Category: Business Daily

Equity Group Holdings has reported a 23.8 percent growth in profit after tax for the first quarter ended March 2026, riding on cost-cutting, as the listed lender’s asset base crossed the Sh2 trillion mark despite a slowdown in lending.

The lender with operations in Kenya, Rwanda, Uganda, Tanzania, South Sudan and the Democratic Republic of Congo (DRC) reported a profit of Sh18.3 billion, up from Sh14.8 billion.

The profit jump followed a 19 percent drop in interest expenses to Sh10.7 billion from Sh13.3 billion a year earlier, despite a 12 percent expansion in deposit base to Sh1.48 trillion from Sh1.31 trillion.

This followed a faster cut in deposit rate paid to customers than the price charged on loans, resulting in wider interest margins, especially in Kenya. The bank’s net interest margin (difference between its lending and deposit rate) in Kenya expanded to 8.4 percent from 7.4 percent.

The group’s interest income grew by 4.5 percent to Sh43.7 billion from Sh41.8 billion even as its loan book expanded 8.5 percent to Sh873.4 billion.

The growth in loan book has however been slow resulting in the bank holding half its assets base, Sh1 trillion, in cash and near cash instruments.

‘If you add cash and cash equivalent with government securities, it means out of the 2 trillion, Sh1 trillion is available for disbursement. We have Sh150 billion going into cash and cash equivalent demonstrating our readiness and capability to fund growth and to support our customers because of being cash rich,’ said James Mwangi the group’s chief executive.

The bank’s loan to deposit ratio declined to 47 percent from 53 percent signalling slower conversion of liabilities to assets. This is especially so in Kenya where the bank’s liquidity ratio rose to 81 percent, against a statutory requirement of 20 percent, indicating it was holding excess cash.

Despite a cut in interest rates credit uptake in Kenya has been slow to pick up, with private sector lending up 8.1 percent in March, as business and individuals hold for an improved economic environment.

Equity groups operating costs grew by 4.3 percent despite a 34.6 percent jump in staff costs, signalling a tight rein in other operational expenses.

Jump in staff costs follows salary hikes in the second half of last year as the lender sought to align to industry levels following years of lagging behind.

The lender cut provisions held for bad loans by 16.9 percent as its bad debts declined following a write off of Sh27.4 billion in the year ended December 2025.

‘We are cognisant it is best practice to write off loans when they are not performing so that you remain a clean balance sheet -you recognize losses as they occur,’ said Mr Mwangi.

Other operating expenses declined by 9.6 percent which management attributed to increased use of self-service digital banking.

‘Customers are moving away from channels that have variable costs (for example ATMs and agents), like the way they moved away from fixed channels, to self-service and that tells you more about the efficiencies we are likely to move to have when you remove fixed cost and variable cost’ said Mr Mwangi.

The Kenyan unit recorded a 20.8 percent profit growth to Sh10.3 billion to remain the group’s most profitable business.

Tanzania in which the subsidiary injected an additional capital of Sh4 billion last year recorded the fastest profit growth in the first quarter, up 150 percent, to Sh1 billion.

DRC recorded a 32 percent net profit growth to Sh5 billion while Rwanda grew 36 percent to Sh2.5 billion.

Uganda was the only subsidiary to record a profit drop of 20 percent to Sh800 million, following a decline in net interest rate margins to 8.4 percent from 9.2 percent.

The group’s insurance business recorded a 53 percent increase in profit before tax to Sh636 million riding on premium growth.

Taxpayers are facing a Sh390 million payout to an Indian consultancy firm that designed the multi-billion shilling Mwache Dam project at the Coast after the Attorney-General lost a legal battle over unpaid consultancy fees and interest.

The High Court ordered the government to settle a 14-year-old debt owed to Consulting Engineering Services (India) Private Limited for feasibility studies, designs and tender documents prepared for the flagship water project.

The court rejected the government’s attempt to disown the consultancy contract, ruling that signed agreements, project addenda, processed invoices and official correspondence proved the State had fully recognized and implemented the deal.

The award relates to consultancy services for the Mwache Multi-purpose Dam in Kwale County, a Sh20 billion flagship water project meant to ease chronic shortages in Mombasa city and surrounding areas and now targeted for completion in 2027.

The dam, co-financed by the government and World Bank, is expected to supply 186,000 cubic metres of water daily to the Coast region and support irrigation and flood control once completed.

While allowing a claim filed by Consulting Engineering Services (India) Private Limited, the court ordered the government to pay the firm $3,017,908 (Sh389.3 million), together with interest pegged on the London Interbank Offered Rate plus two percent.

The court ruled that the Ministry of Regional Development Authorities had entered into a valid consultancy contract with the firm but failed to honour payments.

Court records show the ministry awarded the consultancy tender to the Indian firm on May 31, 2010, at a contract sum of $4.3 million for feasibility studies, detailed designs and tender documents for the Mwache Dam project.

The contract was later revised upwards through two addenda. The first addendum, signed in 2012, introduced additional irrigation works worth $431,346 while the second, signed in 2013, added services linked to World Bank sponsorship valued at $1.24 million.

The consultant told the court it completed the feasibility report in September 2011 and later submitted final study reports and tender documents in February 2017. It said it raised 19 invoices under the contract but the government only paid eight invoices amounting to half the contract value, with the last payment made in December 2012.

The company accused the ministry of ignoring repeated payment demands despite several written acknowledgments admitting the debt.

In defence, the Attorney-General and the ministry denied the existence of a valid procurement contract and argued that no lawful tendering process had been undertaken.

An emerging trend where private land gets ‘grabbed’ through deliberate duplication of ownership documents should stop. The government should move into action to forestall further damage to our economy, and faith in property rights.

Records in courts and narratives in local dailies reveal that the trend started a while back, but may have scaled up, lately.

These remind us about the famous private land grab which involved multiple claims to some 134-acre prime land in Karen, Nairobi, which went public in 2014.

The saga was quite sensational and sucked in several MPs and senior public officers, who had allegedly benefitted from the purported ‘subdivision’ and ‘allocation’ of plots derived from the land.

The subsequent court case included several private and public entities, as the legitimate land owner fought back. Luckily, the purported beneficiaries stepped back before they could construct on ‘their’ plots. The court ruled on the matter early last year, throwing out all other claims, and asserted the rights of the original owner.

Fast forward to 2026. Last week saw Kenyans treated to high drama as huge expensive residential units within some disputed property in the Marurui neighbourhood of Nairobi were demolished. The scale of the demolitions was alarming.

It triggered demonstrations on the Northern bypass which led to the obstruction of traffic and interference with businesses around Marurui on the material day.

As the legitimate owner held onto the original ownership documents, someone else obtained a parallel set, and proceeded to subdivide and sell the resultant sub-plots. The buyers went on to construct their dream homes. The original owner sued.

After years of legal contests, the court restored the rights of the original owner, and ordered the eviction of other claimants. Regrettably, pricey houses had to be brought down.

More drama is playing out over the land that is home to ‘Paradise Lost’ off Kiambu Road. Reportedly, there are multiple claims to the land. Some entity has procured a title that seemingly overlaps another, and later to a ‘subdivision’. The resultant sub-plots are reportedly on sale.

But the matter has moved to court, with the original owners seeking to assert their ownership. It may run for years. But the lessons from the incidents above should inform. Buyers beware! Furthermore, the County Government of Kiambu should carefully consider whether to approve or suspend any development proposals presented against such contested land.

These few examples are perhaps indicative of a wider problem where private land rights are getting deliberately targeted for ‘grabbing’. The model involves irregularly creating a new layer of ownership rights to overlap the existing and legitimate one.

Where deliberate, this indicts the integrity and reliability of gatekeepers of state land records.

The government should urgently investigate, punish those involved, and close the gaps and weaknesses through which such irregularities are advanced.

Oil marketers have voiced concerns about the government’s last-minute decision to reduce diesel prices by Sh10 per litre through a Sh2.7 billion subsidy, as well as its failure to clear arrears from previous subsidies.

They said the government’s failure to clear arrears from the previous subsidies has triggered a cash crunch in the industry.

Industry executives said oil marketers were not consulted on the decision to increase the diesel subsidy, which they claim adds to the nearly Sh20 billion in unpaid arrears that are hurting their cash flows.

The government’s decision increased the diesel subsidy to Sh24.57 per litre, reducing prices to Sh232.86 in Nairobi.

Despite the government agreeing to lower the diesel price by about Sh10 a litre, negotiations on Monday, the first day of the strike, failed to reach an agreement.

The public transport strike over fuel price hikes triggered by the Iran war was called off on Tuesday, after the government reached an interim agreement with the lobby representing bus and minibus owners to pause the protests for seven days.

Last night’s decision will cost Sh2.7 billion in additional subsidy, bringing to Sh16.6 billion the subsidy bill for the two monthly cycles since April 15, with the industry now jittery on when the debt will be paid.

‘They did not involve us in the talks. As an industry, we are assessing the situation from a working capital perspective. We were kept in the dark about it and they just sent emails on the price changes via SupplyCor,’ said an executive.

‘The subsidy is obviously bigger given the additional Sh10 per litre of diesel. Monies owed to us are piling and seemingly the government does not care if we have the means to finance the product,’ said the executive.

SupplyCor is the secretariat for oil marketers in Kenya and liaises with the Ministry of Energy and Petroleum and the energy regulator to coordinate importation of fuel and also the monthly computation of prices.

‘On the matter of the subsidy alone, between last month and this month, the government has applied some Sh13.9 billion to manage the cost of fuel. Last night’s reduction by Sh10 on the cost of diesel took some Sh2.7 billion,’ Energy and Petroleum CS Opiyo Wandayi said on Tuesday.

Besides the Sh16.6 billion for the two months, oil marketers have cited an additional subsidy debt of Sh1.7 billion, which has been verified but is yet to be paid, and another Sh9 billion awaiting verification.

Delays in settling the subsidy arrears have been blamed for the erratic fuel supply, which has hit the country since last month, as oil marketers grapple with thinning capital against the costly fuel.

Stations owned by major retailers such as Vivo Energy and Rubis Energy Kenya and dozens of others outside the major cities, have been grappling with erratic supplies since last month.

The inconsistent supplies have been blamed on thinning working capital, which has made it increasingly difficult to get fuel from the system of the Kenya Pipeline Company (KPC).

Oil marketers must pay fuel taxes upfront before evacuating their product from the KPC system, laying bare the tribulations that have forced many to seek bank loans and others to shut down.

The government has, in the past, been unable to pay subsidy arrears owed to oil marketers, underscoring the fear currently building up in the industry.

In 2023, the government floated a bond to clear a Sh45.8 billion debt that had piled up under the fuel subsidy scheme. The industry says the government is mishandling the fuel prices crisis, raising questions on the apparent lack of prior engagement even before the new prices were announced on May 14.

‘The government can engage specific players, but this should have happened well in advance to get ways of moving forward and look at all options,’ said another executive.

‘With the bigger subsidy, the industry under-recovery is getting worse; you have a new problem now.

The government is opening more debt, and they are failing at the technical aspects of this crisis,’ added an industry insider who requested anonymity.

Higher landed costs of fuel mean that oil marketers are using more cash to buy the same volumes of fuel. The need for increased funding has forced many to seek bank loans, while the smaller ones are being forced to shut down operations.

Another industry executive says that marketers will increasingly find it difficult to buy products given that the additional subsidy and delayed compensation will eat into the working capital, making it hard to pay for the expensive fuel.

‘What this does is that the industry will plunge deep into chaos unless the government moves quickly and clears the money. The subsidy debt has deprived marketers of billions of shillings to pay for fuel and taxes, and this is seen in the erratic supplies,’ said another executive.

Oil marketers are waiting with bated breath to see the measures the government will deploy to lower pump prices within the next seven days.

Public service transporters, who led the nationwide strike on Monday, agreed to return to the road as talks

continue with the government over the costly fuel.

Transporters hiked fares significantly from last week in response to the spike in diesel prices and it remains to be seen whether they will lower the fares in the wake of Tuesdday’s move to suspend the strike.

The recent visit by the French president for the Africa Forward Summit sparked the usual flurry of diplomatic commentary.

It took me back to the 12th-century French word, franchir, meaning “to free”.

What if the key to taking Africa forward lies not in foreign treaties, but in freeing its own entrepreneurs from the one person holding them back, themselves?

In Kenya, as across much of Africa, we have a paradox.

The nation’s SMEs are the backbone of the economy. It contributes 34 per cent to GDP and 15 million jobs, yet this engine of growth still struggles to move forward. Over 80 percent of small businesses in Sub-Saharan Africa fail within their first five years, hitting an invisible ceiling that prevents them from scaling.

The cause is not a lack of ambition but invisible operational chaos.

The vision to execution gap and failure to translate a founder’s idea into scalable, repeatable outcomes. This gap, born from a weak foundation in governance and risk management, is the silent killer of scale.

From an investor’s perspective, the narrative continues with the founder’s dilemma. The choice between absolute control and funded growth. Too many founders choose control, creating a key-man risk.

As decision-making becomes centralised

in one person, it limits potential investment opportunities, particularly when boards which are often ceremonial lack the teeth to provide meaningful oversight and governance.

Well-meaning institutions have tried to intervene. The Nairobi Securities Exchange’s Ibuka Program, designed to prepare SMEs for public listing, has seen limited success. With an official recently admitting it “did not see the success it was meant to have.”

Why? Because a top-down program cannot fix a bottom-up problem. You cannot simply polish a company for public markets if its core is still stuck in operational chaos.

The solution, then, must come from within. It requires a mindset shift from “hustle” to “structure.” And the most powerful, yet underutilized, strategy for achieving this is the discipline of “franchisability.”

This isn’t necessarily about selling franchises. It is the process of developing a business model so well-documented, systemised, and repeatable that it could be successfully replicated by a third party. The discipline of building a “franchise-ready” business is transformative. It forces a founder to confront the root causes of their operational chaos.

The return of corporate deals, such as fresh listings at the Nairobi bourse, bond issuances and mergers and acquisitions, has seen increased demand for investment banking licences that brokers were dumping over five years.

The Capital Markets Authority (CMA) issued at least three new investment bank licences in the first quarter of 2026 to advisory firms and stockbrokerage firms upgrading their work permits.

This has triggered a shift in the licensing regime in a market that has demand for permits dominated by investors seeking fund management licenses on the back of pooled investments like money market funds (MMFs).

It also marked a reversal witnessed in the years between 2011 and 2019, where investment banking firms downgraded their licences to stockbrokers following a draught in deals amid higher permit fees.

But the return of the deals has made the market fertile, forcing advisory firms and stockbrokers to seek investment banking licenses-which they need to broker and guide deals.

The recent initial public offering of the Kenya Pipeline Company (KPC), which saw the first payout of a success fee to the lead adviser, and the issuances of corporate bonds by Safaricom, EABL and I and M, have signalled the ramp-up in deal activity for investment firms.

Investment banks cover a wider mandate, including advising on offers of securities to the public, corporate financial restructuring, takeovers, mergers, privatization and the underwriting of securities.

The institutions can also engage in the business of stockbrokers, a dealer and a fund manager of collective investment schemes.

‘Between 2019 and 2025, we did not see a lot of advisory transactions. Now we are seeing a lot of advisory opportunities returning,’ said Mr Eric Ruenji, the chairman of Theo Capital Holdings.

The drought in corporate deals coincided with the depths of the near decade-long bear market that began in 2015, sending stock prices and overall market enthusiasm lower.

The bear run was edged out in late 2024 as macro-economic stability gave rise to an equities rally and a rise in market interest. In the opening months of 2026, CMA dished out three new investment bank licences to firms including Rock Advisors, Victoria Wealth Management and Fintrust Securities.

This followed the issuance of a similar license to TPXM Global Kenya Limited in the third quarter of 2025.

Securities Africa Kenya Limited, now Capital A Investment Bank, also recently upgraded from a stock brokerage to an investment bank.

The issuance of the licences was amid a strong market performance for NSE equities, whose peak was defined by the public offering of KPC shares in March this year.

Corporate bond issuances have also taken hold, including medium note programmes (MTNs) by EABL, which raised Sh16.7 billion.

Safaricom, I and M Bank and the Kenya Mortgage Refinancing Company (KMRC) are some of the bonds that have also come to market in recent months, raising Sh19.9 billion, Sh13 billion, and Sh3 billion, respectively.

The frequency of the high-value deals are generating outsized advisory and performance fees.

The pipeline IPO, which raised Sh106.3 billion from the sale of the State’s 65 percent stake in the company, earned the Faida Investment Bank, who were the lead transaction adviser, a Sh1.16 billion bonus for hitting the target.

Fincorp Credit, the parent firm of Fincorp Securities, which is the latest firm to get the lucrative license, says the approval has been driven by clients’ demands for broader capital market solutions.

‘After being licensed as an authorized securities dealer in July last year, Fintrust Securities quickly discovered that customer appetite extended well beyond its initial offerings. From equities to money market products, demand for broader capital-market solutions was unmistakable,’ said Mr Gibson Wachaga, Fincorp Credit chief executive officer.

‘Securing the investment bank license is therefore both a response to market realities and a natural progression in Fincorp’s journey.’

Players like Kestrel Capital closed their investment banking section in 2021 to concentrate on the stock brokerage business amid the drought in advisory services.

This publication has confirmed that the stock brokerage is now working to regain the investment bank license as it sees a rise in corporate deals.

The push for the licence by Kestrel and peers will be incentivized by the recent revision in the minimum paid-

up capital of investment banks from Sh250 million at present to Sh150 million by December 2026.

Higher capital requirements at the start of the last decade in 2011 forced some players to revert to stock brokerages, while others applied to the CMA for the revocation of licences.

Investment banks like ApexAfrica Capital Limited, Afrika Investment Bank Limited, Drummond Investment Bank Limited, Kestrel Capital and Sterling Investment Bank downgraded their licenses after the minimum capital was raised from Sh30

million to Sh250 million.

Sterling Capital (formerly Sterling Investment Bank) has since reestablished itself as an investment bank. CMA has licensed 20 investment banks at present.

The National Social Security Fund (NSSF) is seeking a consultant to review the adequacy of its contribution rates and develop a framework for periodic revisions, signalling possible future changes to mandatory pension deductions for Kenyan workers and employers.

The NSSF, which is now Kenya’s largest public pension scheme managing billions of shillings in retirement savings, is seeking an actuarial firm to assess and advise on periodical adjustments to membership contribution amounts.

Search for the consultant comes months after the latest increment in NSSF contribution rates in February to a maximum of Sh6, 480 from Sh200 per worker in 2022. It will rise further to a maximum of Sh8, 640 next year.

The higher payouts have coincided with a five-year period that has seen salary increases lag inflation or cost of living measure.

The NSSF did not indicate if the review of the contributions will lead to an increase or a cut.

‘In order to comply with the provisions of the Retirement Benefits Act and to enhance the quality of the operational, financial, investment and solvency management of NSSF, the Fund invites proposals from actuarial firms interested in providing consultancy for actuarial and investment advisory services to the Board of Trustees,’ the fund said in the tender document.

The selected firm will also be required to provide advisory support to the Board of Trustees on financial and operational matters, including strengthening the fund’s capacity to monitor appointed fund managers, custodians, and other investment service providers.

The consultancy will further be expected to advise on key areas such as the interest rate credited to members’ accounts, the management of reserve funds, and the review of the fund’s broader investment policies and strategic asset allocation decisions.

The request comes at a time Kenyan workers are facing rising statutory deductions, including the housing levy and contributions to the Social Health Authority, which have collectively reduced disposable incomes for many salaried employees.

The NSSF Act of 2013, which had faced years of legal challenges from employers over its impact on payroll costs and take-home pay, was eventually rolled out in stages, culminating in higher monthly deductions for employees earning above set thresholds.

Under the revised structure, monthly contributions rose from Sh200 per month under the old regime to a maximum of Sh6,480 for employees in higher income brackets of more than Sh100,000.

Actuarial reviews are central to pension governance and typically assess whether current contribution rates are sufficient to meet future benefit obligations.

These assessments take into account variables such as life expectancy, wage growth, inflation, and expected investment returns, and may ultimately inform recommendations to increase, reduce, or maintain contribution levels.

Consistent review of contribution rates, according to NSSF, is intended to ensure the fund remains financially sustainable while fulfilling its mandate of providing income security in retirement.

Proponents of the higher NSSF rates reckon that they stand to ease the growing old age poverty.

Old age poverty has significant social implications in a country where the traditional patterns of the young caring for the old are changing.

Analysts point out that the relatively low number of Kenyans saving for pension and the value of payouts at retirement have compelled many retirees or those approaching the legal retirement age of 60 to continue working.

Kenya also suffers from low pension coverage with more than 70 percent of Kenyans retiring without a pension, save for the less than sufficient payout from the NSSF.

The NSSF’s monthly contributions stood at Sh400, including the Sh200 matched by the employers, for years and the fund on average paid out less than Sh250,000 when a member retired.

Kenyans on average are living longer and the rank of the elderly poor is rising as the traditional social fabric – which consisted of a large extended family to fall back on in the rural areas – yields to the forces of rapid urbanisation and changing social and family trends.

This is what prompted the State to start a monthly stipend of Sh2,000 for those above 70 years to cushion them from old-age poverty.

The consultancy could also pave the way for more structured and periodic reviews of contribution rates in future, potentially reopening debate over the balance between strengthening retirement savings and protecting

Every major infrastructure revolution eventually produces its gatekeepers. Railroads did. Oil did. Telecommunications did. The digital economy is unlikely to be different.

What changes across time is not the underlying pattern, but the form power takes. In the late 19th century, America confronted the dominance of railroads because they controlled the routes through which goods, people and markets moved.

A farmer, trader or manufacturer could be economically free in theory, but dependent in practice on the terms set by a dominant rail corporation. Standard Oil followed by consolidating control over the systems through which oil was refined, transported and distributed.

Later came AT and T and telephone networks. Then came Microsoft’s dominance in operating systems, which reshaped the entire software industry. In each case, the dominance was not only over a product, it was over the road to the customer.

The lesson here is not that large companies are automatically bad. Many became dominant because they built superior products, invested early and served customers efficiently. The problem begins when control over infrastructure becomes control over market access itself. That is the question now confronting the digital economy.

A small number of firms now sit at the centre of cloud computing, search, app distribution, online advertising, social media, digital payments and more recently, artificial intelligence. Google, Amazon, Apple, Meta and Microsoft do not just sell digital services. They shape the conditions under which other businesses operate. Kenya lives inside this reality.

A retailer depends on advertising systems whose pricing and rules it does not control. A media business depends on search rankings and recommendation algorithms it does not control.

A bank that runs a significant share of its retail flows is dependent on infrastructure controlled elsewhere in the market. An insurer building underwriting tools on an external cloud provider depends on systems, service terms and outage risks it does not control.

Businesses remain independent in law. They become dependent in operation. The November 2025 anti-trust case brought by the US Federal Trade Commission (FTC) against Meta illustrates how difficult it becomes to regulate digital dominance once markets begin shifting beneath regulators.

The FTC argued that Meta maintained monopoly power through anticompetitive acquisitions, most notably Instagram and WhatsApp.

Meta’s defence was revealing. The company argued the market the regulators were trying to define no longer existed in the form they had imagined. Facebook and Instagram, it maintained, now compete with TikTok and YouTube in a broader battle for attention shaped by short-form video and algorithm-driven content.

The court ruled in Meta’s favour, accepting that digital markets had evolved beyond the narrower ‘personal social networking’ market the FTC had attempted to isolate.

The deeper issue is that digital infrastructure shifts form faster than regulation adapts. Railroads, pipelines and telephone networks were relatively easy to identify. Digital systems are more fluid. Social networks become video platforms.

Search companies become AI companies. E-commerce firms become cloud providers. App stores become payment gatekeepers. Cloud firms become foundations on which AI systems are built. By the time regulators define the market, the market may already have moved.

Kenya should therefore not attempt to copy American antitrust law mechanically. Our institutions, markets and development priorities are different.

That notwithstanding, the historical pattern matters. Every major infrastructure revolution produces gatekeepers before law and policy effectively adapt. The response should be strategic preparedness, not hostility to technology.

Regulators will need the analytical capacity to understand switching costs, platform dependency, cloud concentration and data control as structural economic questions. Procurement officers should understand that adopting a cloud, payments or AI system is rarely just a purchase decision. It is often the beginning of a long-term operational dependency.

General counsel will need to read technology contracts the way previous generations read infrastructure concessions or joint-venture agreements.

The next generation of monopoly questions may not involve a single railway line or telephone network. They may involve quieter systems: cloud infrastructure, payment rails, recommendation algorithms, app permissions and AI models. These are harder to see and govern, which is precisely why they accumulate power.

For Kenya, the real test will be whether the country can build the legal, commercial and institutional capacity to manage dependency before it hardens into vulnerability.

History does not warn us against innovation, it warns us against discovering too late that the infrastructure of opportunity has become the architecture of control.

Banks are wooing customers with free interbank transfers of up to Sh1,000 and a flat Sh20 fee on higher-value transactions, in a fresh push to capture a bigger share of person-to-person payments.

The tariff represents a discount from the current charges of up to Sh250 that customers have been paying for Pesalink transfers, depending on the transaction value. The discounted price applies to any transaction from a participating bank to another bank, sacco or fintech wallet.

Pesalink CEO Gituku Kirika said 10 banks, including KCB Bank, DTB, SBM Bank Kenya and Ecobank, have so far agreed on the discounted tariff, with talks ongoing to onboard more in a development that is set to encourage more person-to-person deals.

The initiative, dubbed ‘Tuma Direct na Mbao,’ signals a coordinated effort by lenders to make bank-based transfers more attractive at a time when mobile money platforms continue to dominate everyday payments.

Mr Kirika said the pricing overhaul is part of a broader strategy to make digital payments affordable, predictable and easier for consumers.

‘We have been championing for a long time the reduction of the cost of payments and also the standardisation of it so that it is easier for consumers to understand what they are paying. We are talking to more players so that it becomes an industry-wide price that can ride on volumes,’ he said.

Other banks that have rolled out the discounted tariff are Paramount Bank, Credit Bank, Prime Bank, Credit Bank, Bank of Baroda and GT Bank. The arrangement has also attracted two microfinance banks (MFBs) namely Choice MFB and Caritas MFB.

Under the new model, transfers of up to Sh1,000 will be free, while any amount above that up to Sh999,999 will attract a flat Sh20 fee regardless of value. The new tariff will mark a shift from tiered pricing that has traditionally characterised bank transfers.

‘Today we see banks charging as high as Sh250 for a Pesalink transaction depending on the amount. So, coming down to a flat fee of Sh20 is a drastic reduction,’ Mr Kirika said.

The discounted tariff comes as banks seek to claw back transaction volumes from mobile money services, particularly in the person-to-person segment where convenience and cost have historically tilted the market in favour of Safaricom despite its much higher fees.

While Pesalink itself does not compete directly with mobile money providers, Mr Kirika noted that its participating institutions -including banks, Saccos, fintechs and telcos- are increasingly competing for the same customer transactions.

‘We are a switch that sits in the middle of the payments ecosystem. We are not in competition with mobile money players but our participants are. What we seek to do is to move money efficiently between all of them,’ he said.

Pesalink, operated by Integrated Payment Services Limited under the Kenya Bankers Association, has evolved into an instant payment switch connecting more than 195 financial institutions, including banks, saccos and fintech wallets. The platform is also expanding its reach to telcos as part of a broader push towards interoperability.

Currently, the system processes over one million transactions monthly, with the value of daily transactions being between Sh5 billion and Sh6 billion. The bulk of these transactions-more than 90 percent-remain within the banking sector, according to Mr Kirika.

‘Pricing is very critical to utilisation. When payments were zero-rated, we saw a significant increase in volumes, and when charges came back, growth slowed,’ he said.

Pesalink is also working to simplify transactions, particularly in addressing the complexity associated with bank transfers that require detailed account information.

Mr Kirika said Pesalink plans to roll out an enhanced service that will allow users to send money using familiar identifiers such as mobile phone numbers or identity card numbers instead of bank account details that are cumbersome to master.

‘When you are moving money into a bank account, you need a significant amount of information… We are going to enhance the service so that consumers can use something simpler like a phone number,’ Mr Kirika said.

Kenya’s pension industry is sitting on a financial powerhouse that could transform the country’s economy, but a substantial portion of it remains largely untapped for productive investment.

Today, pension assets in Kenya have grown to Sh2.81 trillion, equivalent to 16.05 percent of the country’s gross domestic product, according to the latest industry data from the Retirement Benefits Authority (RBA).

In 2025 alone, the industry added Sh554 billion in assets, reflecting annual growth of 25 percent. This growth has been driven by the savings of millions of Kenyan workers and continued implementation of the NSSF Act, which has steadily in-

creased contributions into retirement schemes.

But beneath this growth story lies a major structural imbalance. More than half of all pension assets, about Sh1.47 trillion or 52 percent of the industry portfolio, is invested in government securities. Another 18.6 percent sits in guaranteed funds.

But private equity accounts for only 1.1 percent of pension assets, despite regulations allowing schemes to allocate

up to 10 per cent to the asset class.

This means Kenya is leaving a massive investment opportunity on the table. Within the current regulatory framework alone, pension schemes could unlock an estimated Sh209 billion in additional investments into private equity and venture capital without changing any laws.

At a time when businesses are struggling with expensive credit, startups are fighting for survival and youth unemployment remains one of the biggest economic threats, this untapped pool of long-term capital could be one of the most powerful engines for economic transformation.

Globally, pension funds are increasingly being used as long-term growth capital to finance businesses, infrastructure and innovation. According to the International Monetary Fund, global pension savings reached $63.1 trillion by end of 2023,

nearly three times higher than two decades ago.

Countries that have successfully mobilised pension capital have demonstrated what is possible.

In Australia, pension assets are now larger than the country’s GDP and play a major role in financing infrastructure and private enterprise, according to Pension Markets in Focus 2024-2025 by Organisation for Economic Co-operation and Development (OECD).

In the United States, pension funds are among the largest institutional investors in venture capital and private equity, helping businesses scale into global companies.

Namibia introduced mandatory allocations to unlisted investments in 2014 and has since built a growing domestic private equity ecosystem.

Ghana has also expanded pension investment into alternative assets to support local economic growth.

The RBA data shows private equity investments grew by 49.2 percent in the second half of 2025 to reach nearly Sh30 billion. Pension schemes are already investing in strategic sectors through vehicles such as the Africa50 Infrastructure Fund among others.

At the same time, listed corporate bonds surged from Sh3.8 billion to Sh28.3 billion, driven largely by infrastructure-backed investments such as the LINZI Infrastructure Asset-Backed Security that is financing the Talanta Sports Stadium.

They show pension schemes are beginning to shift towards more productive long-term investments that support economic development while still generating returns for members.

Most alternative investment assets have room for growth under the current statutory limits; and this is where real opportunity lies.

Kenya’s pension industry is heavily concentrated in four traditional asset classes that account for more than 90 percent of all pension assets.

While government securities provide stability, excessive concentration limits the broader economic role pension capital can play. Long-term pension money is suited for sectors that require patient capital like manufacturing, affordable housing, agriculture, healthcare and clean energy.

Kenya’s pension industry is already financially stable enough to support prudent diversification.

The RBA report show that pension schemes currently maintain a liquidity ratio of 71 per cent, indicating strong capacity to meet short- and medium-term financial obligations.

Pension money should not simply sit on the sidelines financing government consumption while businesses struggle for capital. It should help finance industries, infrastructure, innovation and enterprises that create jobs and build long-term prosperity.