Kenyan banks pushed a record amount of new credit into the economy in September, underlining a recovery in private-sector borrowing after the 2025 contraction.
Commercial banks disbursed Sh99.4 billion in loans that month, the highest monthly flow in at least five years and above the previous peak of Sh88.8 billion in May 2026, Business Daily and Kenyan Business Feed reported from Central Bank of Kenya data. Private-sector credit growth reached 10.6 per cent year on year, up from 10.3 per cent in August and a turnaround from a 2.9 per cent contraction in January 2025.
Cheaper loans, still not cheap
Average commercial bank lending rates fell to 14.4 per cent in September from a peak of 17.2 per cent in November 2024, improving affordability even after CBK paused further cuts to the Central Bank Rate. The policy rate has been held at 8.75 per cent since February, including at the October 7 Monetary Policy Committee meeting, Business.co.ke reported.
CBK said growth remained strong in trade, building and construction, agriculture, finance and insurance, and consumer durables. Broad money supply (M3) grew 11.3 per cent in September, which the central bank linked to the credit rebound.
Absolute credit flows had turned negative in some earlier months, including a Sh49.2 billion contraction in January 2025 when private-sector credit growth was minus 2.9 per cent.
Bad loans ease as books expand
The industry non-performing loan ratio fell to 13.9 per cent in September, described as a 44-month low in Business Daily’s account and down from 14.8 per cent in June and 17.6 per cent in August 2025 in Business.co.ke’s reading of MPC material. CBK attributed the improvement partly to lower NPLs in financial services, agriculture, trade, and energy and water.
Banks have signalled that borrowing costs could ease further if the interest-rate environment stays supportive, though September’s average lent rate edged up slightly from 14.3 per cent in August. Outstanding private-sector credit was about Sh4.29 trillion in June 2026, with double-digit growth continuing into the third quarter.
Credit officers, relationship managers and risk analysts remain in demand as lenders rebuild books; openings across the sector are listed on Job in Kenya.
Sources: Business Daily | Kenyan Business Feed | Business.co.ke
Photo: Omar David Sandoval Sida / Wikimedia Commons (CC BY-SA 4.0)
