Why Banks Have Cut Down on Issuing Personal Loans to Kenyans 

Hello and welcome to the Money News Roundup, where we are covering the reduced lending by Kenyan banks and the National Treasury warning over an investment scam promising returns in 2 hours.

Banks Cut Personal Loans by Ksh138 Billion in 2024

Kenyan banks have significantly cut personal and household lending for the first time in seven years, driven by rising defaults and high interest rates. 

As reported in the Business Daily, the Central Bank of Kenya (CBK) reports that the value of personal loans fell by Ksh138 billion to Sh943.84 billion in 2024, down from Ksh1.082 trillion in 2023. 

Loan accounts under households also dropped by 1.42 million to 10.72 million, compounding a 1.55 million decline recorded in 2023.

This decline coincided with growing financial strain on workers, many of whom failed to meet the legal requirement to retain a third of their salary after deductions for the universal health coverage (2.75%) and housing levy (1.5%). 

Personal and household credit, which makes up 92.6% of all loan accounts, was the only sector to record a drop in both volume and value.

The Kenya Bankers Association attributed the shift to rising non-performing loans (NPLs), prompting banks to favour secured lending over unsecured personal loans. Defaults in this segment rose to Ksh100.97 billion in 2024, or 10.7% of the loan book.

Meanwhile, banks maintained lending to sectors like agriculture and real estate, backed by strong collateral such as land, despite a persistently high Central Bank Rate of 13%

Auditor General Exposes Civil Servants Receiving Double Salaries

Auditor General Nancy Gathungu has revealed that some civil servants are illegally drawing salaries from both national and county governments. 

As reported in The Star, a special audit covering financial years 2021–2022 to 2023–2024 found employees listed on multiple public payrolls, violating Article 77 of the Constitution and the Leadership and Integrity Act.

In Kwale, a TSC-employed teacher was paid Ksh625,520 by the county for over eight months before deserting duty. In Vihiga, a county employee also earned from TSC, receiving Ksh156,150. 

Similar cases were found in Mandera, Machakos, Trans Nzoia, Kitui, Kiambu, and other counties. The Ethics and Anti-Corruption Commission has termed the double employment unethical, especially as many qualified Kenyans remain jobless.

Treasury Warns Kenyans Over Investment Scam Promising Returns After 2 Hours

The National Treasury has warned the public against a fake investment scheme circulating online, falsely using its name. The scam promises guaranteed returns within two hours through supposed investments in Treasury Bills, Bonds, Infrastructure Bonds, and crypto-related products. 

As detailed by Kenyans.co.ke, the fraudulent notice, widely shared on September 1, also advertised "Online Investment Sessions" allegedly endorsed by the Treasury. 

It claimed that investing between Ksh10,000 and Ksh50,000 would yield fast profits, with the highest hitting Ksh350,000.

Treasury has denied any involvement, stating no such investment exists or has been approved by the Ministry. Therefore, Kenyans were urged to ignore the notice.

DCI to Investigate Health Facilities Over SHA Fraud 

As reported in Citizen Digital, the Directorate of Criminal Investigations (DCI) is set to probe health facilities across the country following reports of fraud and regulatory violations.

Health CS Aden Duale revealed that a forensic audit by the Social Health Authority (SHA) uncovered widespread malpractice, including falsified medical reports, upcoding, billing for ghost patients, and converting outpatient visits into inpatient claims. 

As a result, SHA has suspended 85 facilities involved in the fraudulent activities.

Equally, the Kenya Medical Practitioners and Dentists Council (KMPDC) closed 544 unlicensed facilities and revoked licenses of 454 others for operating below standard, employing unlicensed staff, and lacking critical infrastructure.

CS Duale warned that any facility, doctor, or patient found culpable will face legal action. 

Govt to Rank Hospitals in New Quality Scoring System

In the other health-related stories, the Business Daily reported that Kenyans will soon be able to compare hospitals based on quality scores, under a new government proposal aimed at improving healthcare standards. 

The Quality Healthcare and Patient Safety Bill, 2025, introduces a star-rating system—similar to hotel ratings—to assess hospitals on service delivery, patient safety, staffing, and equipment. 

Rankings will be published by the Health Standards and Quality Assurance Authority, helping citizens make informed choices.

Foreign Investors Return to NSE as Trump Tariff Worries Ease

Foreign investors made a net purchase of Ksh1.6 billion at the Nairobi Securities Exchange (NSE) in August — the highest in four years.

This surge was driven by easing fears over US-imposed tariffs and expectations of US interest rate cuts. Analysts say reduced global uncertainty and positive IMF growth projections have boosted investor confidence.

The inflows were mainly directed at large-cap stocks like banks, Safaricom, and EABL due to their strong dividend history and high liquidity, allowing flexible entry and exit for investors. Read more here.

Meanwhile, the Business Daily also reported that increased trading in bonds and securities at the Nairobi Securities Exchange (NSE) drove stockbrokers’ and investment banks’ net profits up by 156% to Ksh1.1 billion in the half-year to June 2025. 

This surge, fueled by a 78% rise in bond trades to Ksh1.31 trillion and an 18% jump in equity turnover to Ksh56 billion, led to brokerage commissions growing by 49% to Ksh1.46 billion.

With most earnings drawn from commissions, brokers now eye their best returns since 2015, should the momentum hold into the second half of the year.