Bank loan defaults shrink Sh46bn on liquidity rise

Loan default

Lower non-performing loans allow banks to hold fewer provisions, which are deductible expenses.

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Total bad loans from the banking sector shrank by Sh46 billion in the three months to December 2025, signaling increased liquidity in the market and hopes of business recovery.

Data from the Central Bank of Kenya shows gross non-performing loans declined by 6.4 percent in the three months to December, which is approximately Sh46 billion.

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Note: The results are not exact but very close to the actual.