Kenya’s banking sector more than doubled its MSME lending target in 2025, disbursing KES326.5 billion ($2.53 billion) in new loans to small and medium-sized businesses, far exceeding the annual target of KES150 billion ($1.16 billion).

The performance signals a growing shift by lenders to position the MSME segment as a core growth frontier. Data published by the Kenya Bankers Association ranks the top 10 banks by MSME loan disbursements as of December 2025.

The lending surge comes amid one of Africa’s most sustained monetary easing cycles. Last year, the East Africa largest economy, cut its benchmark interest rate by 175 basis points to 9.0 percent in December from 10.75 percent in February. Inflation remained within the target band, averaging 4.04 percent for the year, while the shilling was broadly stable at around 129 per dollar. The easing cycle extended into 2026, with the Central Bank of Kenya lowering its benchmark rate by a further 25 basis points to 8.75 percent in February, marking the 10th consecutive rate cut.

Equity Bank, one of the country’s largest lenders, ranked first with KES90.7 billion ($703 million) in MSME loans—nearly 28 percent of the industry total and more than 1.6 times the volume disbursed by the second-ranked lender. KCB Group followed with KES56.2 billion ($435 million), while Co-operative Bank placed third with KES37.6 billion ($292 million). Stanbic Bank and Family Bank ranked fourth and fifth with KES32.68 billion ($253 million) and KES31.97 billion ($248 million), respectively, highlighting the strong performance of mid-tier lenders with a strategic focus on MSMEs. I&M Bank came sixth with KES26.3 billion ($204 million), followed by Kingdom Bank at KES9.80 billion ($76 million). Absa Kenya, National Bank, and Sidian Bank rounded out the top 10, disbursing KES6.39 billion ($50 million), KES5.75 billion ($45 million), and KES5.47 billion ($42 million), respectively.

The industry’s ability to surpass its KES150 billion target by more than double underscores the growing importance of MSMEs to Kenya’s credit ecosystem, although it remains unclear whether the initial target was conservative or whether improved credit infrastructure and policy support drove the outperformance. Still, KES326.5 billion flowing into small businesses within a single year represents a significant boost for an economy where MSMEs account for the bulk of employment. Notably, the inclusion of Family Bank and Kingdom Bank in the top tier reflects the payoff from their long-standing focus on MSME and cooperative lending segments.