Kenyan firms rely on own funds as credit costs stay high
NAIROBI, Kenya, Oct 20 - More Kenyan companies are turning to internal financing to fund operations and expansion projects amid high borrowing costs and Kenya breaking news | Kenya news today |..
✨ Key Highlights
Kenyan companies are increasingly relying on internal funds for operations and expansion due to high borrowing costs and strict lending conditions, according to a recent Central Bank of Kenya (CBK) survey.
- The September 2025 CEOs Survey indicates firms are prioritizing their own resources over bank loans, despite a slight drop in lending rates since August 2024.
- The CBK noted that banks remain risk-averse, viewing Small and Medium-sized Enterprises (SMEs) as high-risk borrowers.
- 78 percent of firms have adopted technology and automated key operations in the past year, with the ICT, manufacturing, and financial sectors leading this digital transformation.
- Despite funding constraints, business leaders are optimistic about 2026, expecting growth driven by innovation and market expansion, while acknowledging challenges like high operational costs and weak demand.
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CBK Revokes PayU Kenya's Licence as High Credit Costs and New Lenders Affect SME Financing - October 2025
The Central Bank of Kenya (CBK) has revoked PayU Kenya Limited's payment operating licence, effective October 13, 2025, after the company entered liquidation in August 2025. This move by the CBK marks the end of the firm's efforts to penetrate Kenya's e-commerce gateway market. Concurrently, a recent Central Bank of Kenya survey has shown that Kenyan companies are increasingly relying on internal funds for operations and expansion due to high borrowing costs and strict lending conditions. In this environment, global microfinance group Advans is expanding into East Africa, specifically targeting Kenya. The group plans to support small and medium enterprises (SMEs) with data-driven lending solutions, aiming to bridge the significant financing gap for small businesses.
