Kenya’s banking industry disbursed Sh245.1 billion in new loans to micro, small and medium enterprises (MSMEs) during the first half of 2026, highlighting continued demand for business financing.
The lending formed part of Sh1.1 trillion in total financing issued across all reporting financial institutions during the period, according to the latest data from the Kenya Bankers Association (KBA).
Equity Bank led MSME lending, disbursing Sh82.3 billion, followed by Co-operative Bank with Sh32.4 billion and KCB with Sh26.4 billion.
Family Bank ranked fourth at Sh21.6 billion, while NCBA disbursed Sh17.7 billion.
I&M Bank followed with Sh13.9 billion, Absa Bank Kenya with Sh12.9 billion, Kingdom Bank with Sh7.8 billion, Diamond Trust Bank (DTB) with Sh7.4 billion and National Bank with Sh5.1 billion.
Business working capital loans accounted for the largest share of financing, representing 47.3 per cent of the total value issued.
Business expansion loans accounted for 26.5 per cent, while trade finance facilities made up 26.2 per cent.
Women continue to receive smaller share
Despite the overall lending growth, a significant gender gap persisted, with male-owned businesses receiving a substantially larger share of financing than female-owned enterprises.
Male-owned businesses accounted for 49.5 per cent of the value at issuance, equivalent to Sh527.82 billion, compared with 19.5 per cent, or Sh207.72 billion, for women-owned businesses.
The report shows that for every Sh1,000 issued to male-led businesses, women-led businesses received about Sh394, highlighting the persistent financing gap facing women entrepreneurs.
Trade leads sectoral lending
Trade accounted for the largest classified share of MSME lending at 25 per cent, followed by manufacturing at 18.2 per cent and agriculture at 7.3 per cent.
Transport and communications accounted for 5.6 per cent, while building and construction represented 4.1 per cent.
Unclassified lending made up 33.2 per cent of the total value issued.
Legal entities received the majority of the financing, accounting for 68.1 per cent of observed lending, compared with 31.9 per cent for individuals.
Nairobi dominates county lending
Nairobi recorded the highest county-level MSME lending at Sh273.28 billion, followed by Mombasa with Sh29.28 billion and Nakuru with Sh18.35 billion.
Meru, Kisumu and Kwale followed with Sh14.08 billion, Sh12.54 billion and Sh8.75 billion, respectively.