In Kenya, Small and Medium Enterprises (SMEs) and micro-businesses form the backbone of the economy contributing a significant share of employment and national output. To thrive and remain sustainable, these enterprises depend heavily on access to financial services and commercial banks play a central role in meeting that need. Banks in Kenya support small businesses through credit access, tailored financial products, capacity-building initiatives, and strategic partnerships that enhance long-term viability.
One of the most direct ways banks help small businesses grow is by providing loans and credit facilities. Over recent years, Kenyan banks have increasingly targeted Micro, Small and Medium Enterprises (MSMEs) with loan products designed to match their financial capacities and growth stages. According to data from the Kenya Bankers Association (KBA), banks disbursed over KES 81.4 billion to MSMEs between January and May 2025 demonstrating the sector’s expanding role in financing Kenya’s small business ecosystem.
Leading institutions such as Equity Bank have taken particular strides in MSME lending with millions of shillings disbursed to support business expansion and job creation. In early 2025, Equity Bank alone accounted for KES 24.9 billion of lending, reflecting its strategy of deepening financial inclusion nationwide. Other banks, including Co-operative Bank, I&M Bank and KCB Bank also contributed billions in MSME loans reinforcing a broader industry commitment to small business financing.
Beyond traditional secured lending, several Kenyan banks have developed alternative credit products that make financing more accessible to small businesses, especially those that lack substantial assets. These facilities are designed to support enterprises that demonstrate consistent activity and reliable performance. For instance, SBM Bank offers unsecured MSMEs loans that do not require security to facilitate the loan.
In addition to credit extension, banks are engaging in strategic partnerships and capacity building that help businesses become more sustainable. A notable example is the KES 32.0 billion partnership between EIB Global and KCB Bank to support SMEs, youth and women entrepreneurs in Kenya. This initiative not only channels capital into small firms but also includes technical assistance and business mentorship to improve their bankability and long-term success.
At an industry level, the Kenya Bankers Association has pledged to inject KSh150 billion annually into SME financing beginning in 2025 for the next three years. This commitment, combined with government and development programmes, strengthens the ecosystem for small businesses to innovate, formalize and scale.
Overall, banks in Kenya play a multifaceted role in supporting small business growth as they provide affordable credit options, innovate financial products for underserved markets and participate in broader initiatives that enhance enterprise sustainability. As these efforts deepen, the partnership between the banking sector and SMEs is likely to remain a key driver of economic resilience and inclusive growth in the country. ( start your investment journey today with the cytonn money market fund. Call + 254 (0)709101200 or email sales@cytonn.com)
