The availability of external finance for small and medium enterprises (SMEs) is a topic of\r\nsignificant research interest to academics and an important issue to policy makers around\r\nthe globe. Majority of entrepreneurs in the SME sector are still considered not credit\r\nworthy by most commercial banks because of their inability to fulfill certain banking\r\nterms and conditions. Hence, the aim of this study was to investigate the determinants of\r\nlending to small and medium enterprises by commercial banks in Kenya. To achieve the\r\nstudy objectives used a descriptive research was used. The study undertook a census of\r\nthe 43 commercial banks in Kenya. The study used secondary data from the annual\r\npublished report of commercial banks in Kenya for a period of 5 years from 2010-2014.\r\nThe data collected was analyzed through the multiple linear regression using the\r\nStatistical Package for Social Studies version 20. The study findings established that bank\r\nsize; credit risk and banks liquidity significantly influences lending to SMEs by\r\ncommercial banks in Kenya. In addition the study established that the volume of deposits\r\nand interests rates have no significant influence on lending to SMEs. Further, the study\r\nestablished that liquidity and the volume of deposits have a negative relationship with\r\nlending to SMEs while bank size, credit risk and interest rates have a positive relationship\r\nwith lending to SMEs. The study concluded that bank size, credit risk, liquidity, deposits\r\nand interest rates are major determinants of lending to small and medium enterprises by\r\ncommercial banks in Kenya and recommended that effective policies should be\r\ndeveloped to ensure commercial banks advance more credit to small and medium\r\nenterprises.