Banks listed on the Nairobi Securities Exchange (NSE) wrote off $580 million in loans last year as Kenya’s economy expanded at its slowest pace in five years, reflecting persistent pressure on households and businesses from high living costs, weaker demand, and tighter financial conditions, the Business Daily reported on Wednesday.
The figure declined from roughly $680 million the previous year, pointing to a modest improvement in asset quality even as borrowers continued to face significant strain.
Equity Group Holdings led the sector with write-offs climbing to about $212 million from $172 million a year earlier. KCB Group saw its figure fall sharply to roughly $110 million from $197 million. As Kenya’s two largest lenders, both remain most exposed to shifts in credit quality. NCBA Group wrote off about $91 million, while Absa Bank Kenya raised its figure to roughly $83 million. Diamond Trust Bank Group reduced write-offs to about $31 million, and Stanbic Holdings more than halved its figure to roughly $19 million. Co-operative Bank of Kenya recorded about $19 million, Standard Chartered Bank Kenya around $13 million, and HF Group approximately $380,000.
Equity Group said write-offs occur once “all practical recovery efforts” have been exhausted.
Kenya’s economy grew 4.6% in 2025, slightly below 4.7% the prior year and the weakest expansion since the Covid-19 contraction of 2020. Agriculture, the country’s largest sector, slowed to 2.8% growth from 4.3%, while manufacturing eased to 2.1% from 3.2%.
Households have faced shrinking disposable incomes from inflationary pressure and new statutory deductions covering healthcare, housing, and retirement savings. Small and medium-sized enterprises have also been squeezed by higher energy, financing, and input costs alongside softer consumer demand, spreading credit stress from individuals into the business sector.
The Kenya Bankers Association has proposed a 5% cut in Pay As You Earn (PAYE) tax across income bands to lift household purchasing power, arguing that real incomes have declined by between 10.7% and 12% over the past five years due to inflation and rising statutory levies.
