Kenya SMEs face credit squeeze as new financing options emerge

Small and medium-sized enterprises (SMEs) in Kenya are facing a tightening credit environment. According to the Central Bank of Kenya, the number of MSME loan accounts in the banking sector fell from 1.18 million in 2022 to 890,000 in 2024, while their share of total banking sector loan accounts decreased from 8 per cent to 6 per cent.

To address these financing gaps, Ngao Credit has introduced the Jijenge 90-Day Supplier Loan. This facility offers between Ksh100,000 and Ksh4 million to help businesses fulfill confirmed tenders and supply orders by providing necessary working capital. The loans are secured by vehicles and are designed to help businesses meet contractual obligations before receiving customer payments.

In a separate development, NCBA and HEVA Fund have launched a KES 20 million unsecured loan pool specifically for the Kenyan creative industry. Known as the Start-Up Incubator facility, it offers loans for up to six months at a 9% interest rate. This rate is significantly lower than the commercial banks’ weighted average lending rate of 14.39% reported by the Central Bank of Kenya in July 2026. The facility is available to individuals and registered SMEs within the creative value chain and requires no collateral.