Kenyan Banks Disburse Sh245 Billion to MSMEs Amid Rising Demand for Credit

Kenyan banks extended a total of Sh245.1 billion in loans to micro, small, and medium enterprises (MSMEs) during the first half of 2026, reflecting a strong appetite for business credit across the sector.

According to data from the Kenya Bankers Association (KBA), this lending formed part of the broader Sh1.1 trillion in total financing disbursed by financial institutions over the period.

Top Lenders and Loan Types

• Equity Bank led MSME lending with Sh82.3 billion issued.
• Co-operative Bank followed with Sh32.4 billion, and KCB Bank disbursed Sh26.4 billion.
• Other notable banks included Family Bank (Sh21.6 billion), NCBA (Sh17.7 billion), I&M Bank (Sh13.9 billion), and Absa Bank Kenya (Sh12.9 billion).

Working capital loans accounted for the largest portion at 47.3%, followed by business expansion loans at 26.5%, and trade finance facilities at 26.2% of total MSME lending.

Gender Disparities in Financing

The report highlighted a persistent gender gap in access to credit. Male-owned enterprises received nearly half (49.5%) of the total loan value, equivalent to Sh527.82 billion, while women-owned businesses were allocated just 19.5%, or Sh207.72 billion.

This means for every Sh1,000 lent to male-led businesses, women-led enterprises received only about Sh394, underscoring ongoing challenges for female entrepreneurs seeking financing.

Sectoral and Regional Lending Patterns

• Trade was the leading sector, accounting for 25% of MSME loans.
• Manufacturing followed with 18.2%, and agriculture accounted for 7.3%.
• Transport and communications made up 5.6%, while building and construction represented 4.1%.

In terms of location, Nairobi dominated county-level MSME lending with Sh273.28 billion, well ahead of Mombasa (Sh29.28 billion) and Nakuru (Sh18.35 billion).