He noted that across the region, Kenyans are entrepreneurial and, by nature, will start a business or a side hustle, and all they need is an affordable facility that will attract them.
"We know that most of the time, cash flows and projections are key for bank funding. Instead of just analysing income on customers' accounts to determine their ability to repay loans, we are encouraging banks to also consider the problems the customer is trying to address," he said.
Shah further challenged MSMEs to work on improving and protecting their credit scores to secure better chances of accessing higher loan facilities.
He said that, unfortunately, the banking industry in many ways still relies on traditional models that require physical security, such as guarantors, land, or buildings.
Shah noted that the majority of borrowers fall within a segment that cannot afford this physical security and thus shy away from bank loans.
"Millions of Kenyans are within this segment, but they don't have tangible security-land or buildings-so the bank that figures out how to address that need without requiring physical security is the one that will have a head start," he said.
On the issue of credit scores, Mr Shah said many entrepreneurs are crippled by fear and do not approach their preferred banks for guidance on maintaining a healthy credit score.
"Credit score is nothing more than an algorithm that, based on your behaviour, tries to predict your probability of default. This is why customers must understand what a credit score is and how they can maintain and improve it," he said.
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He added that understanding one's credit score is essential when negotiating a loan facility.
"Having open conversations with your bank about tight cash flows is also key in maintaining your credit score because the bank will then give you available options, such as elongating the repayment period," Mr Shah added.
He said that although KISONIA gives customers transparent predictability on base rates, it is important for borrowers to ensure consistency in paying their statutory obligations, as failure to do so can lead to business closure.
"Let borrowers match their financing requirements with their needs. Let them negotiate with banks and suppliers in good time when they encounter uncertainty in cash flows so that they can keep the business afloat," he said.
He added that although banks have long been perceived as aloof, they are slowly starting to understand the business environment and risks, and are developing inclusive facilities after stress testing.
"As we look to a bright future, in my view, MSMEs must strive to pay their loan facilities on time to build a good credit score and, if possible, stay away from cash businesses," he said.
The My Chat with a Bank CEO series provides an interactive platform where bank leaders engage directly with customers on key banking topics.
The October-November 2025 edition features six CEOs discussing how the industry is leveraging the KESONIA framework to empower businesses and households across Kenya.
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