Nairobi, July 12 -- Commercial banks have cut lending to State corporations by more than two-thirds, or Sh59.7 billion in two years as legal reforms and tighter National Treasury controls prompt lenders to reassess the creditworthiness of public enterprises.

Central Bank of Kenya (CBK) data show net domestic credit to parastatals fell to Sh28 billion in March 2026 from Sh87.7 billion in March 2024, a decline of 68.1 percent.

Banks almost halved their exposure over the past year alone, reducing outstanding loans from Sh55.7 billion in March 2025 to Sh28 billion in March this year.

The retreat coincides with the implementation of the Government Owned Enterprises (GOE) Act, 2025, which is reshaping State corporations into public limited l...