Eight million Kenyans and small businesses have borrowed Kes500 billion in mobile loans from digital lenders over the last eight years.
The announcement comes after the Digital Lenders Association of Kenya rebranded to the Digital Financial Services Association of Kenya (DFSAK) to attract more players in the digital lending space to deepen financial inclusion.
DFSAK chairman Kevin Mutiso noted that with a robust regulatory environment and increasing consumer interest, they expect the sector to keep deepening financial inclusion in the coming years,
Speaking during a Digital Finance Summit 2023 in Nairobi, he stated that a vibrant tech ecosystem and the opening up of Africa’s digital economy will create 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.
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“We foresee demand for mobile credit rising as small local businesses turn to online marketing platforms and seeking growth funds beyond borders,” Mutiso said.
Kenya’s Fintech Start-Ups contributed to the Country’s Gross Domestic Product by Kes71. 7 billion in 2022, up from Kes36.4 billion in 2021.
DFSAK is now looking to ride on the 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.
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