Political Favors? How Ruto-Linked Sidian Bank Rose To The Top In A Short Time

In less than three years, a little-known bank once teetering on the edge of irrelevance has catapulted itself into the ranks of Kenya’s mid-tier lenders, securing billions of shillings in government contracts and raising serious questions about political patronage in the banking sector.

Sidian Bank, formerly K-Rep Bank, has become the subject of intense scrutiny after former Deputy President Rigathi Gachagua made explosive allegations in January 2025 suggesting that a senior official in President William Ruto’s administration acquired the bank to funnel billions from controversial government programs.

While Gachagua stopped short of naming the bank or the official, the trail of evidence points unmistakably to Sidian and a web of politically connected shareholders who emerged immediately after the 2022 election brought President Ruto to power.

The bank’s meteoric rise from a struggling Tier 3 institution to a Tier 2 lender in September 2025 coincided with a bonanza of lucrative state contracts, massive deposit inflows from government agencies, and a complete overhaul of its ownership structure that brought in figures closely associated with the current administration.

The New Owners

At the heart of the controversy is the bank’s dramatic ownership transformation in October 2023, just months after the 2022 election. Centum Investment Company, which had been trying to sell its majority stake to Nigeria’s Access Bank for Sh4.3 billion, suddenly terminated that deal in January 2023 and instead sold a 38.91 percent stake to a consortium of Kenyan entities.

The biggest beneficiary was Wizpro Enterprises Limited, which acquired a 24.95 percent stake in the bank. Corporate records show Wizpro is wholly owned by Solomon Muriithi Maina, a businessman who chairs the Kenya Tea Development Agency Management Services and is widely known as a close ally of President Ruto.

Mr Muriithi has emerged as one of the most prominent investors in the financial sector under the current administration.

In 2024, he spent Sh326 million to increase his stake in HF Group to 24.2 percent from 18.27 percent, making him the mortgage lender’s largest individual shareholder. He is also reportedly eyeing the Mathira parliamentary seat, a move that would further cement his political ambitions.

Other members of the consortium that bought into Sidian include Pioneer General Insurance, which acquired a 16.89 percent stake, and Afram Limited with 24.36 percent.

Pioneer’s ownership is linked to UAE-based firms including Abcon International LLC, Parkview Investments Limited, and Medillon Trading FZE, raising questions about foreign influence in the bank’s operations.

The shareholding structure was further complicated in September 2024 when former Ugandan Attorney General William Byaruhanga acquired a 14.63 percent stake worth Sh1.03 billion through his investment firm Kenbe Investments. Byaruhanga, who served under President Yoweri Museveni from 2016 to 2021, has built an extensive business empire spanning real estate, hospitality, and manufacturing.

Meanwhile, other politically connected individuals have also invested in the bank’s financial ecosystem.

National Assembly Majority Leader Kimani Ichung’wah and Thika Town MP Alice Ng’ang’a, both key Ruto allies, bought shares in HF Group, which is part of the same investment circle as Sidian’s major shareholders.

Former Kenya Revenue Authority chair Anthony Mwaura, his spouse and daughter also bought a Sh1.6 billion stake in HF Group, making the family the second-largest shareholder of the listed mortgage firm. Mr Mwaura previously chaired the United Democratic Alliance’s National Elections Board, overseeing the campaign that propelled President Ruto to State House.

The interconnected web of shareholders raises uncomfortable questions about whether the bank has become a vehicle for politically connected individuals to access government funds.

## The Government Jackpot

What transformed Sidian from a struggling lender into a financial powerhouse was not organic growth or innovative banking products. It was a series of government contracts that brought billions of shillings in deposits flooding into the bank’s coffers.

In August 2024, Sidian Bank was selected as one of six lenders to handle payments under the Social Health Insurance Fund (SHIF), which processes close to Sh200 billion annually. The bank stood out conspicuously as the only Tier 3 lender at the time in a lineup dominated by heavyweights including KCB Bank Kenya, Co-operative Bank, Absa Bank Kenya, Equity Bank and Diamond Trust Bank.

The selection raised eyebrows. How did a small bank with limited infrastructure and a history of losses beat out four other large banks and nine mid-sized competitors to win a contract of such magnitude?

Government officials claimed the decision followed consultations with employers, but critics questioned whether the process was transparent. Under the now-defunct National Hospital Insurance Fund (NHIF), payments were routed through only four banks. Under the new SHA framework, Sidian suddenly found itself handling a piece of the country’s largest health financing scheme.

The bank moved quickly to clarify that it was only facilitating collections and remitting funds directly to SHA accounts, insisting it did not hold or manage SHA funds. But the optics were terrible, especially given the timing of the ownership changes.

In addition to SHIF contributions, Sidian Bank was also authorized to receive housing levy funds, the statutory 1.5 percent salary deduction intended to finance affordable housing initiatives. This gave the bank access to another major revenue stream from government collections.

But perhaps the biggest windfall came from the National Social Security Fund. By the end of 2024, NSSF had placed about Sh800 million with Sidian Bank, making it the single largest beneficiary among 11 lenders that shared Sh2.696 billion in fixed and term deposits from the provident fund.

This was a stunning reversal from 2023, when Co-operative Bank topped the NSSF placement list with Sh2.664 billion, followed by KCB with Sh1.94 billion and NCBA with Sh1.35 billion. Other beneficiaries in that year included Absa with Sh1.294 billion, National Bank of Kenya with Sh1.027 billion and Equity Bank with Sh827 million.

In 2024, these major banks received little or nothing from NSSF. Instead, Sidian walked away with the lion’s share. NSSF did not respond to queries about why it shifted most of its term deposits to Sidian Bank.

In November 2024, Nairobi Governor Johnson Sakaja further boosted Sidian’s fortunes by directing all Level 4 and 5 public health facilities in the county to transfer their accounts from Co-operative Bank to Sidian Bank. The move gave the lender a significant shot in the arm in deposit mobilization, with hospital revenues providing a steady inflow of cash.

When questioned by the Senate Committee on Devolution and Intergovernmental Relations, Mr Sakaja defended the decision by claiming Sidian had a cheaper interest rate and gave a better offer. He insisted that the bank’s ownership structure did not matter, saying every bank has owners and that what matters is good service.

But the timing raised questions. The directive came just as Sidian’s new shareholders were pushing to elevate it into a mid-tier institution by 2028, and the additional deposits would be crucial to achieving that goal.

## The Financial Transformation

The influx of government money transformed Sidian’s balance sheet almost overnight. Customer deposits rose significantly from Sh43.5 billion in September 2024 to Sh59.8 billion in June 2025 and further to Sh78.1 billion in September 2025. This represented an 80 percent increase in just one year.

Rather than lending out the deposits to businesses and consumers, Sidian channeled much of the fresh inflows into Treasury bills and bonds. The bank’s stock of government securities surged from Sh19.3 billion in September 2024 to Sh48.6 billion in September 2025, a 152 percent increase.

This strategy of parking deposits in risk-free government securities bolstered the bank’s earnings dramatically. Interest income from government securities jumped 134.7 percent to Sh3 billion from Sh1.3 billion, helping to offset a 9.2 percent drop in interest income from loans.

The bank’s net profit surged 5.1 times from Sh287.26 million in the nine months to September 2024 to Sh1.47 billion in the same period of 2025. This was despite the fact that its loan book remained essentially flat at Sh25.1 billion, with management attributing the stagnation to a sluggish economy.

By September 2025, the Central Bank of Kenya officially reclassified Sidian as a Tier 2 bank, denoting a market share of between one and five percent. The bank had achieved in two years what typically takes a decade of organic growth.

But the rapid transformation came at a cost to taxpayers. By placing billions in government deposits with Sidian, which then invested them in Treasury bills and bonds, the government was essentially paying the bank to hold its own money. The interest earned by Sidian on these securities was ultimately being funded by taxpayers.

## The Gachagua Allegations

The controversy exploded into the public domain in January 2025 when Rigathi Gachagua, who had been impeached in October 2024, appeared on KTN News and made explosive claims about a shadowy scheme involving a senior official in President Ruto’s administration.

Gachagua alleged that a powerful figure had snapped up a financial institution to funnel billions from the Housing Levy and SHIF contributions. He claimed to have inside knowledge because he was present when these arrangements were being made.

While Gachagua refused to name the bank or the official, his cryptic revelations sparked intense speculation on social media, with Sidian Bank’s name dominating the conversation. Kenyans on X unearthed past advertisements positioning Sidian Bank as a collection point for SHIF contributions, lending credence to the theory that Sidian was the institution in question.

Gachagua claimed that nearly Sh100 billion from the Housing Levy and SHIF was parked in a single bank, and that the bank had been purchased by a senior official through proxies immediately after the 2022 election.

The timing of Gachagua’s allegations was significant. He had been impeached just months earlier on charges of corruption, incitement of ethnic divisions, and undermining national unity. Gachagua contended that his ousting was a strategic move to silence him and obscure financial malpractices involving government programs.

In subsequent interviews and church appearances throughout 2025, Gachagua escalated his attacks on the Housing Levy and affordable housing program, calling it “the worst fraud against the people of Kenya.” He alleged that government officials were diverting the levy to sell construction materials such as cement, steel, and iron sheets for personal gain.

He further claimed that NSSF money was being diverted to fund private projects like the Bomas of Kenya and the Rironi-Mau Summit road, benefiting individuals connected to the government.

President Ruto has consistently defended his administration’s programs, embracing his “Zakayo” nickname and vowing to push ahead with his agenda. “Even if they call me Zakayo, so long as I deliver, I have no problem,” he said in January 2025.

Lands, Housing, and Urban Development Cabinet Secretary Alice Wahome dismissed Gachagua’s allegations and challenged him to back his claims with evidence. “For somebody at the level of deputy president, a former deputy president, to tell Kenyans that there is somewhere my ministry is sitting behind the scenes and making some illegal contracts, I would want him to tell the EACC where that is,” she stated.

## Questions of Propriety

While there is no evidence that President Ruto or any senior official directly owns shares in Sidian Bank, the web of connections between the bank’s major shareholders and the current administration raises serious questions about political patronage.

The fact that the bank’s ownership transformation occurred immediately after the 2022 election, and that its fortunes changed dramatically once these new shareholders came on board, suggests more than coincidence.

The selection of Sidian to handle SHIF payments and housing levy collections, despite its small size and limited infrastructure, also raises questions about the criteria used by government agencies in awarding these lucrative contracts.

The massive shift of NSSF deposits from major banks to Sidian in 2024, without any public explanation, further deepens suspicions of favoritism.

Civil society organizations and anti-corruption watchdogs have called for comprehensive investigations into Sidian Bank’s ownership and operations. They advocate for forensic audits of SHA fund allocations and disbursements, transparent disclosure of the bank’s shareholders and beneficiaries, and independent inquiries into alleged collusion between Kenyan officials and the bank’s owners.

The Central Bank of Kenya has flagged Sidian for having inadequate core capital adequacy ratios, with stress tests revealing potential vulnerability to loan defaults. This suggests that despite its rapid growth, the bank may still face regulatory challenges that could require additional capital injection from its shareholders.

## The Broader Implications

The Sidian Bank saga highlights a troubling pattern in Kenya’s financial sector, where political connections often matter more than business fundamentals or competitive merit.

The Housing Levy and SHIF have been controversial since their inception, with critics arguing they burden salaried workers while offering little tangible benefit. The Federation of Kenya Employers warned in January 2025 that these deductions, combined with PAYE and other taxes, devour up to 45 percent of workers’ paychecks.

If billions from these programs are indeed being channeled through banks owned by politically connected individuals who then invest the funds in government securities, it raises fundamental questions about the purpose of these levies and whether they are being used as intended.

The government’s privatization agenda has also come under scrutiny, with critics alleging that public assets are being undervalued and sold to politically connected buyers. More than 10 state parastatals have been earmarked for privatization, including KICC, JKIA, Kenya Seed Company, and National Oil Corporation of Kenya.

The lack of transparency around these transactions, combined with the Sidian Bank example, has fueled public distrust in the government’s economic management.

As Kenya heads toward the 2027 election, the Sidian Bank controversy is likely to remain a flashpoint. Gachagua has vowed that if elected president, he will scrap the Housing Levy, hand over all completed housing units to county governments, and use rental income to refund Kenyans their deductions.

For now, Sidian Bank continues to grow, buoyed by government deposits and protected by politically connected shareholders. But the questions about how it got there, and who is benefiting, are unlikely to go away anytime soon.

The bank’s transformation from struggling lender to mid-tier powerhouse in less than three years stands as a stark reminder that in Kenya’s banking sector, political connections can be worth more than decades of hard work and sound business practices.

Whether this represents legitimate business success or something more sinister remains to be seen. What is clear is that the Kenyan public deserves answers about how their money is being managed, and whether the banking system is being used to enrich a politically connected elite at taxpayers’ expense.