27 Percent of Kenyans are Digital Borrowers – FSD Kenya

A report released by FSD Kenya indicates that Kenya’s digital lending space continues to grow as new players continue to venture into the seemingly lucrative digital space.

The report, The digital credit revolution in Kenya: an assessment of market demand, 5 years on, indicate that 27 percent of Kenyans are digital borrowers with about 17 percent of them being 90-day active borrowers.

According to the report, 23 percent of Kenyans do not have or own a mobile phone while 51 percent own a mobile phone but never borrowed digitally.

Currently, FSD says that Kenya has at least 6 million unique digital borrowers with the digital credit market being led by CBA’s M-Shwari but new market entrants are catching up.

According to the report, M-Shwari has already disbursed 230 billion shillings in terms of loans since inception in 2012 and Kenya Commercial Bank, the largest institution by asset size in Kenya, now provides 90 percent of its loans through the KCB Mpesa platform. Equity Bank reported the disbursement of 57 billion shillings since 2014.

M-Shwari controls 14.8 percent of the digital borrowing market followed by KCB M-Pesa with 6.3 percent. Equity Bank’s Eazzy controls 2.7 percent while Tala and Co-op Bank’s MCoop Cash have 0.9 percent each. Branch, on the other hand, has 0.3 percent.

The current 5 digital lenders are:

1. M-Shwari
2. KCB M-Pesa
3. Equity Eazzy
4. Tala
5. MCoop Cash

35 percent of Kenyan phone owners have tried at least one digital lender with 19 percent of them currently borrowing a digital credit and 16 percent have used a digital credit in the past.

Digital lenders in Kenya have been blamed for exploiting their customers for charging higher interest rates while taking advantage of the fact that the sector is currently unregulated.

There are calls for the Central Bank of Kenya (CBK) to regulate digital lenders. Currently, at least 500,000 Kenyans are listed at the CRB with digital lenders being blamed.

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