Kenyan youth, who mostly fall under the millennial generation have the biggest share and are dominating credit dynamics within the fintech sector.

Statistics from TransUnion Kenya show that most Millennials have access to digital tools. Up to 80 percent of the fintech business is driven by the Millennials and Generation X, according to the report.

“We conducted a consumer survey last year and one of the things we picked out is that 98 percent of consumers want and believe that taking loan facilities changes their lives or drives their financial growth,” Trans Union Kenya Chief Executive Officer (CEO) Morris Maina stated.

Speaking in Nairobi when he unveiled the Q4 2023 Kenya Credit Industry and Insights Report, Maina said that the cost of credit continues to be high noting that in December 2023, the Central Bank of Kenya (CBK) adjusted the base lending rate to 12.5% from 10.5% thus increasing the cost of credit for the consumers.

Maina said that the report which highlights the key trends in the credit sector for the period of coverage enables all players across the ecosystem to gain critical insights and also offers an in-depth analysis of the macroeconomic impact on credit trends in the country.

Maina noted that there were about 39 banks that submit data to the bureau and this is not only done as a requirement but also as a mandate by the CBK. 

He added that banks continue to have the lion’s share in terms of loan and loan balances i.e. loans that are issued and loan balances that exist at about Sh.5 trillion. This is also attributed to affordable online loans offered by digital lenders.

“It is time now to bring those people from the Hustler Fund back into the bureau ecosystem so that they can now stimulate credit beyond what they are getting,” the CEO announced.

He noted that one of the challenges faced by banks is getting data analytics or data science as a central function within a bank.

Trans Union Kenya, Product Manager, Anne Njeru said that when the interest from a bank increases, it means that loan installments go up thus reducing the disposable income that people have. Accessing Business loans Kenya by millennials has also been on the rise. 

“Lenders and many of the players and fin techs operating banks are trying to balance a very thin line between balancing growth and tightening their credit policies because now people don’t have the disposable income that we had previously,” Njeru noted.

She added that efficiency has to become key in terms of how lenders not only run their operations but also how they target their customers. For instance, digital lending companies such as kenfasp2p, Tala and Mshwari have made it easy for borrowers to access credit, unlike traditional lenders.