At least 16.4 million loan disbursements have been made in the last seven years, since the first online lending platform was launched in Kenya.
According to a survey by Microsave Consulting, the rate of online borrowing has more than doubled in the last two years, with the number of defaulters escalating. Most defaulters are noted to have a loan of less than Ksh1,000 and already blacklisted with the various credit reference bureaus.
“Across Kenya, 16.4 million loans have been disbursed digitally since the launch of the first digital credit offering seven years ago. In the past two years alone, the number of digital loans issued has approximately doubled,” the firm noted in its report.
Kenyans seem to be turning away from the traditional bank loans, with the survey showing that 86 per cent of the loans that Kenyans took in the last two years were digital in nature.
The study found that young men below the age of 35 are the main borrowers, termed in the reports as “ideal borrowers”.
Two in three borrowers had taken multiple loans, indicating the possibility of taking one loan to settle another.
“This could reflect the low loan limits that fail to fulfill needs and the short tenures that increase pressure on repayment and require a new loan to repay the previous one,” the report indicated.
The survey was conducted last month across 50 digital lenders. The survey however did not reveal the amount disbursed.