- M-Shwari accounts for 29% of the local market share, followed by KCB M-Pesa at 12%, then Equity Eazzy, Tala and MCo-op Cash at 4%, 1.8% and 1.3%, respectively
- 55 of every 100 people acquire loans from digital lending applications
- Most Kenyans prefer digital lending platforms due to convenience, easy access and fast loan remittance
Kenya has experienced massive digital credit lending services growth since the launch of M-Shwari in 2012.
Digital lending apps have additionally been fueled by increased food prices and unemployment rates, forcing citizens to run to almost anything that can put food on their table. Currently, the country boasts of over 40 digital credit providers.
M-Shwari accounts for 29% of the local market share, followed by KCB M-Pesa at 12%, then Equity Eazzy, Tala and MCo-op Cash at 4%, 1.8% and 1.3%, respectively.
The State of Digital Lending Report 2021 released by Reel Analytics, showed that 55 of every 100 people acquire loans from digital lending applications.
The study revealed that digital lending platforms were more popular in urban areas (66%) compared to rural areas (34%).
The data indicated that 59% of men had used digital lending platforms and had multiple digital credit providers compared to women who preferred a single brand.
“Most users of digital credit subscribers are aged between 30-34 years, constituting 26% and 22% of male and female beneficiaries, respectively.
Most Kenyans prefer digital lending platforms due to convenience, easy access and fast loan remittance,” the report stated.
The survey found that 35% of Kenyan digital borrowers use digital credit to meet day-to-day household needs, while 37% borrow for business reasons.
CBK to regulate digital lenders
In May 2022, the Central Bank of Kenya (CBK), asked all digital lenders to apply for licenses before September 2022.
CBK governor Patrick Njoroge said unregulated DCPs that have yet to apply for licensing have four months to the September 17, 2022, deadline.
“They should apply in good time as no extension will be granted after the application deadline of September 17, 2022,” Njoroge said in a statement.
List of popular digital lending platforms
1. Fuliza
Fuliza was Safaricom’s most popular loan product in the 2021 financial year.
According to the company’s 2021 annual report, Kenyans borrowed an average of Sh 1.4 billion daily from the Fuliza service that launched in 2019.
It recorded a 43.1% growth in 2021 after it disbursed Sh 502.1 billion in loans compared to Sh 351.2 billion in 2020.
2. M-Shwari
Safaricom launched M-Shwari in 2012.
A customer subscribed to the telco can access small loans using the service.
In 2021, Kenyans borrowed Sh 86.1 billion from M-Shwari, down from Sh 94.5 billion in 2020.
3. Equity Eazzy
The Equity Group Holdings product allows customers with an Equitel line to apply for and receive loans.
EazzyNet transactions grew by over 500% in the 2021 financial year from Sh18.9 billion to Sh 131.9 billion.
4. Tala
Tala has embraced the invention of mobile money transfer to provide easy loans to Kenyans.
The platform allows users to access quick loans of up to KSh 50,000 within minutes.
An Indian-American businesswoman Shivani Siroya, founded Tala in 2011. Besides Kenya, it operates in the Philippines, India and Tanzania.
The company is valued at $800 million (Sh93.8bn) according to Forbes.
5. Branch
Branch has disbursed over KSh 7.08 billion in loans to its over 4 million customers as per its website.
The lending app allows subscribers to access loans of put o KSh 100,000.
It also enables one to purchase airtime and data bundles direct from their Branch wallet.
The co-founders are Matt Flanery, who serves as its chief executive officer, and Daniel Jung, the chief product officer.
6. Zenka
Norwegian software maker Opera owns Zenka.
The platform started operating in Kenya in December 2018. A year later, Zenka topped as the most promising mobile loans platform in the Digital Tech Excellence Awards.
With the app, you can get a loan in five minutes.
In 2020, it was the most preferred mobile loan app in the Digital Tech Excellence Awards.
7. O-Kash
the online micro-lending service in Kenya is owned by Opera Group and operated by TenSpot Kenya Limited.
The app is available on Google Play Store and boasts over 1 million downloads.
