Co-operative Bank Kenya Gets Sh12.9B Legacy Debt Write-Off

In Short

Co-operative Bank is among 11 firms that received a Sh12.9 billion legacy debt write-off from Kenya’s National Treasury.

What Happened

Co-operative Bank of Kenya Co-operative Bank of Kenya has been listed among 11 firms benefiting from a Sh12.9 billion legacy debt write-off by the National Treasury.

A debt write-off means the lender, in this case the state, removes old loans from its books as amounts it no longer expects to recover. The Treasury said some of the loans date back to the 1970s and have accumulated over decades.

Business Daily reported the write-off was recorded in the year ended June 2026. The report also noted that the bank’s Kamilisha digital lending product averaged nearly Sh400 million in monthly disbursements.

Kamilisha is a mobile and app-based loan service, which lets customers borrow without visiting a branch. These products usually rely on automated credit scoring, which is a rules-based way to estimate repayment ability using account history and other data.

Why It Matters

For the bank, clearing legacy obligations can remove distractions tied to long-running public sector claims. Even if these amounts are old, they can complicate financial reporting and governance questions.

For Kenya’s banking market, the note about Kamilisha highlights that digital lending is still a core channel for everyday credit. Monthly disbursement figures of this size show ongoing demand for short-term loans, even as regulators and consumer groups keep a close eye on loan costs and collection practices.

For operators and fintech partners, this is another reminder that large banks are still actively pushing mobile credit products. That affects competition for customer wallets, credit distribution, and future partnerships across the wider Banking and Fintech ecosystem.