Category: Business Daily

The value of loans tapped from Kenyan banks for which borrowers have not serviced for at least three months fell by Sh40.1 billion in the year to June 2026 amid a decline in borrowing rates that have eased pressure on customers.

Central Bank of Kenya (CBK) data shows gross non-performing loans (NPLs) fell to Sh688.2 billion by the end of June from Sh728.5 billion a year earlier even as the banking sector expanded lending.

Gross loans increased by Sh498.2 billion or 12 percent to Sh4.65 trillion from Sh4.15 trillion over the period, pointing to an improvement in asset quality as lenders grew their loan books.

The decline in bad loans came as CBK eased its monetary policy stance, cutting the Central Bank Rate (CBR) to 8.75 percent at the end of June, from 10.75 percent a year earlier. The rate was last reduced in December 2025 from 9.25 percent to 8.75 percent and has remained at that level to date.

Lenders say the lower policy rate has gradually reduced borrowing costs, offering relief to households and businesses servicing loans and easing repayment pressure. CBK data shows average lending rates fell to 14.37 percent in June, compared with 15.28 in the same period last year.

The sector’s improvement in asset quality coincided with improved profitability across the banking sector. CBK data shows banks’ cumulative profit before tax rose 16.4 percent to Sh172.4 billion in the six months to June 2026, up from Sh148.1 billion in the same period last year.

The latest figure represents the fastest growth in half-year net profit performance in four years. It is dwarfed by a 24.1 percent rise in pre-tax earnings to Sh119.7 million that the sector posted in six months ended June 2022 on recovery from the dip posted in the previous period due to Covid-19 pandemic disruptions.

The reduction in the stock of non-performing loans was more pronounced among large banks, with KCB Bank Kenya and Equity Bank Kenya on top. This came in the period the two banks stepped up recoveries especially from large corporates.

‘NPL improved as targeted resolution initiatives, including recoveries, rehabilitations, full and final settlements, government engagements on associated entities, and strategic write-offs, delivered positive outcomes,’ said KCB.

Data on the 11 Nairobi Securities Exchange (NSE)-listed banks, which includes all the nine lenders classified as large, showed combined gross NPLs from Kenyan banking operations fell by Sh51.56 billion, or 8.8 percent, to Sh534.18 billion in June this year from Sh585.74 billion a year earlier.

The larger decline among the listed lenders compared with the Sh40.1 billion sector-wide reduction suggests the figure was offset by increases in defaults among some medium and small-sized lenders during the review period.

Kenya’s pesticide use has reached a record high, highlighting the country’s growing dependence on chemical crop protection even as health and environmental risks rise.

Data from the Food and Agriculture Organisation (FAO) shows pesticide use in Kenya increased to 6,953 tonnes in 2024, up from 444 tonnes in 1990.

This places Kenya ninth in Africa for pesticide use and second in the region, behind Uganda’s 11,293 tonnes.

Fungicides and bactericides accounted for the largest share at 3,133 tonnes, followed by herbicides at 2,476 tonnes and insecticides at 1,335 tonnes. Rodenticides made up only nine tonnes.

The figures underscore the central role pesticides play in protecting crops from pests, weeds and diseases. For farmers, chemicals remain essential to prevent losses and maintain yields. But the huge use comes with pressures such as surging illegal import markets and hazardous chemicals.

A recent report by Route to Food Initiative (RTFI), a programme of the Heinrich Böll Foundation, showed that more than two-thirds of Kenya’s pesticides were classified as highly hazardous pesticides (HHPs).

According to FAO, HHPs are a class of pesticides acknowledged to present high levels of acute or chronic hazards to human health and the environment.

‘Maize, wheat, coffee, potatoes, and tomatoes in Kenya require the largest volumes of pesticides, with a heavy reliance on HHPs,’ the Route to Food report notes.

According to the report, maize, a staple food for most Kenyan households, relies on 40 different active ingredients for pest, disease, and weed control, with 83 percent of the pesticide volume categorised as HHPs.

In 2020, the National Assembly Committee on Health highlighted the complex problems that emerged due to increased exposure to agrochemicals.

The Committee’s report, in response to a public petition, was a political statement about the serious public health concerns and environmental consequences of pesticides and their misuse.

This is a key issue in Africa, where many countries hold stockpiles of obsolete or highly hazardous pesticides that remain a risk long after use has ended.

The costs of relying on pesticides extend beyond the direct expenses farmers incur for chemicals.

Long-term pesticide exposure has been linked to a range of health concerns. In the Caribbean, high rates of prostate cancer and multiple myeloma have been reported, with prolonged pesticide exposure identified as a contributing factor.

Environmental costs are significant. Weed killers can contaminate rivers and coastal waters, harming fish and damaging sensitive ecosystems such as coral reefs. Discarded pesticide containers also pose risks to livestock and wildlife.

The persistence of some pesticides highlights the scale of the challenge. In Guadeloupe and Martinique, contamination from the insecticide chlordecone remains decades after its use was banned.

To reduce the use of HHPs, the report recommends implementing integrated pest management strategies such as biological controls, crop rotation and reduced reliance on synthetic pesticides.

Also, promote access to knowledge and information to support informed decisions about sustainable agricultural practices, including pest and disease management.

Lastly, support research efforts to develop and promote biopesticides and biocontrol methods as alternatives to highly toxic pesticides.

Periods of economic uncertainty test businesses in different ways. Rising costs, shifting consumer priorities and changing market conditions can quickly expose weaknesses in a company’s strategy. While some businesses respond by cutting prices or reducing investment, others focus on delivering consistent value through products and services that meet customer needs.

Resilient businesses are rarely built on short-term trends alone. Instead, they succeed by understanding their customers, maintaining operational flexibility and creating products that remain relevant even as economic conditions change. Regardless of industry, organizations that continue to solve real problems are often better positioned to weather uncertainty and sustain long-term growth.

Understand what customers truly value

Consumer behavior often changes during periods of economic pressure. Purchases become more deliberate and a customer is more likely to evaluate whether a product or service offers genuine value before they make a decision. This has encouraged many businesses to focus on quality, practicality and customer experience rather than competing solely on price.

Many of the world’s most successful companies have grown by being able to identify a specific customer need and address it effectively. Mobile payment platforms have simplified financial transactions for millions of people, while digital communication tools have made it easier for individuals and businesses to stay connected. Rather than trying to satisfy every possible demand, these products succeeded because they solved a clear problem.

Businesses that invest time in understanding customer behavior are also better equipped to respond when market conditions shift. Monitoring purchasing patterns, gathering feedback and analyzing changing preferences can help organizations identify where demand is growing and where adjustments might be needed before small challenges become larger problems.

For businesses operating in competitive markets, regularly reviewing customer feedback and monitoring changing expectations can help ensure that products continue to deliver value as economic conditions evolve.

Simplicity often creates stronger products

Businesses sometimes assume that adding more features automatically creates a better product. In reality, simplicity often improves the customer experience. Products that are intuitive and easy to use reduce barriers to adoption, making them accessible to a wider audience while encouraging repeat engagement.

This principle can be seen across a wide range of industries, from technology platforms with straightforward interfaces to digital services that minimize unnecessary steps for users. Customers generally appreciate products that help them achieve their goals efficiently without requiring extensive learning or complicated processes.

The same thinking extends to digital entertainment. Products that are easy to understand often appeal to users looking for accessible experiences, regardless of their familiarity with a particular platform. For example, Aviator has attracted attention through its straightforward gameplay mechanics, showing how simple a product concept can resonate with a broader audience.

Keep improving without losing your core value

Building resilience doesn’t mean standing still. Consumer expectations continue to evolve, and businesses must adapt without losing sight of the value that made their products successful in the first place.

Continuous improvement might involve refining user experiences, investing in digital infrastructure or introducing new features that genuinely enhance the product rather than adding unnecessary complexity. Businesses that make incremental improvements based on customer feedback often strengthen loyalty while remaining competitive in changing markets.

This approach also helps businesses manage risk. Rather than investing heavily in major changes that might not meet customer expectations, gradual improvements allow organizations to test new ideas, measure results and refine their offerings while maintaining the confidence of existing customers.

This balanced approach allows organizations to innovate while preserving the consistency that customers have come to trust.

Trust is a long-term competitive advantage

Economic uncertainty often increases the importance of trust. Customers are more likely to remain loyal to businesses that consistently deliver reliable products, communicate transparently and provide dependable service.

Trust also supports long-term growth by encouraging repeat business and strengthening brand reputation. Strong relationships can become especially valuable during periods of uncertainty, as satisfied customers are more likely to recommend businesses to others and continue choosing familiar brands. This loyalty can provide a more stable source of revenue when attracting new customers becomes more challenging.

While attracting new customers remains important, retaining existing ones is frequently more cost-effective. It provides greater stability during unpredictable economic periods.

Businesses that combine customer-focused products with consistent services are often better equipped to navigate market fluctuations than those relying solely on aggressive expansion or short-term promotional activity, allowing them to remain competitive as conditions continue to change.

Building long-term business resilience

No business can fully eliminate economic uncertainty, but every organization can improve its ability to respond to it. By understanding customer priorities, focusing on simple and effective products, embracing continuous improvement and building lasting trust, businesses create stronger foundations for long-term success.

Whether operating in finance, technology, retail or digital entertainment, organizations that continue delivering clear value are often the ones best positioned to adapt as markets evolve.

Every budget season, Kenya returns to the same familiar debate: should government borrow more or tax more to finance development? Both are legitimate tools of public finance, but they overlook a more important question: can Kenya finance more of its future through wealth it deliberately builds and invests?

For decades, Kenya has relied on taxes to meet today’s obligations and debt to bring tomorrow’s income into the present. What has been missing is a national mechanism for converting public assets and long-term revenues into wealth that generates returns for future generations.

The Sovereign Wealth Fund Act, No. 25 of 2026, offers that opportunity. It provides Kenya with a legal framework to build, invest and preserve national wealth over the long term. More importantly, it signals a shift from managing annual budgets to managing the country’s balance sheet.

The significance of the law is not simply that Kenya now has a sovereign wealth fund. For years, the idea existed only in policy papers and conference discussions. Parliament has finally turned that ambition into law, creating the foundation for a long-term wealth architecture.

The world’s best sovereign wealth funds show that lasting prosperity is built on institutions, not windfalls.

Norway transformed oil revenues into the world’s largest sovereign investment fund, preserving wealth long after its natural resources are depleted. Singapore, with almost no natural resources, built globally respected investment institutions by professionally managing state assets.

Botswana used diamond revenues to build national savings, while the United Arab Emirates is investing hydrocarbon wealth into technology, logistics and infrastructure.

Closer home, Angola’s sovereign wealth fund has adopted a strategy that combines liquid investments with productive sectors of the economy under internationally recognised governance standards known as the Santiago Principles. The lesson is clear: sovereign wealth is less about where capital comes from than how it is governed and compounded.

Kenya’s starting point is different. We do not have Norway’s oil or Botswana’s diamonds. But we do have valuable public enterprises, growing pension savings, an expanding digital economy, sophisticated capital markets and one of Africa’s strongest financial sectors. Most importantly, we have a young and increasingly skilled population.

People are often viewed as a fiscal burden because they require schools, healthcare and jobs. History suggests otherwise. China’s economic transformation was powered not by natural resources but by sustained investment in people, productivity and infrastructure.

Kenya’s youthful population can become a similar long-term asset if institutions convert today’s productivity into tomorrow’s wealth.

That requires thinking beyond a single sovereign wealth fund towards a broader sovereign wealth architecture.

A sovereign wealth fund should receive clearly defined sources of national capital, invest them professionally and reinvest returns over generations. Initial capital need not come from a single resource discovery. It can be built gradually from dividends earned by commercially viable state enterprises, returns from strategic public assets and other dedicated public revenues protected from day-to-day spending.

This should complement-not replace-existing institutions. Pension funds must continue protecting retirement savings. Public investment vehicles should remain independently governed. Capital markets should keep attracting private investment. The sovereign wealth fund would connect these pillars, creating another source of long-term national capital.

The real value lies in reducing pressure on taxpayers and future borrowing. Instead of financing every development priority through new debt or higher taxes, Kenya would begin financing more investment through returns generated by assets it already owns.

That is a fundamental shift in public finance. Not every shilling government earns should be spent immediately. Some should be invested, allowed to grow and preserved for future generations.

If Kenya embraces that discipline, future budget debates may become less about choosing between taxes and debt, and more about how effectively the country is growing the wealth it already possesses.

Last week in Business Talk, we commenced a multi-part series on financial services firms in Kenya with politically exposed people owning or controlling substantial shares in the company. More politically exposed banks in the US, as an example, yielded political benefits by receiving substantial government bailout funds during their last financial crisis.

Utilising famed organisational researchers Roger Mayer, James Davis and David Schoorman’s trust framework of ability, benevolence, and integrity, let us look at whether political exposure helps or hurts our financial services firms.

As an example, borrowers and savers have historically flocked to Uganda’s First Lady’s UWESO Micro-Finance institution for some of these reasons.

In Kenya we remember the trauma around the bank collapses of Dubai Bank Kenya, Imperial Bank, and Chase Bank Kenya.

If the shareholders had more political clout, would the Central Bank of Kenya (CBK) and the Kenya Deposit Insurance Corporation still have liquidated them or placed them under statutory management? Or might they have received bailout funds in a Western-style rescue? The National Bank of Kenya had a share swap acquisition.

While bank failures in Kenya are rare given the strength of our CBK regulation and protection for depositors, what about the credit side of banking? A politically exposed bank might be more likely to get away with unsavory lending practices that border more on shylocks.

In reaching out to students, colleagues, and those in my professional network, I was appalled to see a trend by the more politically exposed banks in apparent disregard of CBK rules as well as abandoning benevolence toward borrowers and failing integrity in disclosures and transparency.

CBK carries very clear guidelines that banks must provide the exact terms and conditions of loans to the borrowers. But politically exposed banks seem more likely to fail to provide loan agreements promptly. Borrowers get referred to generic terms appearing on a website rather than specific terms that govern their own loans.

These banks also seemed to fail to provide key loan disclosures in a key facts document even showing interest calculations.

When loans are done digitally, but then the particular bank’s mobile app blocks screenshots by the prospective borrower, then the borrower cannot retain the legally required copies of the loan agreement. Then when borrowers reach out, the banks seem to not provide the actual loan terms and conditions that appeared on the mobile app at the exact time the loan was taken.

Further, when loan officers fail to follow even the most generic loan rules contained on their websites, there is often no felt recourse for borrowers at politically connected banks. Collections officers and auctioneers spouting ‘what can you do about it’ has been reported more than once.

A customer of such banks reported with evidence that their current account was frozen even though their loan was current.

Generic loan terms that borrowers get referred to often have contradictory and unreasonable terms such as different notice periods within the same document, broad shocking liability exclusions, and extensive powers to restrict other accounts even without notice.

Politically exposed banks also seemed more likely to use auctioneers without providing data protection proof of those auctioneers compliance with Kenyan laws

. In one case, an auctioneer firm called a borrower of a politically exposed bank over 30 times in one hour and the loan was less than 60 days past due as the borrower was delaying payment due to a formal complaint to the bank and CBK about not receiving loan documentation or a loan schedule of payments.

Even though CBK prohibits unconscionable or unreasonable terms and requires fair, clear, and very transparent contracts, how can a borrower push back against a politically exposed bank and file complaints that get heard and acted upon?

Additionally, many banks require borrowers to commensurately purchase loan insurance that is built into the loan costs in the event that the borrower passes away or loses their job.

But in another situation with provided evidence from a borrower at a politically exposed bank, despite a documented job loss due to redundancy, the bank refused to provide an insurance payoff even though the branch said that the loan should be paid by the insurance on account of the job loss.

Upon challenging the head office as to why no insurance was paid to cover the loan despite paying for the loan insurance when the debt commenced, the politically exposed bank refused to provide the name of the external insurer that supposedly insured the loan and refused to provide the insurance policy.

The bank flatly stated to the borrower, ‘you can only go complain to the Insurance Regulatory Authority and just see if they will do anything’. But a debt holder cannot go to IRA without even the name of the insurer or the policy details.

Political exposure can therefore work very differently depending on where a banking customer sits. A depositor may see powerful owners and feel more confident about the survival of the bank while a borrower may see the same owners and wonder what happens when the bank needs discipline.

Read Business Talk next week as we continue our multi-week expose on political ownership in our Kenyan financial services sector and delve into the mystifyingly cryptic insurance annuity business.

Immigration lawyers are seeing a surge in work as more Kenyans in the US fight to remain in the country amid the Donald Trump administration’s crackdown on sham marriages-arrangements in which foreign nationals marry American citizens to obtain green cards.

The crackdown has raised the stakes for those accused of marriage fraud. Kenyans and other immigrants charged with conspiracy to commit marriage fraud face a maximum prison sentence of five years or a fine of up to Sh32.3 million, turning what was once seen by some as a shortcut to permanent residency into a potentially costly criminal case.

Some of the Kenyans and other Africans involved in the marriage scam paid from $35,000 (Sh4.5 million) to as much as $45,000 (Sh5.8 million) to an American citizen. The money is usually paid in instalments: in some cases, about $10,000 (Sh1.3 million) upfront, $20,000 (Sh2.58 million) once the Kenyan national secures a green card and a final $5,000 (Sh647,000) after the divorce is settled.

On August 12, the Department of Justice’s Office of Public Affairs issued a statement saying it was dismantling a decade-long marriage fraud scheme that has so far arranged more than 1,000 fraudulent marriages. The Justice department said the scheme stretched across ‘New York, Connecticut, Florida, Georgia, Kentucky, Massachusetts, Pennsylvania, and Tennessee’, with connections reaching into China and Vanuatu.

Solomon Musyimi, a lawyer based in Houston, US, who has practised immigration law for 20 years, tells BDLife the crackdown on sham marriages did not happen by accident. It grew out of a political promise.

‘The President of the US campaigned on an anti-immigrant platform,’ he says, ‘and so that is what is driving this.’

Not bond eligible

However, the penalties and scrutiny are far more severe. He points to a recent decision by the Fifth Circuit Court of Appeals, which covers Texas, where many Kenyans live.

The court ruled that people who entered the US illegally and are arrested cannot be released on bond.

‘You are not bond eligible,’ he says. That can leave defendants in detention as their cases move through the courts for six months, and in some cases as long as 18 months.

‘So many people end up getting frustrated, and they decide to take voluntary departure and leave,’ he says.

Also, the states that once resisted handing detained immigrants over to federal authorities are now cooperating more readily, making it harder for Kenyans arrested on immigration-related charges to avoid transfer to federal custody.

Mr Musyimi says the government’s scrutiny has also become more sophisticated. Immigration officers examine seemingly routine details, including where a couple receives mail; bills sent to different addresses can raise a red flag.

‘Immigration has taken a very aggressive approach in using AI to investigate many of these cases,’ he says, adding that the scrutiny has fallen hard on African applicants.

‘Almost every marriage, if it is of an African, is being investigated,’ he says. ‘They are basically being treated as fraudulent until you prove that they are not.’

The scrutiny does not stop with paperwork. Officers may interview couples separately, putting each through the same set of questions to test whether what they say aligns. Investigators can also make visits to the couple’s home, showing photographs of a spouse to neighbours or apartment managers to establish whether the person actually lives there.

The immigration lawyer warns this shortcut has become an increasingly risky gamble, with potentially serious legal and financial consequences.

‘Both the American citizen and the foreign spouse can be prosecuted and sent to prison for up to five years, along with fines reaching Sh32.3 million.’

Age gap, separate homes

Charles Wanjohi, a partner at Wanjohi and Muli Immigration Law Firm in North Carolina who has practised law in the US for 16 years, adds that certain details can raise red flags, including a significant age gap between spouses and couples who do not live together.

However, he says living apart is not, by itself, evidence of fraud. Couples in bona fide marriages may live separately for legitimate reasons, including work, school, military service or caring for a sick relative. But without a credible explanation, separate addresses can attract scrutiny, particularly now as immigration enforcement has tightened.

Mr Wanjohi says Kenyans married to US citizens should not be deterred from seeking the immigration benefits that come with a genuine marriage. Seeking those benefits does not, by itself, make a marriage fraudulent, provided the couple genuinely intends to build a life together.

‘Immigration benefits are a known consequence of a genuine marriage,’ he says. ‘But they should not be the motivation for entering into the marriage,’ he says, adding, ‘officials describe a bona fide marriage, also referred to as a good faith marriage, as one in which the parties entered the marriage with the genuine intention of establishing a life together as spouses, rather than entering into the marriage for the purpose of evading US immigration laws.

He also stresses that a significant age gap, different nationalities or different religious backgrounds do not, on their own, make a marriage suspicious.

‘A marriage cannot properly be rejected simply because there is a substantial age difference, because the spouses come from different countries, because they practice different religions or because they have different cultural backgrounds,’ he says.

Another concern among Kenyans living in the US is whether immigration authorities expect couples to date for a certain length of time before marrying.

‘There is no minimum dating period prescribed by US immigration law,’ he says, though a very short courtship can invite more questions.

Married in Kenya, married in the US

If approached by immigration authorities, Mr Wanjohi advises couples to have their documents in order. A petitioner must first establish US citizenship or lawful status, using documents such as a passport or birth certificate, followed by a valid marriage certificate and proof that any previous marriages were legally dissolved.

One issue Mr Wanjohi frequently encounters among Kenyan clients is a previous marriage in Kenya that was not properly documented as having ended before they remarried in the US. Without valid divorce documents, he says, proving that the subsequent marriage is legally valid can become a problem.

‘We sometimes encounter Kenyans who believe that a chief’s letter or an affidavit is sufficient evidence that a previous marriage was legally terminated,’ he says.

He recalls a case where American authorities tried to confirm a Kenyan divorce with the local court and could not verify it existed.

‘That creates a very serious problem because USCIS [US Citizenship and Immigration Services] may then question whether the person was legally free to enter into the subsequent marriage,’ he says, ‘leading to denial of the petition, and sometimes any other immigration benefit in the future.’

Proof threshold

However, a marriage certificate alone is not sufficient proof of a bona fide marriage.

‘It only proves a wedding happened. It does not necessarily establish the intentions of the parties when they married,’ says Mr Wanjoh. ‘That is why I tell clients to gather evidence like joint bank accounts, shared leases, joint tax filings, insurance policies, photographs, and travel records.’

For couples split between countries, he suggests additional proof such as airline boarding passes, phone call records and messages, and evidence of financial support sent back and forth. He says quality matters more than quantity. A bank account used for two years to pay rent and buy groceries, he points out, says far more than one opened two weeks before an interview with barely any activity in it.

Don’t lie, get a lawyer

Gladys Mogaka, another US-based immigration and nationality law attorney and the founder of the Law Office of Gladys Mogaka PLLC, adds that USCIS does not judge a marriage on one detail alone.

Officers look at the whole picture, from how the couple met to whether they live together, how they handle money, how often they talk, whether they travel together, how they relate to each other’s families, and how well they truly know one another. Some situations may raise more questions, but no single factor proves fraud on its own.

‘Even social media can be used to test whether a couple’s story holds up. They may also check with employers or landlords to confirm the details,’ she says, adding, ‘USCIS decides who qualifies for immigration benefits, while ICE handles enforcement and investigations, and the Department of Justice can prosecute criminal cases.’

Her message to anyone considering a sham marriage is direct. ‘Don’t do it,’ she says. ‘A sham marriage can have serious and long-lasting immigration and criminal consequences.’

USCIS Director Joseph B. Edlow said in a statement, ‘Anyone willing to lie, cheat or steal their way to legal immigration status is a direct threat to America’s national security.’

Over 1,000 cases

The warning comes as the crackdown expands. By the end of 2025, USCIS said it had reviewed more than 1,000 cases flagged for potential fraud or ineligibility, conducted more than 2,000 home and workplace visits and completed nearly 1,500 in-person interviews.

The scrutiny extends beyond marriage fraud to the misuse of work and student visas, signalling a broader effort to tighten immigration enforcement, with Kenyans seeking residency through marriage increasingly caught in the crosshairs.

Ms Mogaka warns that even ‘real couples’ can get caught up in the tighter checks. ‘Increased enforcement means legitimate couples may face more scrutiny,’ she says. ‘Being questioned does not mean USCIS has already decided a marriage is fake. Don’t panic, and most importantly, don’t lie. Gather proof of a real and shared life, and speak with an experienced immigration attorney before answering USCIS or walking into an interview,’ she says, adding, ‘lawyers must also keep up with policies that keep changing.’

This week offered another reminder of how fragile the sacco sector’s biggest ambitions around the National Payments System remain.

The Co-operatives Bill, which would repeal the outdated Co-operative Societies Act and allow saccos to connect directly to the National Payments System, is still stuck in a parliamentary Mediation Committee after the National Assembly rejected Senate amendments in April.

That delay matters because the sector now holds more than Sh1.5 trillion in member deposits and assets, yet remains locked out of the payment rails that Sacco Central was created to access.

But the legislation is only part of the story. More revealing was Mentor Sacco chief executive Joyce Waceke’s warning that the vacuum created by the stalled Bill is being filled by poorly researched claims circulating in public forums.

If misinformation can spread before Sacco Central is operational, it will spread even faster once billions of shillings in liquidity and shared data begin flowing through a central platform. The real challenge has never been whether the technology works. It is whether members trust the institutions running it.

Sacco Central is designed as a member-owned secondary cooperative providing shared infrastructure to participating saccos.

It already has 74 members, including 72 deposit-taking saccos. The Treasury’s implementation framework envisions a Central Liquidity Facility, a shared digital services platform and eventual access to the National Payments System.

Smaller saccos, which struggle to afford sophisticated banking systems, cybersecurity and analytics, stand to benefit most.

Yet sacco members are not just customers; they are owners. That raises different questions whenever systems change: Who can access my information? Who controls my money? What happens if something goes wrong?

Technology may promise efficiency, but members judge institutions through transparency and accountability. Trust cannot be treated as a communications exercise after launch. It must be built into Sacco Central from the outset.

That starts with three practical measures.

First, every sacco should have a rapid-response protocol capable of addressing false claims about deposits or liquidity within hours rather than days.

Second, trusted local messengers matter more than head office statements. Rumours travel fastest through branch networks, chama groups and WhatsApp conversations.

Third, members need simple quarterly transparency reports in Kiswahili and English explaining where pooled liquidity sits and what governance decisions have been made. None of these measures requires Parliament to pass the Bill.

Ultimately, Sacco Central’s success will be measured by whether members believe their money is safer, their sacco is stronger and their voice still matters.

Investors on the Nairobi Securities Exchange (NSE) are snubbing a scheme that allows for lending and borrowing of securities, put off by a rally in share prices.

The scheme, also known as the Securities Lending and Borrowing (SLB) programme, is a regulated financial process where an investor temporarily transfers shares or bonds to another party for a fee.

Under this arrangement, commonly referred to as ‘short-selling’, traders borrow shares to sell them immediately, hoping the price will drop so that they can buy them back cheaper and make a profit. But with the prolonged bull market run on the NSE, borrowing shares has become risky, and investors are scared that if they borrow a stock, its price could jump even higher the following day, forcing them to buy it back at a massive loss.

Data by the Central Depository and Settlement Corporation (CDSC) shows that the SLB programme, which was introduced in 2020, has concluded only 23 successful transactions over the last six years.

The transactions were executed on six blue-chip companies – Safaricom, KCB, NCBA, EABL, Equity and KPLC- moving a total of 402,200 shares during the period 2020 to 2023.

About 22 transactions were registered but failed to match the borrowers to the lenders during the period (2020-2023), and from 2024 to date (2026), no single transaction has been concluded on the securities lending and borrowing platform.

Market analysts say activities on the securities lending and borrowing platform have not picked as expected largely due to the small nature of the Kenyan capital markets compared to the developed markets, small pool of active shares available for lending and relatively inefficient and transparent market, compounded by the share price rally which began in 2024.

‘Short-selling as an investment strategy is yet to pick up momentum domestically, and that has led to low uptake of securities lending and borrowing. Furthermore, the ongoing bullish sentiment in the equities market has dampened SLB’s appeal,’ says Churchill Ogutu, Head of Research at Capital A Investment Bank.

New products

Another analyst who didn’t want to be quoted says Kenyan capital markets are fairly small and fairly inefficient and less transparent compared to the developed markets, which makes it difficult for securities lending and borrowing to flourish.

‘It is still a market that is growing, but I tend to believe we need more securities actually into the market through IPOs (initial public offerings) or maybe listing by introduction; we need more companies, and that is how the market will attract the new products. Having more companies brings more options into the market where investors can borrow shares,’ the analyst says.

‘Looking at our market it is still pretty small, looking at the companies that we have, if you are looking at 66 companies and the most active companies are around seven stocks. Short selling works based on intelligence and it best works in advanced markets where you find that the markets are efficient or let’s call them semi-efficient because we normally say there is no market that is perfectly efficient.’

In April this year CDSC chief executive Jesse Kagoma said the share rally that began in 2024 adversely impacted lending and borrowing of shares on the NSE.

‘Being a new product and penetrating a new Kenyan market, that is something I can say we really tried to crack, but at the same time, from 2024 we have not had any transactions in the market. In 2024, the market started going up, and now anybody or everyone in the market anticipated the prices to continue going up, and you can notice the difference between those years and from 2024,’ Mr Kagoma said in a presentation to a securities lending and borrowing forum in Nairobi in April this year.

‘In 2024, I can tell you there were some lenders already in the market, but there was no one to borrow from those lenders. I think in 2025 that is where we didn’t have many of the lenders; in fact, at some point, like nine months, we didn’t have any lender in the market.’

The CMA has allowed the lending and borrowing of shares to boost trading at the Nairobi bourse, especially on dormant stock whose owners have no intention to sell in the short term.

The platform, which is owned by CDSC, allows investors to borrow and lend shares for a profit, akin to bank deposits, in a move aimed at boosting liquidity and trading on the Nairobi bourse.

Under the arrangement, an investor borrows shares with the intention of selling at a higher price to make a profit from the capital gains or stock appreciation.

The lender will get back the shares within one year, expecting to make a paper profit from the stock appreciation and a negotiated fee ranging from one percent to 12 percent of the value of the security at the point of lending.

NSE is keeping millions of inactive share accounts that have not recorded transactions for a continuous period of 24 months.

These inactive share accounts grew by 28 percent to 1.54 million between 2022 and 2024, according to data from the CDSC.

Usually, inactive shares reduce equity trading activities on the Nairobi bourse, which in turn denies the exchange, CDSC and brokers revenues in terms of trading commissions and levies.

CMA approved a securities lending and borrowing platform owned by CDSC in 2020 on a trial basis before allowing its full rollout in February 2022.

According to CDSC, the volume of shares lent and borrowed during the period 2020 to 2024 ranged from 100 shares to 1,020,400 shares, at lending rates of between one percent and 12 percent.

These shares were borrowed for periods ranging from 30 days to 365 days.

When Aliko Dangote looks east, he sees more than an investment opportunity. He sees the chance to reshape Africa’s energy map. After transforming West Africa’s refining industry in Lagos, Africa’s richest industrialist is now eyeing Lamu as the site of a major downstream petroleum facility.

For Kenya, the proposed refinery is more than foreign direct investment. It is an opportunity to become East Africa’s industrial and logistics hub, while helping the region break a long-standing paradox: exporting crude oil only to import expensive refined fuel at a foreign exchange premium.

East Africa is approaching a defining moment. Uganda’s Albertine Graben reserves are moving towards commercial production through pipelines that will connect inland oilfields to the coast. The real question is not how quickly crude reaches international markets, but whether the region can build industries around its own resources.

For decades, Africa’s energy model has relied on exporting raw commodities while importing finished products. That approach has enriched global traders but left African economies exposed to currency shocks, supply disruptions and fuel shortages. The Niger Delta remains a cautionary tale of extraction without local value addition.

Kenya has an opportunity to chart a different course.

The first priority is building a regional petrochemical ecosystem. A Lamu refinery should use crude as industrial feedstock, producing fuels alongside products such as bitumen, plastics and petrochemical inputs that support manufacturing across Kenya, South Sudan, Ethiopia and the wider Great Lakes region.

Second, Lamu should become East Africa’s strategic energy gateway, integrating refining, storage and export infrastructure with the Lamu Port-South Sudan-Ethiopia Transport (Lapsset) corridor.

Third, Kenya must ensure local participation through skills development, technology transfer and supply chain opportunities for Kenyan businesses.

Finally, the project should be anchored in strong environmental and governance standards to avoid repeating the mistakes seen elsewhere on the continent.

If executed well, the Lamu refinery could become more than an oil project. It could mark the shift from exporting Africa’s resources to exporting Africa’s industrial value.

Telecommunications firms, including Safaricom and Airtel, will be blocked from reselling dormant SIM cards until a six-month window lapses, adding compliance obligation costs for networks that have been recycling inactive lines after three months.

For subscribers, the move will give them more control over their lines as they will be able to go for longer without making purchases of services such as calls before they lose their SIM cards.

New rules proposed by the Communications Authority of Kenya (CA) require the service providers to contact owners of dormant SIM cards and give them three more months to revive their lines – typically through making new purchases of airtime and data.

The telcos will publish lists of phone numbers due for deactivation a month before they switch them off and on a quarterly basis on their websites, in a newspaper with a national reach, and through other media.

The rules also create special protection for prisoners or people held in remand. The proposals are open to public participation until September 11. The rules introduce costlier compliance obligations for operators, who have been switching off inactive lines to manage the limited supply of numbering resources and prevent network waste.

‘Number deactivation and recycling shall be triggered when a number records no revenue-generating activity, such as making or receiving a call, sending or receiving an SMS, using data, topping up airtime or using the number for value-added services, for three months,’ the proposed rules say.

After three months without any revenue-generating activity, the telco would then be required to notify the subscriber using the contact details collected during registration, including through SMS and other available contacts. The notification period would continue for another three months unless the customer reactivates the line. Thirty days before the end of this period, the telco will publish a list of numbers due for deactivation and recycling.

‘Thirty days before the lapse of the three months and with the number still inactive, the service provider shall publish the list of numbers susceptible to deactivation and recycling if they are not activated within 30 days from the date of publication,’ the rules say.

‘The generic notice of intention to deactivate and recycle inactive numbers shall be posted on the provider’s website, publicised in other media, and published in the daily newspaper with nationwide circulation quarterly.’

The public notice would include a USSD code for customers to check whether their number is active, suspended, under recycling, or deactivated.

Telcos would also be required to keep records of efforts made to contact affected subscribers. Once a number is deactivated, the operator would have to delink and archive the previous owner’s personal data and ensure it is not accessible to or inherited by a new subscriber.

Inactive SIM cards generate no revenue, yet they occupy network resources such as routing databases and signalling systems, creating a cost burden for operators. Telcos recycle them to manage a finite pool of mobile numbers allocated by the CA and ensure continuous availability for new subscribers as demand for more lines grows.

Doubling the period the companies maintain millions of dormant lines across their networks would increase their expenses. Safaricom and Airtel have never disclosed the operational cost of maintaining a single dormant line.

However, reselling lines has raised security and privacy concerns as phone numbers have become a key gateway to financial services, online accounts and security authentication in the digital age.

In March, the High Court barred telcos from automatically recycling inactive or dormant phone numbers without the original subscriber’s consent after an inmate moved to court to challenge SIM card relocation after periods of involuntary inactivity.

The court said the practice risks privacy breaches, as new users could gain access to residual data linked to mobile banking, messaging platforms, and online accounts. It directed the State to develop regulations governing the management of inactive numbers.

Safaricom charges customers between Sh200 and Sh1,000 for a service that lets them retain inactive lines for fixed periods of between six months and two years without topping up.

The CA’s proposals introduce special protection for people serving prison sentences or held in remand for extended periods. The Commissioner-General of Prisons would submit the phone and ID numbers of people serving sentences of more than six months, after exhausting their appeals, for exemption from the six-month inactivity window.

‘In the case where a suspect is denied bail and likely to be in remand for more than six months, the Commissioner-General of Prisons shall also facilitate whitelisting of their telephone numbers,’ the CA says.

Telcos would also be required to submit lists of deactivated and recycled numbers to a centralised system every quarter, for third parties to update their records before calling or sending SMS messages linked to the numbers.

Newly issued and recycled numbers would, by default, not receive marketing messages from the issuing operator or third parties.

Before recycling a number, telcos would also have to delink it from previously opted-in business-to-consumer messages.