Fiscal sustainability refers to a government's capacity to generate sufficient revenue to cover its expenses and repay its debts without accumulating excessive liabilities or creating new money. Recent observations indicate that Kenya's economic growth has slowed, prompting concerns about its...

This study examined how a company's tax exposure, conceptualized as a capital structure decision factor, influences the financial performance of state-owned sugar manufacturing corporations in Western Kenya. Grounded in Modigliani and Miller's capital structure model and drawing on trade-off,...

This study investigates the long-memory properties of the prices of three Kenyan commodities (tea, coffee and horticultural products) by applying fractional integration methods to monthly data spanning the period from August 1998 to December 2024. The empirical results provide evidence of...

The pursuit of disabled students' inclusion in higher education remains a significant global concern, particularly in developing nations where systemic and institutional barriers persist. Despite progressive legislative and policy frameworks promoting inclusive education, Kenyan and Pakistani...

The Kenya Longitudinal Socioeconomic Study of Refugees and Host Communities (K-LSRH) is the first national panel survey of registered refugees and hosts in Kenya. It provides a unique opportunity to inform efforts to enhance the socioeconomic integration of refugees. Unlike previous surveys that...

The study examines how cost of credit, digital finance and bank capital shape MSME lending and performance in Kenya. Using FinAccess 2024 microdata and bank-level panel data (2011-2024), we estimate a control-function Probit, Mundlak Random Effects Logit and System-GMM model. Results show that...

Partial Credit Guarantees (PCGs) are central to MSME finance, yet their pricing impact is uneven. Using loan-level evidence from 28,356 guaranteed MSME loans issued in Kenya between 2013 and 2024, this paper examines whether PCGs reduce defaults and borrowing costs, and separately benchmarks...

The study seeks to examine the effects of credit guarantee schemes on Micro, Small and Medium-sized Enterprises (MSME) lending. Specifically, the paper examined the performance of a specified credit guarantee scheme, effect of the credit guarantee scheme on MSME loan default probability and how...

This study investigates the sector-specific determinants of MSME credit in Kenya across three dominant sectors-real estate, trade, and transport & communication-that collectively account for nearly 70% of bank MSME lending. Using quarterly data from 2012 to 2024, we apply sectoral Autoregressive...

The paper examines the effects of commercial banks' adoption of Environmental, Social and Governance practices on Micro, Small and Medium-sized Enterprises support in Kenya. The study is underpinned on the growing demand for sustainable financing by entreprises in the wake of need for...

Green banking practice involves the bank's internal operations, external operations and lending decisions which are environmentally, socially and governance (ESG) compliant and sustainable. In Kenya, green banking practice is influenced internally and externally and is context based. Adverse...

Micro, small and medium enterprises (MSMEs) are critical drivers towards the growth of the economy and contribute largely towards poverty eradication and employment. In Kenya, the MSME sector contributes to 40% of GDP, and employs approximately 14.9 million. Yet, this sector continues to...

Data from the Central Bank of Kenya show that, in the 12 months to December 2024, the banking sector generated approximately 35.3% of its overall lendingrelated income from the MSME sector, almost half of which was from small and microenterprises (SMEs). During the same period, banks and...

This paper examines the incidence and determinants of credit rationing and borrower discouragement among Kenyan SMEs using firmlevel data from the 2018 World Bank Enterprise Survey. Only about onequarter of firms report no financing obstacles, while the majority face constraints of varying...

This paper investigates whether economic hardship undermines preferences for honesty. We use controlled, high-stake measures of cheating for private benefit in a sample of 5,664 Kenyans, exploiting three complementary sources of variation: experimentally manipulated monetary incentives to cheat,...

This paper investigates whether economic hardship undermines preferences for honesty. We use controlled, high-stake measures of cheating for private benefit in a large sample of 5,664 Kenyans, exploiting three complementary sources of variation: experimentally manipulated monetary incentives to...

This study examined how a company's tax exposure, conceptualized as a capital structure decision factor, influences the financial performance of state-owned sugar manufacturing corporations in Western Kenya. Grounded in Modigliani and Miller's capital structure model and drawing on trade-off,...

This paper examines the incidence and determinants of credit rationing and borrower discouragement among Kenyan SMEs using firmlevel data from the 2018 World Bank Enterprise Survey. Only about onequarter of firms report no financing obstacles, while the majority face constraints of varying...

Data from the Central Bank of Kenya show that, in the 12 months to December 2024, the banking sector generated approximately 35.3% of its overall lendingrelated income from the MSME sector, almost half of which was from small and microenterprises (SMEs). During the same period, banks and...

This paper develops a nowcasting model to produce timely estimates of quarterly GDP growth for Kenya. Nowcasting combines official monthly indicators with digital transaction data. Exploiting strong comovement of macroeconomic time series, a few latent factors summarize aggregate dynamics and...

Kenya has one of the fastest electrification rates in Sub-Saharan Africa. Despite the increase in electrification rates, rural and underserved regions remain a critical challenge requiring a cost-effective strategy that maximises the use of stand-alone and off-grid solutions. This paper uses the...

This paper investigates whether economic hardship undermines preferences for honesty. We use controlled, high-stake measures of cheating for private benefit in a large sample of 5,664 Kenyans, exploiting three complementary sources of variation: experimentally manipulated monetary incentives to...

International support has failed to keep pace with the growing numbers of refugees and internally displaced persons, thus creating a financing gap between their needs and available resources. The recent US withdrawal from funding development and humanitarian programmes has only compounded this...

This paper seeks to determine the interaction mechanism between the domestic imbalance and the external imbalance in Kenya and why it matters for banks. Whenever an economy has is on a path of soaring fiscal and current account deficits like Kenya has been over the past decade, concerns on the...

Micro, Small and Medium-sized Enterprises (MSMEs) are crucial drivers of economic growth. In Kenya, MSMEs represent about 98 percent of all businesses and contribute over 30 percent to the GDP. Despite their essential role in the economy, these enterprises face substantial challenges in...

The paper examines the effect of macroeconomic imbalances on bank lending with emphasis on the exchange rate movement, inflation differential and fiscal deficit. In the study, bank lending is modelled by gross loans and advances, assets quality and risk appetite. The panel GMM model results show...

This study investigates the demand for government securities by Kenyan banks using annual data from 2005 to 2022. Employing a fixed-effects panel regression model, the research examines the factors influencing banks' sovereign debt holdings and their implications for systemic risk. Key findings...

This paper seeks to establish whether the monetary policy stance of Central bank of Kenya (CBK) at the turn of financial markets is pre-emptive or a cleanup. The feedback loop between monetary policy reaction and the markets' response presupposes a sequencing that runs from the former to the...

ypical debt sustainability metrics characterize Kenya's sovereign debt as "unsustainable" since around 2019. Further, the data show that, over time, commercial banks' private sector lending has declined while lending to the government has grown. Given these observations, this study examines...

The study investigates the effects of macro imbalances on the banking sector performance in Kenya from the financial intermediation cost perspective for 2020q4 - 2024q1 period. Employing dynamic panel GMM model, the study finds that inflation pressures above the upper bound target, external debt...

The paper examines the nexus between capital, competition and stability in the Kenya banking sector. This is achieved by applying a panel data analysis model on annual bank level data for the period 2001 to 2022. The paper estimated H-Statistics and Bank Stability Index to measure evolution of...

This study investigates how socio-economic characteristics, migration status, and country of origin influence labor market outcomes in Nairobi County, Kenya. By estimating logit and Tobit models using data from the Kenya Refugee and Host Household Survey (KRHHS), we find that age is positively...

This study investigates the determinants of women empowerment among refugee women living in Nairobi, Kenya. First, the study constructs an index to examine empowerment drivers using data from the Refugee and Host Household Survey (RHHS) 2021. A fractional logit regression model was employed in...

This technical assistance report outlines the current state and future objectives for regulating crypto assets in the Republic of Kenya. The report, prepared at the request of Kenya's Capital Markets Authority, involved an analysis of crypto-asset activities and the related regulatory framework....

Can developing economies achieve growth that benefits everyone and protects the planet? This report explores how low- and middle-income countries (LMICs) can achieve inclusive and sustainable economic transformation (ISET) - where economic growth benefits all of society and protects our planet....

A bi-directional relationship between poverty and mental health may create a vicious cycle, wherein economic hardship and psychological distress reinforce each other. We examine the short-term dynamics between income fluctuations and mental well-being using 17 months of weekly financial diaries...

The integration or resettlement efforts aimed at self-reliance of refugees are requisite for their adaptation to social and economic shocks and consequently to their human development and contribution to economic growth. This study analyses the drivers of financial inclusion and social...

Promoting household-level adaptation measures is an important part of climate change adaptation policies to reduce vulnerability to droughts for (agro-)pastoral communities in sub-Saharan Africa. To develop effective supportive policies, it is important to get a better understanding of the needs...