Kenyan borrowers could be entering a period of cheaper access to credit, with Trade Cabinet Secretary Lee Kinyanjui saying some commercial banks have reduced their lending rates to as low as 12 per cent from the 18 to 19 per cent levels recorded two to three years ago.

The reduction marks a significant change in the country’s borrowing environment, particularly for businesses and individuals who have struggled with expensive loans, high monthly repayments and limited access to financing.

Speaking during a radio interview on Tuesday, November 3, 2026, Kinyanjui attributed the decline to what he described as prudent fiscal management, arguing that improved management of public finances had helped reduce pressure on borrowing costs.

He said the lower rates had made it easier for Kenyans to obtain financing from commercial banks, adding that the country had enough money within its financial system to support businesses looking to expand and investors seeking capital for new projects.

“Just about two, three years ago, you will recall that the average interest rate that you needed to pay for you to borrow money was in the range of 18, 19 and so on. But through prudent fiscal management, that number has come down and some banks are actually lending at about 12 per cent,” Kinyanjui said.

The CS maintained that access to financing was increasingly becoming less of a challenge for borrowers with sound credit histories. He argued that Kenyans who demonstrate an ability to repay their loans can approach both local and international financial institutions operating in the country.

However, the 12 per cent figure refers to rates offered by some banks and should not be confused with the average lending rate across the entire banking sector.

Bank deposits rise as Kenyans save more

The availability of money in the banking sector was another factor Kinyanjui cited when explaining the changing lending environment.

He said deposits in Kenyan banks increased by nearly 9.9 per cent in the previous year, partly driven by money sent home by Kenyans living and working abroad.

According to the CS, more Kenyans in the diaspora were choosing to keep their savings in local financial institutions, giving banks a larger pool of money that could be used to finance individuals and businesses.

The banking sector’s deposits reached Ksh6.38 trillion in 2025, reflecting the growth in funds held by financial institutions.

However, increased deposits do not automatically translate into cheaper loans for every customer. Banks still assess borrowers based on their income, credit history, collateral, repayment capacity and the risks associated with lending to them.

For businesses, the cost of borrowing determines how easily they can purchase equipment, increase stock, open new branches or finance expansion. Lower interest rates can reduce the amount paid to banks over the repayment period, although the final cost also depends on loan fees, repayment duration and individual lending terms.

Kinyanjui also pointed to the presence of international banks in Kenya as an indication of confidence in the country’s financial market. He maintained that borrowers with good credit records could seek financing from both local and foreign financial institutions operating in the country.

Beyond the banking sector, the Cabinet Secretary highlighted Kenya’s geographical position as an advantage in attracting international investors.

He said the country’s proximity to the Middle East and connections to Europe and the Far East created opportunities in manufacturing, refining and logistics.

Kinyanjui singled out the ports of Mombasa and Lamu, saying they had the potential to become major transhipment centres serving international shipping routes and regional markets.

He argued that foreign investors were increasingly recognising opportunities that local investors sometimes overlooked.

The government has also been pursuing private investment in port infrastructure, including proposed concession arrangements covering facilities in Mombasa and Lamu.

He said investment in logistics and refining could help Kenya take greater advantage of its strategic location and strengthen its position as a regional trade hub.

For the economy, the government’s challenge will be translating lower borrowing costs and growing investor interest into actual business expansion, productive investment and employment opportunities.