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The Digital Credit Revolution in Kenya: An Assessment of Market Demand, 5 Years On

Who are Kenya’s digital borrowers and how do they use their loans?
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Since the 2012 launch of M-Shwari, a mobile banking service which offers a savings account and access to digital credit, the market for digital credit has expanded rapidly in Kenya. Digital credit is now offered by the three largest Kenyan banks (Kenya Commercial Bank, Equity Bank, and Cooperative Bank), as well as a growing number of FinTechs and non-bank institutions. Digital credit providers have developed different models to score and deliver credit to customers.

To assess progress, FSD-Kenya, in partnership with the Central Bank of Kenya (CBK), Kenya National Bureau of Statistics (KNBS) and CGAP conducted a nationally representative phone survey with 3150 Kenyans to measure the size of the market and the key characteristics of the customer base. The survey aimed to answer the following questions:

  • Who are the digital borrowers?
  • What are loans used for?
  • What risks are emerging from digital credit use?
  • Has digital credit delivered on its promise?