Kenya’s plan to reduce domestic borrowing over the medium term is expected to improve credit availability for businesses by reducing competition between the government and the private sector for financial resources. A smaller fiscal deficit reduces the government’s reliance on domestic borrowing, allowing a greater share of financial resources to be directed toward productive private sector activities rather than financing public expenditure. Combined with lower domestic borrowing, a stable monetary policy environment could improve lending conditions across the economy. Greater access to private sector credit has the potential to generate significant economic benefits. Overall, Kenya’s strategy to gradually reduce domestic borrowing represents an important step toward strengthening the country’s financial system.