Microfinance Banks: Running Out of Steam

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It's Brian from The Kenyan Wall Street…

Here are some top stories we lined up for you today. We analyze how microfinance banks have performed over the years and why their future may not be bright. Also, we take a look at the growth of SACCOs amidst the surging distrust.

Microfinance Banks : Running Out of Steam 

By Harry Njuguna

Kenyan microfinance banks, once hailed as the bridge between the unbanked and formal finance, are limping through their second decade with little to celebrate. Balance sheets that once swelled with promise have withered, leaving the sector smaller today than it was at its peak. Lending has contracted, non-performing loans have climbed, and profits — when they appear at all — vanish almost as quickly.

Competition has only sharpened the decline, with fintechs, telecoms, and even government programs crowding into the very spaces microfinance was meant to dominate. Investors, eyeing the numbers, see more risk than reward, and shareholders’ capital has been steadily eroded. The picture, painted over ten years, is less of steady resilience than of a slow and grinding retreat.

The regulator now hints at a future where survival may come not from perseverance, but from transformation or consolidation.

Read more here >>>>>

SACCOs : A Trillion Shillings in Assets On Shaky Ground

By Fred Obura

Kenyans are entrusting Saccos with more money than ever, lifting the vehicle’s assets beyond KSh 1 trillion. But rapid growth has brought new strains: non-performing loans are rising, and the cracks exposed by KUSCCO’s troubles show how fragile confidence can be. What was once a story of cooperative resilience now carries the shadows of governance lapses and panic withdrawals. Regulators hope the Sacco Central will provide the glue to hold the sector together, but questions of accountability linger. For a system built on trust, its greatest test may be whether members still believe in it. Read more here >>>>>

Sumac’s Quiet Gamble in a Risk-Averse Market 

By Chelsy Maina

In a country where credit for small businesses is both desperately needed and perilously scarce, Sumac Microfinance Bank has secured another US$2 million lifeline, arranged by Noblestride Capital. The infusion pushes its total capital raised to US$7.5 million, a modest but pointed assertion of faith in microfinance at a time when the wider sector is bleeding losses. Read more here »»»»»

PARTNERSHIP : Capital Club East Africa, The Kenyan Wall Street Sign Deal to Drive Conversations on Economics and Finance

The Capital Club East Africa (CCEA), East Africa’s premier private Member’s club, and The Kenyan Wall Street (TKWS), Kenya’s fastest-growing news media brand for business and finance, have signed a strategic partnership to table the conversations that inform the decisions necessary to enhance Kenya’s economy. The two institutions will leverage their synergies in support of each other’s missions. This will include co-branded events such as closed-door roundtables and themed networking sessions. Read about it here »»»»»

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Real Estate 

Find Property Faster and Safer with Verified Agents

By Lulu Kiritu

House-hunting in Kenya often feels more like drudgery than discovery, with endless listings, fake contacts, and unanswered calls. BuyRentKenya’s updated Seeker Profiles aim to flip the process, letting buyers set their preferences upfront while verified agents bring the right options directly to them. Profiles are time-bound, phone-verified, and visible only to vetted professionals, cutting down on wasted effort and security risks. Agents, in turn, gain clearer insight into what clients actually want, making matches more efficient. The result is a leaner, safer property marketplace where quality matters more than quantity. Read more here »»»»»

Opinion 

The Success of Africa’s Energy Ambitions will Depend on a Skilled Workforce

By Cobus Van Schalkwyk

Africa’s energy ambitions are vast, but the continent’s real shortage isn’t megawatts —it’s engineers. Factories can be financed, grids can be built, and turbines can be imported, yet without the human skill to sustain them, the promise flickers. The gulf is visible in classrooms that empty before graduation, in apprenticeships too few for the demand, in governments chasing technology without tending to talent. South Africa’s global recognition under the Washington Accord shows what’s possible, but most of the continent still trains its future on fragile scaffolding. Read more here »»»»»

Also Read 

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♦️ Crime. A Kenyan citizen has been indicted in Minnesota for allegedly helping launder millions of dollars stolen from a U.S. child nutrition program

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♦️ Insurance. Kenya’s insurance industry recorded a sharp decline in reported fraud cases in the final quarter of 2024, as firms posted record profits.

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