A recent report by the Digital Financial Services Association of Kenya (DFSAK) found that the average Kenyan borrows Ksh. 500 million per day, or Ksh. 15 billion per month.
More than 8 million Kenyans, or roughly 16% of the country’s total population, actively use digital lending services on a monthly basis, according to the survey.
“With its ability to draw in investment, provide employment, and help millions escape poverty, the digital lending sector has emerged as a key driver of economic expansion. Improvements have been made to consumer protection; in 2019, there were 4,000 calls with complaints; today, there are just a few dozen each month,” according to DFSAK Chairman Kevin Mutiso.
Noting that it has improved consumer protection, DFSAK praised the Business Laws (Amendment) Act 2024, which went into effect in January and subjected digital credit companies to Central Bank of Kenya regulation.
By implementing a more stringent code of conduct, the association has already reduced the number of customer complaints from 4,000 per month to a small number. To create additional protections, it is also collaborating closely with the Office of the Data Protection Commissioner.
In order to maintain sustainability as the business expands, the group is currently advocating for tax reforms, specifically with relation to bad debt allowances.
