68% of Kenyans Shelve Plans to Take Bank Loans - Report

Hello and welcome to the Money News Roundup Newsletter. Today, we’re covering the new bank loan trends and the completed Kenya Railways train service linking SGR and Mombasa town.

68% of Kenyans Shelve Plans to Take Bank Loans - Report

More than two-thirds of Kenyans have abandoned plans to take new loans this year, mainly due to high borrowing costs. A TransUnion survey shows that 68% of adults have shelved plans to apply for loans.

As reported by the Business Daily, high borrowing costs remain the top reason, cited by 42% of respondents—an increase from 41% the previous year. Other concerns include access to alternative funding and fear of rejection due to income or employment status.

This trend continues despite the Central Bank Rate (CBR) falling from 13% to 10% over the past year. However, average lending rates have only slightly decreased, from 16.6% to 15.65%, showing slow adjustments by commercial banks.

The survey also highlights growing sensitivity to interest rates, with 61% of Kenyans saying rising rates strongly influence their credit decisions.

Kenya Railways Unveils New Features for Completed Mombasa SGR Link Train

Kenya Railways has announced the introduction of ‘park and ride' and ‘drop and ride’ options as part of the newly completed Mombasa Commuter Rail Service linking Mombasa Town and the SGR station.

As reported in the Star, the feature provides parking for over 100 vehicles and targets more than 1,000 daily passengers. 

The link train timetable has also been aligned with the Madaraka Express, ensuring smooth last-mile connections between Miritini and Mombasa town.

The completed project includes modern stations in Mombasa and Miritini, rehabilitation of 16.6km of Metre Gauge Railway, and construction of a 2.3km Makupa railway bridge. Two more stations are planned in Changamwe.

Transport PS Mohamed Daghar said operations will begin soon after successful test rides, noting the service will reduce travel time, ease congestion, cut emissions, and improve commuter safety and reliability.

Kenya Slapped With Ksh4.9B Interest Over Delayed Payments to Contractors 

A new report by Auditor General Nancy Gathungu shows that Kenya was slapped with Ksh4.9 billion interest payments due to delays in paying contractors tasked with undertaking a number of infrastructure projects.

According to People Daily, a large portion of interest charges—totaling Ksh930.6 million—stemmed from pandemic-related projects. This includes interest accrued on payments made by the African Vaccine Acquisition Trust (AVAT) to a vaccine manufacturer for 13.3 million doses arranged under a delivery agreement.

Several infrastructure projects also recorded high interest costs. The Mombasa-Mariakani Highway Project incurred Ksh856.7 million in interest charges. Similarly, the Sirari Corridor Accessibility and Road Safety Improvement Project paid Ksh657 million.

Additionally, the Kenya National Highways Authority was fined Ksh24.9 million for the delayed payment of an interim certificate to a consultant on the Kenol-Sagana-Marua Highway improvement project.

Kenya Plans Bond Buyback to Ease Debt Strain

Reuters is reporting that Kenya is considering buying back maturing local bonds using proceeds from new, longer-dated bond sales, as part of efforts to ease pressure on public finances, a source familiar with the plan said. The bond buyback amounts will be set case-by-case, based on market conditions and financing priorities.

This year alone, Kenya faces local bond maturities totaling Ksh495 billion ($3.84 billion), according to LSEG data. The figure is set to rise to Ksh822 billion in 2026. The mounting obligations come after years of heavy borrowing for infrastructure since 2013.

The strategy shift aims to improve the country’s debt maturity profile. Kenya previously faced pressure ahead of a $2 billion Eurobond repayment in June 2024, which caused the shilling to hit record lows until a new Eurobond was issued.

Meanwhile, the Business Daily reported that the government has launched a Ksh50 billion tap sale of oversubscribed August infrastructure bonds after the entire Ksh95 billion raised was used to repay a maturing two-year bond.

The tap sale follows a primary sale of reopened 15-year and 19-year bonds issued at coupon rates of 12.5% and 12.96%, respectively.

Safaricom to Change Billing System for Internet Users

Safaricom is set to overhaul its data billing model by replacing bundles measured in MBs and GBs with time-based bundles. Under the new system, customers will be charged according to how long they stay connected to the internet rather than the volume of data consumed.

This shift favors heavy users who stream or download large files, as they can maximize data usage within the set time. However, light and casual users—who mainly check emails or messaging apps—may end up paying more since idle time still counts. Read more here.

KCB Eyes Ethiopian Market in Expansion Strategy

KCB Group has entered talks to acquire a bank in Ethiopia as part of its strategy to grow and diversify regionally. 

As reported in the Business Daily, the move follows Ethiopia’s decision to open its banking sector to foreign lenders, allowing them to operate, invest, and establish subsidiaries.

The Kenyan lender aims to become a major player in Ethiopia’s market, which the state-owned Commercial Bank of Ethiopia currently dominates. KCB will partly fund the acquisition using proceeds from its sale of the National Bank of Kenya (NBK) to Nigeria’s Access Bank.

Ethiopia’s banking sector had remained closed to foreign investors until December, when new laws permitted external ownership, capped at 40%. 

Bolt Introduces Dash Cam App for Drivers

Taxi-hailing company, Bolt, has launched dashboard cameras to record both the interior and exterior of vehicles during trips.

As reported by the Kenyan Wall Street, the move will provide clear evidence in driver-passenger disputes.

This initiative is in partnership with Driver Technologies, whose app transforms phones into dash cams, capturing videos inside and outside the vehicle simultaneously.