CBK Explains Why Company Bank Loans Have Increased in 2025

The Central Bank of Kenya (CBK) has released a report of the Chief Executive Officer (CEOs) March 2025 Survey, indicating their perceptions on business activity in the first quarter of 2025 relative to the fourth quarter of 2024.

In the report, CBK revealed that more companies acquired loans in March 2025 to sustain their activities compared to November 2025.

Further, the report states that firms generally used multiple sources of funding to finance operations, with the majority of them relying on their own resources and bank loans.

As of March 2025, 55 per cent of companies used their resources while 30 per cent relied on bank loans.

This is an increase from 26.9 per cent of bank loan sources in November 2024.

On the other hand, CBK reported that 7 per cent of CEOs financed their companies through private equity and new shares.

Reasons Behind the Increase

The majority of the respondents with bank loans expressed moderate conditions regarding access to credit.

The ease of access to credit was supported by several factors like the existence of firms’ long-lasting relationships with banks, adequate assets and working business models, which gave sufficient confidence to the lenders to extend credit.

Other factors include firms’ good credit rating by banks, and the existence of credit lines with banks for access by firms to manage cashflow needs when necessary.

Nevertheless, respondents expressed ease in accessing foreign currency-denominated loans compared to Kenya shillings-denominated loans, mainly for companies earning in foreign currency.

Also Read: How to Open and Operate a Bank in Kenya – CBK

CBK Reports Difficulties in Accessing Loans

At the same time, a proportion of the respondents expressed difficulties in access to credit facilities.

This- CBK reported- is largely due to several factors, including elevated lending rates have made borrowing more expensive.

The long bureaucratic processes, especially the Know Your Customer (KYC) requirements, have also slowed down loan applications.

The CEOs also complained that an increase in non-performing loans has led banks to conduct longer risk assessments before approving new loans.

Also Read: CBK Lifts Ban on Licensing New Banks

They also highlighted subjective lending practices, particularly to sectors like agriculture and small and medium enterprises (SMEs), which are seen as high-risk, have also played a role.

4 percent of the respondents said access to credit was very easy, while 12 percent said it was just easy.

The majority of CEOs said the process was moderate (49 percent), while 18 percent described it as either difficult or very difficult.

CBK reports that 60 percent of the Companies have experienced the effects of the reduction in interest rates since August 2024, while 31 percent have not.

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