Kenyan Digital Lenders Disbursed U.S.$4 Billion in 8 Years

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(file photo).
15 March 2023
Capital FM (Nairobi)
By Kevin Rotich

Nairobi — Digital lenders have disbursed a total of Sh500 billion in mobile loans to households and small businesses. 3,852,080,100

A total of eight million of them have received the funds over the last eight years.

This was announced after the Digital Lenders Association of Kenya rebranded to the Digital Financial Services Association of Kenya (DFSAK).

The rebrand is part of DFSAK mission to attract more players in the digital lending space to deepen financial inclusion.

"With a robust regulatory environment and increasing consumer interest, we expect the sector to keep deepening financial inclusion in the coming years," DFSAK chairman Kevin Mutiso said during the Digital Finance Summit 2023 in Nairobi.

A vibrant tech ecosystem and the opening up of Africa's digital economy are now seen as creating more opportunities for medium- and small-sized enterprises (MSMEs) that are increasingly hopping onto digital and social media platforms to acquire customers and new markets.

"We foresee demand for mobile credit rising as small local businesses turn to online marketing platforms and seeking growth funds beyond borders," Mutiso said.

Digital services are projected to add an extra $180 billion to Africa's GDP by 2025, according to the United Nations Conference on Trade and Development (UNCTAD).

Backing this trend is a near doubling of Kenya's Fintech Start-Ups, which will total $574.8 million (Sh71. 7 billion) in 2022, up from $292 million (Sh36.4 billion) in 2021.

DFSAK is now looking to ride on these positive market sentiments to rack up more funding for onward lending to the growing customer numbers and develop new digital financial services such as digital insurance, digital savings plans, and digital investment platforms.

"In the next phase, the Association is looking to overturn the shortfalls experienced in the last eight years including harmful debt collection practices still prevalent even as licensing continues," he added.

The Association is keen on addressing financial literacy challenges with consumers, which have for a long time been challenged by the lack of a comprehensive and unified strategy for the benefit of consumers.

Since September 17th, 2022, licensing of digital credit providers is still slow, as only 22 out of over 400 lenders have been approved.

Read the original article on Capital FM.

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