SHIF faces KSh 34 billion deficit as utilization ratio hits 158% in first year of operation

The SHIF faces a 158% utilization ratio as claims outpace contributions by KSh 34 billion. Read about the challenges facing Kenya's new health financing model.

By: AXL Media

Published: May 1, 2026, 4:43 AM EDT

Source: Information for this report was sourced from TUKO.co.ke

Critical Imbalance in Health Fund Revenue and Payouts

Kenya’s new public health financing system is facing a significant sustainability crisis within its first year of implementation. Data from the 2026 Economic Survey indicates that the Social Health Insurance Fund incurred claims totaling KSh 91.5 billion, while only collecting KSh 57.7 billion in member contributions. This disparity represents a utilization ratio of 158.6%, meaning the fund spent approximately KSh 1.59 for every KSh 1 it received. Health Cabinet Secretary Aden Duale has acknowledged these challenges, attributing the deficit partly to the transition from the defunct National Hospital Insurance Fund and the inclusion of KSh 33.4 billion in outstanding claim obligations.

Formal Sector Bears 90% of the Financial Burden

The funding gap is further exacerbated by a deep imbalance in the contributor base. Of the KSh 57.7 billion collected, formal sector workers provided KSh 51.99 billion through the mandatory 2.75% levy on gross income. In contrast, the informal sector contributed only KSh 5.72 billion. This distribution reveals that while over 22 million Kenyans have registered under the Social Health Authority, only about four million are active contributors. This small revenue base places a disproportionate financial load on salaried employees to support a significantly larger enrolled population, threatening the long-term viability of the scheme.

Audit Flags Multi-Billion Shilling Governance Issues

Financial strain on the fund has been intensified by serious governance and transparency concerns. Auditor General Nancy Gathungu recently flagged KSh 26.8 billion in payments to various health facilities that lacked proper supporting documentation. The audit also uncovered alarming anomalies, including 3,235 duplicate birth claims and 6,392 cases of improbable repeat births. In one extreme instance of suspected fraud, a single patient was reportedly billed four times for open-heart surgery within a 24-hour period. CS Duale stated that the ministry is utilizing the audit findings as a tool to identify and rectify systemic leaks early in the transition phase.