A Digital Credit Revolution: Insights from Borrowers in Kenya and Tanzania

Identifying who is using digital credit, the ways it is used, and the risks borrowers experience is critical for understanding the role digital credit plays in borrowers’ financial portfolios and how it affects financial inclusion. A deeper understanding is also critical for identifying actions providers, policy makers, investors, and development actors can take to maximize the benefits of digital credit while minimizing risks.

This research shares insights from large-scale phone surveys of digital credit users and nonusers in Kenya and Tanzania to understand their experiences with digital credit. The study also aims to contribute to international discussions on responsible digital finance, including efforts of the Global Partnership for Financial Inclusion (GPFI) and the G20 on Principle 5 of the High-Level Principles for Digital Financial Inclusion. As the first large-scale demand-side surveys dedicated to these topics, the study emphasized identifying potential risks emerging from these new credit sources, The results shed light on market development and evolution in the two leading digital credit markets and provide insights on how more nascent markets might evolve.