Kenya has strengthened its financial crisis response framework after President William Ruto signed legislation giving the Central Bank of Kenya (CBK) formal powers to provide emergency funding to distressed but solvent banks, aligning the country’s banking oversight more closely with international standards for managing financial shocks.
The Central Bank of Kenya (Amendment) Act, 2026, establishes a legal framework for Emergency Liquidity Assistance (ELA), allowing the central bank to lend to eligible financial institutions during periods of financial stress to prevent wider instability across the banking system.
Under the new law, emergency funding will only be available to institutions that the CBK considers solvent and viable, are not under liquidation, and whose failure could threaten the stability of Kenya’s financial system.
The assistance will be temporary, discretionary and backed by collateral acceptable to the central bank.
Loans issued under the framework will generally be repayable within 12 months, although the CBK may extend the repayment period where necessary.
