Oral East AfricaTraditional Kenyan dukas, the neighbourhood shopfronts, are the leading lenders to the economy, giving out products on buy now, pay later basis that allows wage earners to align their pay cycles to pressing household needs.
Shopkeepers rank just behind saccos and chamas as the major sources of informal credit, according to the 2024 Finaccess Survey by Financial Sector Deepening-FSD and the Central Bank of Kenya. Informal financial services usage was at 30.8 per cent of the population in 2024, including Family / Neighbours /friends, and employers.
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But these dukas have come under a lot of financial strain over the last couple of years as interest rates spiked and consumer spending dipped
Lipa cash
FSD notes shopkeepers accounted for about 30.1 per cent of informal usage in 2019, but that rate has since declined to 25.5 per cent.
This may be about to change since the Central Bank of Kenya Governor, Dr. Kamau Thugge has slashed interest rates seven times to 9.5 per cent, noting that the monetary policy team sill saw room for easing to boost private sector credit and consumption.
Banks are now rolling out the red carpet for local retailers as they tap the unicorns who will sail the economic recovery on lower interest rates and recovering private sector credit.
Average commercial banks’ lending rates declined to 15.2 per cent in July 2025 from 15.3 per cent in June, and 17.2 per cent in November 2024.
100% asset finance
Family Bank, for instance, is pushing its popular stock loans for retailers, urging small businesses to leverage on the lender to draw funds for boosting their inventory.
Private sector credit has been on a rebound from negative 2.9 per cent in January, recording growth of 3.3 per cent in July 2025 compared to 2.2 per cent in June.
These loans are going to key sectors of the economy, particularly manufacturing, trade, building and construction, and consumer durables, improved in June and July.
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