Business Loans in Kenya

Reviews of business loan products from Kenyan commercial banks and licensed microfinance institutions (MFIs). Coverage includes working capital facilities, asset finance and SME-targeted products. All lenders reviewed are registered with the CBK or the Association of Microfinance Institutions of Kenya (AMFI-K).

Kenyan business loans are offered by two broad categories of regulated lender: commercial banks licensed by the Central Bank of Kenya (CBK) under the Banking Act, and deposit-taking microfinance banks also licensed by the CBK, this time under the Microfinance Act. Both groups are distinct from the many informal or unregistered "business lenders" active in the Kenyan market, and borrowers should always confirm a lender's licence status, directly with the CBK or via the Association of Microfinance Institutions of Kenya (AMFI-K) for MFIs, before signing an agreement.

Eligibility for a bank-issued business loan generally requires a registered business (sole proprietorship, partnership or limited company), a business KRA PIN, bank statements or financial records demonstrating consistent turnover, and often collateral for larger facilities. Microfinance banks such as KWFT and Faulu typically serve smaller, more informal businesses, sometimes via group-lending models that reduce the need for traditional collateral by having a small group of borrowers co-guarantee each other.

Costs vary significantly by lender type: commercial banks price business loans on a risk-based basis, broadly in the 14%-25% per annum range for established SMEs with good financials and some collateral, while microfinance banks typically charge more, often 18%-30% per annum, reflecting the higher cost of serving smaller, higher-risk borrowers. Beyond interest, expect facility/negotiation fees, and for secured facilities, valuation and legal fees on any collateral pledged.

The typical application path is: approach the lender with your business registration, KRA PIN and financial records; the lender assesses your cash flow, existing liabilities and (where relevant) collateral; you receive a facility offer specifying the amount, rate, term and any security required; and, once signed, funds are disbursed, usually within 48-72 hours for most lenders reviewed here. Common use cases include financing working capital and stock purchases, bridging the gap between invoicing and payment on larger contracts, buying equipment or vehicles through asset finance, and financing import/export activity through trade finance facilities at the larger banks.