Stanbic Bank and Modern Coast reach out-of-court deal over Sh485M debt, ending legal battle and offering business recovery lifeline.
Stanbic Bank, Modern Coast Reach Settlement Deal
NAIROBI, Kenya – January 23, 2025: In a significant development for Kenya’s financial and transport sectors, Stanbic Bank Kenya and Modern Coast have reached an out-of-court settlement in a long-running Sh485 million loan dispute.
The agreement puts an end to months of legal wrangling that began after Modern Coast defaulted on a loan disbursed in 2020 to support its operations.
“We are pleased to have reached an amicable resolution with Modern Coast. This settlement reaffirms our commitment to supporting Kenyan businesses,”
said Stanbic Bank CEO Joshua Oigara.
Settlement Terms: Confidential, But Crucial
While the specific terms remain confidential, insiders reveal that Modern Coast will repay the Sh485 million loan over an 18-month period, with the final installment due in mid-2026.
In return, Stanbic Bank has agreed to withdraw all legal proceedings—preventing further reputational damage to either party.
Modern Coast’s Struggles in Context
The deal comes amid growing financial pressure for Modern Coast, once a leader in Kenya’s long-distance transport market.
The company has been grappling with:
- Rising fuel costs
- Declining ridership
- Losses from the COVID-19 pandemic
In 2024, it posted an estimated Sh100 million loss.
“We are working tirelessly to turn around the business,” said CEO Ali Hassan.
“This settlement with Stanbic is a significant step toward that recovery.”
Why the Deal Matters: A Shift in Dispute Resolution
The case underscores a growing trend in Kenya: businesses opting for alternative dispute resolution (ADR) over lengthy court processes.
“This is a great example of how firms can resolve disputes quickly and amicably,” said business consultant Patrick Njoroge.
“It’s good for the economy and for investor confidence.”
The Kenya Judiciary has recently encouraged mediation as a faster, cheaper alternative to commercial litigation.
Next Steps for Stanbic and Modern Coast
For Stanbic Bank, the deal allows it to recover funds without damaging relationships with strategic clients.
For Modern Coast, it offers breathing room to restructure operations, boost profitability, and restore market leadership.
Already, the company has begun:
- Retooling its service offerings
- Cutting operational costs
- Exploring regional expansion
🏁 Conclusion: A Blueprint for Business Resolution
The Stanbic–Modern Coast settlement demonstrates the value of dialogue over litigation in solving major business disputes.
In a post-pandemic economic recovery period, such collaborative approaches are likely to define Kenya’s corporate landscape in the coming years.