Kenyan CEOs more optimistic in CBK survey, but 26.7% say bank credit is hard to get

Chief executives of Kenyan private firms were more optimistic about the next 12 months in September than in July, but 26.7% of them rated access to bank credit as difficult or very difficult, the Central Bank of Kenya (CBK) said in its CEOs Survey report posted on 20 October 2026.

The CBK ran the survey between 7 and 18 September, sending an online questionnaire to the CEOs of 600 private firms, including members of the Kenya Association of Manufacturers, the Kenya National Chamber of Commerce and Industry and the Kenya Private Sector Alliance. It conducts the survey every two months, before each meeting of its Monetary Policy Committee, to gauge firms' views of the business environment.

Of the respondents, 79% were domestically owned private firms and 14% were foreign-owned private firms. Some 53% had a turnover below KSh 250 million in 2025 (about US$1.9 million at the rate of KSh 129.92 to the dollar the CBK posted on 21 October), and 13% had more than KSh 5 billion (about US$38.5 million). Some 64% employed fewer than 100 people.

Respondents attributed the better outlook to resilient domestic demand, higher orders and seasonal spending, and also cited rising tourism, lower borrowing costs, improved liquidity and a stable exchange rate. They listed elevated fuel, transport and other input costs, pressure on household incomes, adverse weather and geopolitical tensions as risks.

On credit, 43.1% of respondents rated access to bank financing in the third quarter of 2026 as moderate, 30.2% as easy or very easy and 26.7% as difficult or very difficult. Most respondents reported lower lending rates, the CBK said. Its website lists the average lending rate at 14.34% in August 2026.

High collateral requirements, lengthy approval processes, documentation demands and borrowing costs still limited access, particularly for smaller businesses, the report said. Weak demand and cash-flow pressure reduced some firms' appetite to borrow.

The survey found that 53% of firms were financed mainly by their own resources, 28% by bank loans, 7% by private equity and 2% by new shares or an initial public offering. Another 10% named other sources. In the July survey the shares were 49.7% own resources and 33.7% bank loans; in September 2025 they were 50.0% and 30.8%.

The CBK said that although lending rates had declined, concerns over the affordability of credit still led some firms to prefer internally generated funds. Others used overdrafts, supplier credit, customer deposits, advance payments and grants from development partners.

Business activity was mixed in the third quarter, the survey found. Orders and sales improved, production and employment were broadly stable, purchase prices rose and selling prices stayed largely unchanged. The CBK said activity is expected to improve in the fourth quarter on seasonal demand.

Among respondents, 37.2% said they were operating below capacity and expected no difficulty meeting a sudden rise in demand. A further 44.5% were near full capacity and expected some difficulty.

The high cost of doing business, elevated energy prices and geopolitical tensions, particularly in the Middle East, were named as the main constraints on growth over the next 12 months. Fewer respondents than in July expected a high impact from developments in the Middle East. Some 76% of respondents said their firms had adopted automation, digital or other technology in their operations.

Among the CEOs' recommendations to improve the business environment were lower levies, licence fees, compliance costs and production costs, and wider access to affordable credit through lower lending rates, simpler loan requirements and flexible repayment terms, particularly for small and medium-sized enterprises. They also asked for predictable tax and regulatory policies with adequate consultation before changes, and for national and county permits to be consolidated.

The CBK posted its Market Perceptions Survey for September on the same day. That survey targeted 400 private sector firms, including 38 commercial banks and 14 microfinance banks. It received responses from 38 commercial banks, 14 microfinance banks and 207 non-bank firms, an overall response rate of 65%.

Respondents to that survey expect inflation to stay slightly elevated over the next three months, mainly because of food supply constraints, higher fuel and transport costs and global shocks. On its website the CBK summarised the finding as inflation staying above 5% but within the target range. Respondents also expect lending rates to stay broadly stable over the next 12 months, supported by a stable Central Bank Rate.

The CBK's website lists the Central Bank Rate at 8.75% as of 7 October 2026 and inflation at 6.8% for September 2026.