Nairobi’s Banking Sector Reports Higher Loan Uptake
Nairobi’s banking sector is experiencing a significant surge in credit uptake, with latest Central Bank of Kenya (CBK) data showing a 22% year-on-year increase in loan disbursements to businesses and individuals within the capital. This upward trend, recorded in the third quarter of the year, signals growing business confidence and increased consumer spending power, reversing a previous period of credit constraint. The growth is particularly pronounced in lending to small and medium enterprises (SMEs), the personal and household sector, and building and construction, indicating broad-based economic activity.
Banking executives attribute this positive performance to a more stable macroeconomic environment, competitive interest rates, and the growing adoption of digital lending platforms that have made credit more accessible. The CBK’s hold on its benchmark rate has provided the predictability that both lenders and borrowers need for long-term planning. We are seeing a robust demand for credit across the board. SMEs are borrowing to expand operations and restock inventory, while individuals are taking loans for home improvement, education, and asset financing. This is a clear vote of confidence in Nairobi’s economy, said James Mwangi, CEO of Equity Group, which reported a substantial increase in its loan book.
The sentiment is echoed by businesses on the ground. A cross-section of SMEs in Nairobi’s industrial area and the central business district confirmed they are now more willing to take on debt to finance growth, a stark contrast to the post-pandemic risk aversion. Access to a bank loan allowed me to purchase two more delivery vans and double my client base. The repayment terms are manageable, and the growth in my business makes the debt service worthwhile, said Grace Mwende, who runs a logistics company in Embakasi.
Financial analysts caution that while the increased lending is a positive indicator, banks must maintain prudent credit assessment standards to prevent a buildup of non-performing loans. The CBK has affirmed its commitment to monitoring the sector’s stability. This credit growth is encouraging as it fuels economic expansion. Our role is to ensure that this growth is sustainable and that lending standards are not compromised in the pursuit of market share, noted CBK Governor Dr. Kamau Thugge. If sustained, this trend in loan uptake could provide the necessary capital to propel Nairobi’s economic recovery and support its ambitious development goals.