Private Sector Credit on the Crutches...

In today’s newsletter, the banking sector is caught in a tightening clamp, with private sector lending stalling under high interest rates even as bad loans surge past KSh 724 billion, outpacing new credit for a fifth straight quarter.

I am Brian from The Kenyan Wall Street and these are our day's business stories:

Private Sector Credit On the Crutches…

Private sector lending slows as non-performing loans surge to historic levels, exposing banks to rising credit risk.

By Harry Njuguna

The Kenyan private sector is entering a period of visible strain as bank lending weakens and defaults surge to levels not seen in over a decade, signaling both tightening credit conditions and heightened systemic risk.

Between January and April 2025, total credit advances slipped 0.88% year-on-year to KSh 15.32 trillion, reversing last year’s momentum, even as April alone posted a marginal uptick that was insufficient to offset a sluggish first quarter.

Beneath the surface, sectoral performance paints an uneven picture: agriculture and consumer durables saw notable gains, while core economic engines like manufacturing, transport, finance, and business services contracted, reflecting cautious bank behavior and weaker enterprise demand.

In this environment, the banking system faces the dual challenge of sustaining credit growth while navigating the most hostile default landscape in years. Continue reading here >>>>>

A Season of Bad Loans 

Kenyan banks face record-high NPLs as bad debt outpaces lending for a fifth straight quarter.

By Harry Njuguna 

The banking sector is grappling with an alarming rise in bad loans, as gross non-performing loans (NPLs) climbed to a record KSh 724.2 billion in April 2025, growing faster than total lending for the fifth quarter in a row. 

In just four months, NPLs jumped by KSh 51.6 billion, outpacing the KSh 49.8 billion expansion in gross loans and driving the sector’s NPL ratio to 17.6%, its highest level in a decade. The pace of default accumulation is accelerating, with early 2025 seeing a 71% faster build-up than the same period in 2024, underscoring persistent stress among borrowers despite modest loan growth.

This imbalance highlights a troubling disconnect: even as banks cautiously increase lending, the surge in defaults signals eroding borrower capacity and deepening structural risk. The trend has stark implications for the financial system, raising the specter of higher provisioning costs, pressure on capital buffers, and tighter credit conditions for an already strained private sector. Continue reading »»»»»

There are no tax Exemptions - Court to Expressway Contractor

The High Court upholds KSh 6.9 billion KRA demand against Nairobi Expressway subcontractor.

By Brian Nzomo 

Cale Infrastructure Construction Company Ltd has hit a legal dead end after the High Court upheld a KSh 6.92 billion tax demand from the Kenya Revenue Authority over the Nairobi Expressway project.

The subcontractor claimed its tax exemptions for imported machinery, tools, and materials remained valid because the project lacked a performance certificate, but the court ruled that there was evidence that the exemption period had ended.

With the appeal dismissed in full, Cale must shoulder the multi‑billion‑shilling assessment, underlining the risks construction firms face when tax exemptions collide with project timelines. Continue reading »»»»»

Capital Markets 

🧾 Buying NSE Stocks in Kenya: Beginner’s Guide

By Sylvia Jemutai

Thinking about buying stocks on the Nairobi Securities Exchange but not sure where to start? This beginner-friendly guide walks you through opening a CDS account, picking a licensed broker, and buying your first shares with as little as KSh 1,000. You’ll also learn how to avoid common rookie mistakes and build smart habits that grow your portfolio over time. Read the full guide here »»»»»

NSE Gainers & Losers 

Also Read 

Opinion 

💱 What Kenya Can Learn from Switzerland’s Thriving Innovation Economy

By Nicasio Karani Migwi

Kenya dreams of becoming an innovation-driven economy, yet it remains tethered to commodities and a manufacturing sector that can’t shake its 7% share of GDP. A new Global Innovation Index ranking, where Switzerland leads the world and Kenya languishes at 96th, exposes the yawning gaps in institutions, research, and market sophistication. Universities and R&D labs are underfunded, patents and tech exports remain rare, and the country’s creative economy is still a whisper rather than a voice. But the blueprint exists: invest in human capital, stabilize policy, and ignite local startups from Nairobi to Konza. If Kenya can align its strategy with action, it might yet leap from extraction to innovation. Read the full piece here »»»»»

Stories you missed 

♦️ Tech. The smart city project, Konza technopolis, is sitting on billions of shillings in idle technology equipment as major infrastructure projects drag on, according to a review by the Auditor General.

♦️ Capital Markets. Both of Acorn’s student housing REITs’ reported higher net profits, rental income growth, fair value gains, and improved portfolio metrics in the first half of 2025.

♦️ Real Estate. Landlords are increasingly holding off on raising rent prices in response to a more cautious tenant market, according to Property Price Index for the second quarter of 2025.

On your watchlist

Keep up with what’s happening on our X and LinkedIn pages. Stay updated with the latest financial news on our website The Kenyan Wall Street.