Capital Markets

Kenyans top global uptake of mobile money-based app loans


Nearly four in 10 Kenyans used mobile money to get a loan, the highest number globally. FILE PHOTO | NMG

Nearly four in 10 Kenyans used mobile money to get a loan, the highest number globally, a new report shows, highlighting the growing prevalence of app-based borrowing use in the country.

The report from the international association for mobile network operators GSMA shows 36 percent of Kenyans acquired loans through their phones in 2021.

This signals the popularity of mobile loans as well as growth of credit providers, including banks and alternative lenders expanding in the consumer loans sector.

“There is generally higher uptake of loans in markets with higher prevalence of mobile money, particularly Kenya (36 percent). India (18 percent) and Pakistan (16 percent) are the exception — although both countries have low to medium mobile money prevalence, uptake of loans is still relatively high,” the report read in part.

The popular mobile lending platforms include M-Shwari, Tala, Fuliza, Branch, KCB M-Pesa and Zenka.

Since the onset of Covid-19, the percentage of Kenyans who used mobile money more frequently to get loans was 32 percent, 39 percent on a less often basis while 28 percent had no change; their loan acquisition remained the same and was not affected by the pandemic.

“In a separate study highlighting actual use of mobile-enabled credit, analysis of anonymised M-Pesa transactional data in Kenya revealed that around 50 percent of customer accounts were using financial services such as credit,” the report read in part.

Mobile money has over the years grown to be a lucrative revenue stream for telcos and credit providers as customers use them to send cash, pay for goods and services and take short-term credit.

In Kenya, the total number of registered mobile money accounts stands at 67.94 million as at February 2022, official data from the Central Bank of Kenya shows.

Transactions performed on mobile money providers include paying for commodities and services, taking out loans, opening savings accounts, making payments for government services, and betting, among others.

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