The World Bank has warned Kenyan commercial banks about the growing risk of holding large amounts of government securities as public debt rises.

Banks have invested heavily in Treasury bills and bonds because they offer predictable returns, but the World Bank says excessive exposure to government debt can crowd out lending to businesses and increase vulnerability if fiscal conditions deteriorate.

The warning comes as Kenya continues to run a large domestic borrowing programme while policymakers push lenders to expand private-sector credit and support investment.