opportunities, then the entrepreneurial disappointment actually intensifies.

Innovators retreat much faster because of the gap between expectations versus one’s lived experience widens and makes the credibility of the whole system erode.

Notice above that Fatma felt the same emotional drop that is described in the research findings. She admired Kenya’s strong legal frameworks, yet she still confronted barriers created by influence rather than the performance of her business.

Our Kenyan counties and national leaders can draw actionable lessons that originate from the global patterns uncovered in the study. Strong systems reward capability rather than connection.

Therefore, the systems can unlock productive venture creation, encourage broader participation, and cultivate confidence in formal institutions.

Leaders at all levels who champion transparent licensing, open procurement, predictable access to financing, and impartial enforcement can strengthen trust in the business community all while expanding the number of business startups who push the economy forward towards creativity rather than copycat culture.

In the end, communities prosper when authority reinforces fairness while removing the hidden incentives that push Kenyan entrepreneurs toward unproductive pathways.

Societies advance when they reduce reliance on quiet favour networks and instead strengthen institutions that reward genuine effort and innovation.

At home in Kenya, we hold immense entrepreneurial talent. Fair opportunity can unleash far greater value than any private relationship ever could.

Banks have chosen different benchmarks to price loans under the new risk based pricing formula, denying customers a uniform reference rate to assess the cost of borrowing.

The Central Bank of Kenya has noted that nearly half of the 37 lenders have opted for the Central Bank Rate (CBR) as their key reference rate with only a minority adopting Kesonia as their benchmark.

The final revised risk-based credit pricing model was to be anchored on the Kenya Shilling Overnight Interbank Average (Kesonia) which is the overnight lending rate among banks as rate as CBK pushed to strengthen the transmission of its monetary policy decisions.

The regulator however left the window for banks to use the CBR as a backup benchmark rate where Kesonia was deemed as impractical.

The use of different benchmark rates means that customers will not be able to directly compare borrowing costs between banks as each lender uses one of the two allowable reference rates of both.

The total lending rate for a customer tally adds the chosen benchmark to each borrower’s risk premium denoted as K alongside additional fees and charges.

‘About 48 percent of banks have used the CBR while another 34 percent are using both the CBR and KESONIA while the remainder are banks who have chosen to use KESONIA alone,’ CBK Governor Dr. Kamau Thugge said on Wednesday.

‘All commercial banks have submitted their risk-based pricing formulas which they will be implementing and we expect this to be a transparent process.’

Commercial banks began applying the new pricing formulas on all new variable rate loans starting on December 1, 2025, while changes on existing variable loans are expected to take place from February 28, 2026.

Banks are required to publish the costs on their websites and on the Total Cost of Credit website including their weighted average lending rates, weighted average premium (K), and fees and charges for each of their lending products.

Most banks have fallen back on the CBR despite successfully fighting the apex bank over an earlier proposal to use the benchmark as the base for the revised loan pricing models.

Banks argued that adopting CBR was equivalent to the re-introduction of interest rate caps, stating that the benchmark rate of the apex bank is not market driven.

Earlier this month, banks including KCB, Equity, Absa, NCBA and DTB issued notices that they would be using the CBR as their reference rate.

‘By rejecting the interbank rate as a preferred unified base rate and proposing the CBR, the CBK will not operationalize the policy decision after setting the CBR,’ Raimond Molenje, the chief executive officer of the Kenya Bankers Association (KBA) argued in a memo to CBK previously.

Sources in banks previously deemed Kesonia as too volatile, indicating that it would mean reviewing lending rates regularly with revisions requiring authorization from CBK and communication to customers.

KBA noted that the application of CBR allows member banks to learn and accommodate system upgrades required before Kesonia use.

Previously, each commercial bank had its own approved benchmark from which to price loans, an aspect that created chaos in tracking the pricing of loans as the industry had an approximate 37 reference rates.

Banks argued that the different reference rates made it difficult for the lenders to lower borrowing costs as an industry resulting in rebuke from CBK which demanded interest rate cuts to reflect the ease in monetary policy or a lower CBR.

CBK expects a closer comparison of interest rates across banks as both KESONIA and CBR are tied at the hip following the establishment of an interest rate corridor around the apex bank’s benchmark.

KESONIA can only rise by 0.75 percentage points above the prevailing CBR rate and must not fall below the benchmark by more than 0.75 percentage points.

The corridor implies that KESONIA and CBR would only differ slightly.

‘There is convergence between KESONIA and CBR, and in that sense, it does make it easier for banks to use either benchmark because essentially, both rates are the same,’ Thugge added.

CBK has insisted that it does not desire to control bank interest rates but seeks to have commercial banks borrowing costs mirror the CBR.

CBR cuts dictate that banks interest rates should generally move lower while a higher benchmark rate signals costlier loans.

On Tuesday, CBK cut its benchmark rate as its ninth straight monetary policy committee meeting, bringing the CBR to nine percent from 9.25 percent in October with the view of augmenting similar policy actions aimed at stimulating lending by banks to the private sector and supporting economic activity.

Private sector credit growth hit a 19-month high in November mirroring recovery in lending on falling borrowing costs.

‘Growth in commercial banks’ lending to the private sector continued to improve and stood at 6.3 percent in November 2025 compared to 5.9 percent in October and a contraction of 2.9 percent in January,’ CBK said in a statement on Tuesday.

‘This mainly reflects improved demand for credit in line with the declining lending interest rates.’

Average commercial banks’ lending rates declined to 14.9 percent in November 2025 from 15 percent in October and 17.2 percent in November 2024.

Saccos regulator has sounded the alarm over hacking threats to cooperatives and members’ accounts during the three coming long weekends and Christmas holidays amid a surge in mobile banking heists.

The Sacco Societies Regulatory Authority (Sasra) has warned that cybercriminals have developed a pattern of striking when savings and credit cooperatives (saccos) operate with minimal staff presence, exposing digital banking systems to a higher risk of theft.

Cyber thieves are increasingly using malware to steal banking credentials from unsuspecting consumers when they log on to their bank accounts via their mobile phones. In a security circular issued on Monday, Sasra acting CEO David Sandagi said fresh intelligence shows a majority of breaches occur during the late evening and early night hours of a long weekend or holiday.

The regulator warned saccos that the three upcoming long weekends and holiday windows-Jamhuri Day (December 12-14), Christmas (December 25-28) and New Year (January 1-3)-pose heightened danger.

“Periodic analysis and intelligence monitoring of the trends of cyber-threats and security breaches in the regulated sacco subsector shows that a majority of the cybersecurity breaches and attacks mostly occur during the long-week end public holidays,” said Mr Sandagi in the circular seen by the Business Daily.

“The trends equally show that these breaches and attacks are predominantly perpetrated during the last 12 hours before the commencement of the long-weekend public holidays and during the late evening and early night hours of any of the long-weekends and/or the public holidays.”

Sasra noted that digital channels, notably mobile banking, are the most targeted entry points for fraudsters.

Mr Sandagi said saccos using ATMs, mobile money platforms, web-based applications and internet banking services face elevated risks, especially during off-peak periods when cyber attackers exploit slower response times and relaxed oversight.

Cybercriminals are riding on mobile phones to hack into consumer bank accounts with malware-a software designed to gain unauthorised access to a computer system.

The malware typically gets onto a phone when a user clicks on a text message from an unknown source or taps an advertisement on a website. Once installed, it often lies dormant until the user opens a banking app.

The malware then creates a customised overlay on the authentic banking app. This allows criminals to follow a user’s movements on the phone and eventually grab credentials for the account.

This type of mobile phone malware is gaining ground as more consumers use banking apps and financial firms are rolling out a wider array of mobile services.

Half of thefts were through mobile banking, with cyber thieves stealing Sh810.68 million last year from Sh182.41 million in 2023, a jump of 344 percent.

The saccos regulator has now directed cooperatives to “heighten, intensify and strengthen” round-the-clock monitoring of their management information systems, digital banking services, and all ICT infrastructure that supports member transactions.

In addition to external threats, Sasra has warned of rising insider risks and directed saccos to tighten internal controls to prevent employees from colluding with outsiders to defraud institutions.

Mr Sandagi has asked saccos to pay attention to activities involving digital access to Front Office Service Activity (Fosa) accounts and requests to link members’ accounts with their mobile numbers.

Saccos have also been directed to focus on linkages between mobile numbers and mobile money wallets or settlement accounts, as well as unusual transfers flowing in from third-party financial institutions into sacco pay bill or mobile wallet accounts.

Mr Sandagi has directed saccos and their third-party vendors to deploy round-the-clock cybersecurity monitoring tools and ensure technical teams are on standby to identify and respond to intrusions in real time.

The 2022 Sasra report revealed that the Sacco Societies Fraud Investigations Unit, which investigates fraud in the sacco sector, handled cases involving Sh232.5 million in the past two years.

Of this amount, Sh118.1 million was stolen, while Sh114.4 million was at risk of being lost.

The report indicated that most of the fraud occurred through collusion between staff and outsiders who exploited weaknesses in mobile and internet banking services.

“The internal technical staff working within saccos’ ICT and credit departments have been noted to be the greatest collaborators in perpetuation of fraudulent activities, and thus Saccos are called upon to constantly review the adequacy of the internal controls in their ICT and credit functions,” said Sasra in the 2022 report.

In 2021, the financial sector stability report disclosed that saccos had lost Sh106 million in 17 months to March 2021 on the back of increased use of digital channels.

The 2021 report asked saccos to tighten their IT security, review contracts with third parties and even consider tapping cyber security insurance.

Higher imports of intermediate and capital goods widened Kenya’s current account deficit to 2.2 percent of gross domestic product (GDP) in the year to October 2025 up from 1.5 percent in the preceding similar period last year.

The deficit widened despite the country recording higher export earnings from horticulture, coffee, manufactured goods, and apparel during the year under review.

During the period, imports grew 9.6 percent on rising intermediate and capital goods orders, while exports increased 6.7 percent, creating an imbalance that expanded the deficit during the twelve-month cycle.

‘The current account deficit stood at 2.2 percent of GDP in the 12 months to October 2025 compared to 1.5 percent of GDP in a similar period in 2024, mainly reflecting higher imports of intermediate and capital goods,’ said CBK Governor Kamau Thugge on Tuesday.

‘Goods exported increased by 6.7 percent, driven by horticulture, coffee, manufactured goods, and apparel. Goods imports rose by 9.6 percent, reflecting increases in intermediate and capital goods imports.’

The current account captures transactions on goods, services, remittances, and income flows, making it a critical measure of Kenya’s external position and the sustainability of its trade dynamics.

A deficit arises when outflows exceed inflows, meaning the economy requires external funding to maintain stability, especially when import growth consistently outpaces performance across export-oriented sectors.

Kenya’s goods trade deficit remains the largest contributor to the current account gap, driven largely by reliance on imported industrial inputs, capital equipment and consumer goods.

The CBK noted that during the review period, services receipts increased 4.8 percent supported by stronger travel inflows, while diaspora remittances rose 5.8 percent, slightly helping cushion the widening goods trade gap.

The apex bank projects the current account deficit will remain stable at 2.3 percent of GDP in the 2025 calendar year, as well as in 2026, supported by financial inflows that will fully finance the gap.

These inflows are expected to generate an overall balance of payments (BOP) surplus of $1.9 billion (Sh245.6 billion) in 2025, providing additional support for external buffers and macroeconomic stability ahead.

The surplus is, however, projected to ease to $681 million (Sh88 billion) in 2026 as financing patterns shift, though external flows should continue fully covering the current account deficit levels.

CBK foreign exchange reserves currently stand at $12.1 billion (Sh1.6 trillion), equivalent to 5.25 months of import cover, providing a substantial buffer against short-term domestic and external shocks facing markets.

The CBK expects external conditions to remain broadly supportive despite uncertainties, noting that stable commodity prices and resilient service exports should help moderate pressures on the current account ahead.

Financial account inflows, including portfolio investments and concessional financing, are expected to remain sufficient to fully offset the current account deficit, underpinning the positive outlook for balance payments.

The CBK said favourable inflows will also help rebuild foreign exchange buffers, strengthening resilience against shocks linked to global financial tightening, commodity price swings, and unpredictable geopolitical developments.

The Kenya National Highways Authority (KeNHA) and the National Land Commission (NLC) have been ordered to compensate two Mombasa-based businessmen for whole or portions of their land as required for the expansion of the Mombasa-Nairobi highway.

The Environment and Land Court (ELC) in Malindi directed KeNHA and NLC to pay industrialist Ashok Doshi and trader Mohamed Jaffer full compensation for the whole or portions of land situated in Mariakani, Kilifi County, within 60 days.

It also issued a declaration that the petitioners are the lawful and valid owners of the land they are to be compensated on (LR No. 17439), but declined to issue a definitive declaration of ownership on another parcel of land (LR No. 16142).

Doshi and Jaffer sued the KeNHA and China Communication Construction Company Ltd, accusing them of demolishing a portion of a perimeter wall around their parcels of land in Mariakani next to the Nairobi-Mombasa highway.

The ELC noted that it was undisputed that the KeNHA and the construction company entered the parcels of land, demolished the perimeter wall, and started construction without initiating the mandatory acquisition process under the Land Act.

‘There was no notice of intent to acquire, no inquiry, no participation by the petitioners, no valuation, no award, and no compensation, at the very least, no such evidence was presented before this court,’ ruled the ELC in its November 26 decision.

NLC said that in carrying out its mandate, it conducted a review of grants and dispositions in Kilifi, Mombasa, and Kwale counties and arrived at a determination and published its recommendations in a Gazette Notice.

NLC told the court that petitioners were aware of the cancellation of their titles concerning the parcels of land and that the orders sought were moot.

Doshi and Jaffer had argued that the parcels of land were private and did not belong to the respondents or the government of Kenya.

‘KeNHA and China Communication Construction Company Ltd have no right to forcefully enter the properties, demolish the boundary wall and undertake construction works thereon,’ part of the petition stated.

The petitioners were seeking a declaration that they are legal and valid owners of the parcels of land and that the respondents breached and violated their Constitutional rights.

They also wanted an order issued to compel KeNHA and NLC to pay just and full compensation for the whole or portion of the parcels of land as they may require to undertake the expansion of the highway, which should be paid within 60 days of the order.

The two businessmen claimed that on or about October 22 last year, their security officers on the properties informed them that officers of KeNHA regional offices were on land, took measurements, and ordered the boundary wall demolished to pave the way for the road expansion.

Messrs Doshi and Jaffer said that through a law firm, they wrote a letter to KeNHA and demanded that it cease from the intended demolition of the boundary wall.

‘The first respondent retreated and did not take any steps until on or about January 10, when KeNHA and China Communication Construction Company Ltd, through their officers, descended on the land and demolished the portion of the perimeter wall,’ the petition stated in part.

They further said that they engaged KeNHA to have the boundary wall reconstructed and restored to its original position, but all requests and efforts fell on deaf ears.

According to the petitioners, Kenha and China Communication Construction Company Ltd’s actions amounted to compulsory acquisition of their properties without paying compensation and following the laid down procedure in law.