More than half (52.79 percent) of Kenya’s total credit in the first quarter (Q1) of 2024 was issued through mobile loans, surpassing traditional loans from brick-and-mortar facilities, according to the TransUnion Kenya Q1 Market Analytics Report.

The report highlights that mobile loans were the most prevalent form of credit, with a total balance of Sh158.8 billion.

In the same period, 3.92 million new mobile loan accounts were opened, marking an 11.02 percent increase from the previous quarter, reflecting the growing preference for digital lending platforms in the country.

However, the TransUnion report also reveals that the average quarterly borrowing limit per borrower dropped by 7.48 percent, from Sh16,860 to Sh15,600. This suggests a more cautious approach by both lenders and borrowers in response

“The evolving regulatory environment played a role in contributing to more people applying for mobile loans, with licensed FinTechs now submitting data to TransUnion,” it added.

“The result is better insights into the overall
market and into the health of consumers, enabling lenders to make better informed decisions on credit applications.”

Additionally, millennials (aged 25-45) made up a significant share of the principal amounts in various loan categories, according to the TransUnion report. They accounted for 51.1 percent of mobile loans, 49.6 percent of personal loans, and 16.5 percent of asset finance, highlighting their active role in Kenya’s borrowing landscape.

“This demographic’s strong presence underscores the need for financial institutions to innovate and provide products that cater to the unique preferences and behaviours of younger borrowers,” said Morris Maina, Chief Executive Officer CEO at TransUnion Kenya.