Over 4 million Kenyans denied mobile loans - Metropol

Fresh data from Financial Sector Deepenin (FSD) Kenya now shows that mobile loans top rejections at 33.7 percent, followed by mobile money providers at 16.9 percent.

According to Credit Referencing Bureau (CRB) Metropol, Kenya’s credit market continues to face mounting trust deficit with over 4 million adults or 14 percent of the population being denied loans, even as rising defaults and steep interest rates continue to weigh on lenders and borrowers.

Speaking at the opening of the National Credit Market Convention, Metropol Managing Director Sam Omukoko linked high borrowing costs to the twin pressures of elevated interest rates and rising Non-Performing Loans (NPLs).

“The perception of lenders in the Kenyan market, and generally in Africa, is that risk premium is still very high in terms of default, and therefore interest rates have to remain high to compensate lenders for the high expected defaults,” said Mr. Omukoko.

Digital Financial Services Association of Kenya (DFSAK) Chairman Kevin Mutiso, on his part, said: In the informal sector cash is still moving. It’s not growing as fast but cash is still moving, so we’ve actually seen a reduction in non-performing loans within the digital lending ecosystem. And the main reason is we’re using data better, the CRB, and we’re using AI algorithms to help us identify and do credit decisions.”