Bank borrowing in Kenya shrinks as many opt for mobile money loans - World Bank

More Kenyans are now opting to borrow loans from mobile money providers as bank borrowing shrinks.

The Global Findex 2025 report by the World Bank found that in 2024 formal borrowing in Kenya recorded an increase from 2021, where majority sought funds from mobile money accounts.

The findings show an increase in mobile money borrowing as borrowing through banks continued to shrink. Here, 32 percent of adults borrowed from their mobile money providers, including 25 percent of adults who borrowed only in this way. Mobile money borrowers made 86 percent of formal borrowers.

Notably, a number of Kenyans are borrowing money from their friends and family members while others borrow from semi-formal institutions such as clubs and Chamas.

The report also compares mobile money borrowing among men and women in Kenya, showing that women are less likely (16%) to borrow money through digital wallets.

Another source of mobile money borrowing is government owned financial inclusion programme -Hustler fund.  

Kenya having a high number of mobile money users, most agricultural payments are equally made through the phone. 71 percent of recipients of agricultural payments were paid digitally in Kenya. This differed from Uganda, where most agricultural payments were made in cash.

Kenyans also pay for utility bills including water, electricity or trash collection through digital wallets. This is while the adoption of digital merchant payments increased from 37 percent in 2021 to 56 percent in 2024.

The World Bank names Kenya among economies with high online payment bill. Other countries include China, Brazil, Kazakhstan and Mongolia.

In 2024, the number of Kenyan adults who made digital merchant payments in grocery stalls also increased.

“This suggests possible opportunities for merchants without established physical storefronts to leverage records of their digital payment inflows as proof of income when applying for credit,” the World Bank report states.

In analyzing financial needs, the World Bank found that Kenya is among countries where adults are more likely to worry about school fees than any other financial issue.