Standard Chartered Head of Wealth & Retail Banking Kenya, Edith Chumba and Standard Chartered Head of Wealth Management Products, Kenya and East Africa, Ouma Orero./HANDOUT
Standard Chartered Bank Kenya has introduced a new lending facility that allows clients to borrow against their investments in Kenya Government Bonds held through the Central Bank of Kenya’s Dhow Central Securities Depository (DhowCSD) platform.
The product, launched on November 3, gives Kenyan resident investors a way to access liquidity without selling their bonds. Clients will continue receiving their bi-annual coupon payments even as they borrow against the value of their bond portfolios.
The bank said the facility is designed for affluent customers who purchase government bonds directly from the Central Bank. Loans will be offered at competitive interest rates and will not attract arrangement fees.
Standard Chartered’s Head of Wealth & Retail Banking for Kenya and East Africa, Edith Chumba, said the product aligns with national efforts to expand access to digital financial services. She said the bank saw an opportunity to meet the needs of clients investing through DhowCSD.
“In line with the government’s agenda to digitise and democratise financial solutions and access for all citizens, we saw an opportunity to extend our Wealth Lending capability to Kenyans who have invested directly with CBK and would require liquidity,” she said.
Chumba added that the facility aims to help clients use the value of their bond holdings to meet various financial needs.
“Our aim is to help investors unlock the value of their government bonds purchased via DhowCSD. The facility can be used for reinvestment or personal needs, with a minimum loan amount of KES 50,000 and a maximum based on the size of the client’s bond portfolio.”
She said feedback from clients during the testing phase earlier this year showed strong interest in the solution. “The pilot launch earlier this year has been well-received by our clients. A testament that clients value innovation that helps them achieve their financial goals,” she said.
The loan will be issued as an overdraft, giving borrowers more flexible repayment terms compared to traditional lending products.
The DhowCSD platform has become a key contributor to increased participation in Kenya’s government securities market. According to Central Bank data cited in the release, individuals now make up 79 per cent of all DhowCSD account holders.
The value of securities held by individuals and other non-institutional investors has also risen significantly. Their share grew from 7 per cent in June 2023 to 13 per cent in June 2024, reflecting a rise in retail investor interest in government paper.
Since its rollout, DhowCSD has opened access to bond and Treasury bill trading to a wider segment of the public. Active accounts on the platform rose by 112 per cent—from about 45,000 in July 2023 to more than 96,000 by August 2024.
The Central Bank has attributed this growth to improved efficiency and the platform’s role in deepening Kenya’s capital markets. The system aims to support broader financial inclusion by giving more Kenyans a secure, digital channel to invest in government securities.
Standard Chartered said the new lending product builds on that progress by offering investors an additional tool to manage their finances while preserving their long-term investment.