Kenyans swinging from one lender to another on unfit credit products- report

Many Kenyans still cannot access credit due to lack of products that meet their needs, despite the country's high financial inclusion ranking globally.

This is according to a report by online lender Tala, unveiled on Thursday titled ‘A three billion person challenge’ by Atlantic Council GeoEconomics Centre that shows that 16 per cent of Kenyans are financially unhealthy.

Tala Kenya general manager, Ann Stella Mumbi, said that although financial inclusion in the country has grown rapidly from 26.7 per cent in 2026 to the current 84.8 per cent, credit products are not addressing many borrowers needs.

This, she said, has driven many borrowers into a debt trap, swinging from one online lender to another to repay the other, ultimately being locked out of the digital credit market when sustainability fails.

Others are forced to pick credit levels way ahead of their incomes, while others are forced to borrow from multiple lenders to meet their primary needs.

“The problem we began solving ten years ago is still very much present today. While the issue of access to credit has positively progressed, usage is still a problem,’’ Mumbi said.

According to her, the main reasons adults in Low and Middle Income Economies (LMIEs) do not use formal digital financial services are affordability, lack of trust in service providers, and lack of products to meet their needs.

The report shows that there are 4.84 billion adults in low and middle-income economies, including Kenya, of which 2.5 billion (51%) have accounts but do not borrow formally.

Furthermore, of the 24 per cent who borrow formally, about a billion do not necessarily have the type of credit they need.

Mumbi noted that the lack of trust in financial services providers is the critical factor in play.

“Therefore, the findings and recommendations from this report have reinvigorated our resolve to provide our customers with choice, awareness, and control, and continue to treat them as true consumers who have potential like the rest of us. “

To realise this, Tala has launched the Global Debt Collection Dignity Initiative (DCDI), whose mission is to advance the development of a model framework for regulating debt collection firms and practices; adaptable by national authorities in Kenya and the rest of the markets the company operates in.

Over the last decade, Tala has served 13 million customers across three continents, disbursing $7 billion (Sh898.8 billion) in credit.

Tala’s plan aligns with the Central Bank of Kenya’s four-year National Financial Inclusion Strategy (NFIS) launched in December, aimed at expanding equitable access to quality financial services.

According to CBK governor Kamau Thugge, the new strategy is an urgent response to structural weaknesses that are dragging millions into financial vulnerability.

“Over-indebtedness, gambling and weak consumer protection undermine financial health, especially among youth and low-income households,” Thugge said.

He regretted that the country had recorded a troubling decline in financial health.

National data shows that Kenyans, who are financially healthy and able to meet expenses, absorb shocks and plan for the future, fell has dropped from 39.6 per cent to 18.3 per cent in the past decade.