• The number of new negative credit listings fell sharply from 2.2 million in 2019 to 933,551 in 2023.
• In the five years to 2023, the number of unique borrowers increased from 7.5 million in 2019 to 11.4 million, with male borrowers making up the majority.
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Men still borrow more compared to women but equally top the default list, according to a new market stud.
The study on Kenya’s credit market landscape reveals that digital loans particularly by male borrowers dominate.
This coming at a time borrowers are increasingly shying away from credit to finance their needs.
Financial Sector Deepening Kenya’s senior policy specialist, Francis Gwer, said while the number of borrowers has risen, the total value of loans has declined, with Sh2.067 trillion issued in 2019 compared to Sh1, 937 billion in 2023.
Banks account for over 90 per cent of both the volume and value of digital and non-digital loans.
In the five years to 2023, the number of unique borrowers increased from 7.5 million in 2019 to 11.4 million, with male borrowers making up the majority.
On average, 6 million male borrowers and 4.3 million female borrowers access credit each year.
Male borrowers received 61.4 percent of the total loans and 71.1per cent of the total loan value over the five-year period.
Digital loans are far more common, with approximately 270 million new digital loans worth Sh1.512 trillion issued, compared to 7.8 million non-digital loans valued at Sh8.282 trillion.
“While many of the building blocks that underpin an efficient and effective retail market are in place, available evidence points that the provision of appropriate and affordable credit remains a challenge,” said Gwer.
He pointed out that in the period there has been a decline in the average value of non-digital loans, which dropped from 8,353 in 2019 to 4,555 in 2023, a 45per cent decrease.
Additionally, the number of new negative credit listings fell sharply from 2.2 million in 2019 to 933,551 in 2023, partly due to regulatory changes and improved borrower repayment behaviour.
Women have shown better repayment histories than men, with men accounting for 64 per cent of negative listings over the five-year period.
The study, based on data from Creditinfo CRB, provides a detailed analysis of credit patterns from January 2019 to December 2023, covering borrower demographics, loan types, and credit providers.
Interestingly, despite the public perception that negative credit listings prevent future loans, 69 per cent of borrowers with negative records managed to repay their loans and were later approved for new credit.
The survey showed that most borrowers who have a negative record have an outstanding loan balance of between Sh1, 001 to Sh5, 000.
A higher proportion of borrowers initially listed as having repayment difficulties with their loans (negative record) managed to fully repay them off after seven months and within one year.
Creditinfo CRB, regional manager Kamau Kunyiha, said that advancements in comprehensive credit reporting and real-time data sharing could further enhance financial inclusion and market development.
“The Credit Information Sharing (CIS) mechanism has significantly advanced since its inception in Kenya. The transition from negative-only reporting to the bureau to comprehensive full-file reporting to the bureau marked a pivotal moment, fostering innovation and financial inclusion,” said Kunyiha.
“Data gathered throughout this evolution has proven invaluable for market growth and innovation. Further advancements, such as incorporating all credit sectors and enabling real-time reporting, have the potential to elevate the CIS mechanism to new heights.”