Updated 1 November 2026
A loan against shares in Kenya lets you borrow from a bank using shares you own on the Nairobi Securities Exchange as security, without selling them. The shares are “pledged” (frozen in your CDS account in the lender’s favour) through the Central Depository and Settlement Corporation (CDSC), which charges KSh 1,000 per pledge form, and they are released once the loan is repaid. This guide explains how the process works, what it costs, who accepts shares as security and the risks if prices fall.
Updated 1 November 2026 from CDSC’s published fees and lender product pages.
How a loan against shares in Kenya works
- You hold shares in your own CDS account. Shares bought through some apps sit in a broker’s nominee account and cannot be pledged in your name. Buy through a broker into your own account; see how to buy shares on the NSE.
- The lender values the shares at market price and lends a percentage of that value (the “loan-to-value”). Lenders set their own percentages and usually lend less against volatile or thinly traded shares.
- You sign a pledge form. The pledge is lodged with CDSC, which electronically marks the shares as pledged. CDSC describes this as “electronic marking and release of pledged securities within the depository system”.
- You keep ownership. The shares stay in your name and you still receive dividends, but you cannot sell or transfer pledged shares until they are released.
- Repay and release. When the loan is cleared, the lender releases the pledge and the shares become freely tradable again.
What it costs
| Cost | Amount | Source |
|---|---|---|
| CDSC pledge or release | KSh 1,000 per form / pledge number | CDSC fees page |
| CDSC withdrawal | KSh 500 per account | CDSC fees page |
| Interest | Set by the lender; e.g. 13% reducing balance on Co-op Bank’s Club Special Loan | Co-op Bank product page |
| Appraisal fee | Set by the lender; e.g. 3% on the Club Special Loan | Co-op Bank product page |
Ask the lender for the total cost of credit in writing, including legal and valuation fees, and run the repayment through our loan affordability calculator.
Which lenders accept NSE shares as security
Most Kenyan banks will consider listed shares as collateral on a case-by-case basis. One product page that lists them explicitly is Co-operative Bank’s Club Special Loan for chamas and investment clubs. Its security list includes “Shares quoted in the Nairobi Securities Exchange”, alongside cash, property, Treasury bills and bonds. The loan goes up to KSh 50 million or five times the group’s savings, at 13% on a reducing balance with a 3% appraisal fee. The page gives the repayment period as up to 72 months in its features but 60 months in its fact sheet, so confirm the tenor with the bank. If your chama holds a share portfolio, compare it with other options in best bank for chamas in Kenya.
Individuals should ask their own bank’s personal or premium banking desk about “lending against listed securities”. Pledges are recorded at the depository, which is separate from the movable-asset register discussed in our guide to the electronic collateral registry.
The big risk: falling share prices
If the shares fall in value, the loan-to-value rises. Loan agreements usually let the lender ask you to top up with cash or more shares (a “margin call”) and, if you cannot, to sell the pledged shares to recover the debt. Before pledging:
- Borrow well below the maximum so a price drop doesn’t trigger a top-up demand.
- Prefer pledging large, liquid shares; see companies listed on the NSE by sector.
- Read the default and sale clauses carefully.
Share-backed loan vs securities lending
CDSC also runs Securities Lending and Borrowing, where you lend your shares to a borrower for a fee. That is different: in a share-backed loan you borrow money and pledge shares; in securities lending you lend the shares themselves.
Frequently asked questions
Can I get a loan against my NSE shares in Kenya?
Yes. Banks can accept listed shares as security. The shares are pledged through CDSC and released when you repay.
How much does CDSC charge to pledge shares?
KSh 1,000 per form or pledge number, according to CDSC’s published fees.
Do I still get dividends on pledged shares?
Yes. Pledged shares remain in your name, so dividends are still paid to you unless your loan agreement says otherwise. You cannot sell them until they are released.
What happens if I fail to repay a share-backed loan?
The lender can enforce the pledge, which normally means selling the shares to recover what you owe, subject to the loan agreement.
Sources: CDSC fees and CDSC services; Co-op Bank Club Special Loan. Read 1 November 2026.
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