Faulu Microfinance Bank has signaled a strong turnaround in its 2025 financial performance, reducing losses by over 60 per cent through disciplined cost management and a strategic shift towards MSME financing.
In the latest financial results, the bank’s loss before tax narrowed sharply from Ksh1.04 billion to Ksh386.9 million, with total operating expenses dropping from Ksh4.04 billion to Ksh3.46 billion.
The bank’s focused approach to the MSME Segment, which has better cash flows and deposits and a disciplined cost management, saw it reduce its interest expenses from Ksh1.7 billion to Ksh1.5 billion.
Beyond cost-cutting, Faulu also successfully diversified its revenue streams, recording notable growth in fees, commissions, and non-funded income.
“Our 2025 performance reflects a deliberate and disciplined transformation journey that is now delivering results,” Julius Ouma, Chief Executive Officer at Faulu Microfinance Bank, stated.
“We have significantly reduced our cost base while strengthening the quality of our balance sheet. Faulu is now firmly on a path to sustainable profitability and long-term value creation,” he added.
The de-risking strategy marked a shift away from high-risk portfolios toward a more robust focus on the MSME book.
Faulu maintained a healthy liquidity ratio of 25 percent, comfortably above the 20 percent regulatory minimum. With the fundamentals now stabilized, the bank is pivoting its focus toward digital expansion, innovation, and customer service transformation to drive growth in the coming year.
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