Record Lending: Kenyan Banks Disburse KSh 99.40B in September, Beating May's PeakRecord Lending: Kenyan Banks Disburse KSh 99.40B in September, Beating May's Peak

The surge matters because it shows credit reaching businesses and households faster after a long squeeze. Business Daily reported, citing Central Bank of Kenya (CBK) data, that the September total beat the previous record of KSh 88.80B ($683.39M) set in May 2026, a gap of about KSh 10.60B.

A record month in a recovering market

The September figure sits within a wider rebound. CBK's Monetary Policy Committee (MPC) said annual growth in commercial bank lending to the private sector reached 10.60% in September 2026, up from 10.30% in August. Lending had been contracting as recently as January 2025, when the annual rate stood at negative 2.90%, according to Capital FM's account of the committee's statement.

The record is a measure of loans disbursed in a single month, so it does not on its own tell readers how large the outstanding loan book has become. The report as published also does not show which sectors or borrowers took the money. The MPC did name trade, building and construction, agriculture, finance and insurance, and consumer durables as the areas where lending grew strongly.

Mwenendo earlier reported on how bank loans cost an average 14.34% in August, a price borrowers still weigh carefully before signing.

Cheaper credit, but still not cheap

The average commercial bank lending rate edged up to 14.40% in September from 14.30% in August, the MPC said. That is still well below the 17.20% recorded in November 2024, which may help explain why more borrowers are returning to banks.

The MPC held the Central Bank Rate at 8.75% on 7 October 2026. A steady policy rate suggests lenders are unlikely to see a sharp change in their funding costs in the near term, though banks set loan prices individually and customers receive different terms.

For a small business owner, the practical meaning is that credit is more available than a year ago, but a loan priced at about 14% still requires a clear plan to repay. Borrowers weighing an offer should compare the total cost of the loan, not only the headline rate.

Bad loans fall as lenders extend more

Banks are lending more while the share of loans that borrowers fail to repay is shrinking. Gross non-performing loans fell to 13.90% of total loans in September 2026, from 14.80% in June 2026 and 17.60% in August 2025, the MPC said. Declines were recorded in financial services, agriculture, trade, and energy and water.

The committee described the banking sector as stable, with strong liquidity and capital adequacy, and said banks continue to make provisions for bad loans. Lower defaults give lenders more room to extend new credit without raising pricing sharply.

Mwenendo earlier reported on how Treasury bill demand surged this month, with investors bidding KSh 75.37B ($580.06M) for KSh 28.00B on offer. Banks have a safe alternative in government paper, yet September's lending shows they also extended a record amount of credit to private borrowers.

Risks the committee flagged

The MPC listed prolonged geopolitical tensions, uncertainty over global trade policies and possible effects of El Nino weather conditions as risks. Headline inflation rose to 6.80% in September from 6.60% in August, mainly on higher prices for processed foods such as milk, wheat products and edible oils.

Growth still looks supportive. The CBK raised its 2026 growth forecast to 5.00% from 4.90%, and projects 5.30% in 2027. Whether September marks the start of a sustained lending boom or a single strong month will become clearer when the October and November figures arrive.