Sifuna questions move by Nairobi City County to shift to a ‘small bank’

Nairobi City County Senator Edwin Sifuna has openly challenged the decision by the Nairobi City County Government to transfer all health-facility banking arrangements to a “tier-3” bank.

He insists that the move raises serious questions of transparency and sound financial governance.

In a post shared on his Facebook page, Senator Sifuna objected to a letter issued by the Acting County Secretary, Mr Godfrey Kumali, dated 5 November 2025, which directs all county health facilities to shift their main bank accounts to Sidian Bank — previously known as K-Rep Bank — following a County Executive Committee resolution of 28 October 2025.

“The health facilities in Nairobi have been banking with Co‑operative Bank of Kenya, a tier one bank with a solid history and reputation,” Mr Sifuna wrote.

“How you wake up one day and direct all of them to move to a tier 3 bank cannot be explained any other way than that 'ill motive' is at play.”

Mr Sifuna’s concerns rest on two key angles: first, the classification of banks into tiers under Kenya’s banking sector regulation; and second, the implications of shifting thousands of health-facility accounts from a top-tier institution to a smaller, less-dominant bank.

According to the Central Bank of Kenya (CBK) sector-monitoring, banks in Kenya are categorised into three tiers based on market share, assets, deposits and loan portfolios.

Tier 1 banks are the largest institutions, commanding the lion’s share of market activity.  

Tier 3 banks, by contrast, are small-scale institutions with modest asset bases and represent a small fraction of the market.

For instance, the Co-operative Bank of Kenya is widely listed among the Tier 1 banks, with a strong deposit base and national footprint.  

On the other hand, Sidian Bank is identified by several recent reports as a Tier 3 institution.

By shifting health-facility banking to a smaller Tier 3 bank, health-sector stakeholders say the county could be exposed to greater operational risk, less liquidity, fewer branch networks and potentially weaker oversight mechanisms — all of which raise serious questions for public-fund management.

Historically, Nairobi County health-facilities banked with Cooperative Bank of Kenya and had accounts with other large institutions such as Equity Bank (another Tier 1 bank).

A county notice from August 2024 shows that revenue-collection accounts were held with Cooperative Bank and Equity Bank.

The letter from Mr Kumali cites a decision taken at the 69^th County Executive Committee meeting dated October 28, 2025, which “resolved to designate Sidian Bank as its Principal Banker.”

It directs all Level 4 and Level 5 hospitals and those in charge of county health facilities to complete the forms required to open accounts and submit them by November 7, 2025 (just some five days ago).

The Senator argues that the switch from a Tier-1 to Tier-3 bank for health-facility banking lacks transparency and adequate explanation.

At issue now is how the county will justify the decision: whether the procurement process was open, whether the performance criteria for selecting Sidian Bank were published.

It also needs to shed light on whether health-facility cash-flow, service continuity and safeguarding of public funds were fully considered.

Business analysts view Sidian Bank as a financial institution rapidly gaining customer attention.