Kenya's microfinance banking sector is poised for significant consolidation as the Central Bank of Kenya (CBK) proposes to increase the minimum core capital requirement from Sh60 million to Sh250 million through the Microfinance Bill 2026. This move is expected to pressure at least half of the country's 14 microfinance banks, requiring them to collectively raise an estimated Sh2.9 billion within five years of the bill's enactment. The CBK aims to foster a safer and more stable financial system, while industry representatives anticipate a wave of mergers and acquisitions, citing potential benefits for capital enhancement and operational improvement. Recent years have already seen several acquisitions, and this trend is likely to accelerate as institutions strive to meet the new regulatory threshold, with a potential deadline set for the end of 2031.