Sidian Bank has joined Kenya’s mid‑tier lenders after the Central Bank of Kenya (CBK) confirmed its upgrade to Tier 2 status in late September 2025.
This is a milestone for the bank, which has steadily grown its market share from 0.7% in December 2024 to above 1% by September 2025, meeting CBK’s classification threshold for medium‑sized lenders. The upgrade was fueled by a Sh3 billion rights issue and a total Sh6 billion capital injection from shareholders, alongside onboarding large corporate accounts, particularly from government institutions.
Tier 2 Banks in Context
The Kenya Bankers Association’s State of the Banking Industry Report 2025 highlights the growing importance of Tier 2 banks in Kenya’s financial ecosystem. Collectively, these institutions account for 10–12% of industry assets, serving as a bridge between dominant Tier 1 lenders and smaller Tier 3 banks.
Despite elevated non‑performing loans (NPLs) at 16.4% in December 2024, Tier 2 banks have maintained strong capital adequacy ratios well above regulatory thresholds.
The report notes that many mid‑sized lenders are adapting through digital transformation, with the adoption of the ISO 20022 messaging standard, progress toward a Fast Payment System (FPS), and the licensing of 85 Digital Credit Providers.
According to the report, Tier 2 banks are also playing a vital role in SME financing and inclusion, aligning with CBK’s push for broader access to credit.
“Our concerted effort will ensure that the banking sector remains not only stable and profitable, but also transformative, inclusive, and aligned with Kenya’s long‑term development aspirations,” said Raimond Molenje, CEO of the Kenya Bankers Association, in the foreword to the report.
Strategic Outlook
Sidian Bank’s elevation to Tier 2 status positions it to:
- Compete more effectively for government and corporate accounts
- Expand lending capacity to SMEs and retail customers
- Strengthen resilience through enhanced capital buffers
- Drive innovation in digital credit and green finance
