Local Banks Increase SME Loan Approvals in Nairobi

14 October 2025 – Local banks operating in Nairobi have significantly increased their lending to small and medium-sized enterprises (SMEs), driven by stronger credit demand and targeted support programmes. According to the Central Bank of Kenya’s 2024 survey on MSME access to bank credit, active loan accounts in the sector reached 1.18 million as at December 2022, valued at KSh 783.3 billion — a marked improvement from previous years.
Financial institutions cite multiple factors behind the uptick in approvals: banks are strengthening their SME-lending divisions, expanding tailored credit products, and responding to county-level incentives to formalise micro-businesses. Moreover, recent data suggest that the banking industry has already surpassed its annual MSME lending target by disbursing KSh 153 billion this year, according to the Kenya Bankers Association (KBA). Even as interest income from SME loans rose — from KSh 79.1 billion in 2022 to KSh 91.8 billion in 2024 — the improved credit access signals a more proactive approach by lenders toward Nairobi’s vibrant SME landscape.
Business owners in Nairobi are responding positively: many report that accessible capital is enabling expansion of operations, purchase of new equipment, and tapping into digital commerce channels. However, challenges remain—collateral requirements remain high and non-performing loans among SMEs rose to KSh 149.8 billion in 2024, underscoring the need for sound credit risk management. Looking ahead, analysts believe that with continuing policy support, streamlined documentation and improved lender-SME education, Nairobi’s SMEs could unlock even greater funding, fuelling job creation and economic growth across the capital region.