A new report reveals that Microfinance Banks (MFBs) in Kenya are facing significant financial challenges, collectively recording a loss of Ksh3.5 billion before tax in 2024. This downturn sparks concerns about the future of a sector crucial for financial inclusion.

• Out of 14 licensed MFIs, only four posted profits, with three institutions accounting for over Ksh2.7 billion of the sector's losses.
• Poor performance is attributed to a 12.1 percent drop in total income and a 16 percent reduction in net lending, falling to Ksh31.2 billion in 2024.
• Conversely, Digital Credit Providers (DCPs) have rapidly expanded, with licensed DCPs more than doubling from 32 to 85 in 2024, and gross loans surging by 91 percent to Ksh55.2 billion.