Since M-Shwari launched in 2012, digital loan apps in Kenya have grown rapidly. High living costs have driven people to seek financial help beyond traditional savings, salaries, and bank loans.
A 2021 report by Reel Analytic revealed that 55 out of every 100 people in Kenya took loans from digital lending apps. The study also showed these services were more common in urban areas (66%) than in rural areas (34%).
“Most users of digital credit subscribers are aged between 30-34 years, constituting 26% and 22% of male and female beneficiaries, respectively. Most Kenyans prefer digital lending platforms due to convenience, easy access and fast loan remittance,” the report read in part.
The report also indicated that 35% of Kenyan digital borrowers used digital credit for daily household needs, while 37% borrowed for business reasons. These numbers have likely increased due to the rising cost of living.
As of early 2024, the Central Bank of Kenya had licensed 51 digital credit providers. When seeking credit, it’s important to use licensed digital loan apps to avoid exploitative practices and high interest rates often associated with unregulated providers.
In this article, we’ll take a look at some of the most popular digital lending platforms and their owners:
1. Fuliza
Safaricom’s M-Pesa overdraft facility, Fuliza, has been one of the company’s most impactful innovations since its launch in 2019. The number of Kenyans using Fuliza has steadily increased over the past few years.
Safaricom’s 2023 sustainability report showed that Fuliza users borrowed Sh. 19.86 billion in airtime. Additionally, M-Pesa transactions grew to over Sh. 2.3 billion in the 2022/2023 financial year.
2. M-Shwari
M-Shwari is a joint mobile savings and loan service venture by NCBA Bank and Safaricom. Launched in 2012, M-Shwari’s main purpose was to transform financial inclusion in Kenya.
M-Shwari is available to all Safaricom M-Pesa users, providing financial services to millions who were previously unbanked. Users can save as little as Sh. 1 and earn interest on their savings, with no minimum balance or fees.
Safaricom customers can easily access loans through M-Shwari, ranging from Sh. 1,000 to Sh. 1 million based on their savings history and repayment behaviour. The service also offers a lock savings feature, allowing users to set aside money for a specific goal and lock it for a set period.
3. Timiza
Timiza, offered by Absa Bank, is a digital banking platform that provides various financial services via its mobile app or by dialling the USSD code (*848#).
Timiza offers instant loans of up to Sh. 150,000 to both Absa and non-Absa clients, with limits based on creditworthiness and usage. Users can also save money and earn interest through the app.
It also allows for mobile money transfers, bill payments, airtime purchases, and insurance services.
4. Tala
Tala uses mobile technology to give Kenyans quick loans of up to Sh. 50,000 within minutes. Founded by Shivani Siroya in 2011, the company operates in Kenya, the Philippines, India, and Tanzania. Forbes had previously valued Tala at $800 million (Sh. 93.8 billion).
5. Branch
Branch has issued over Sh. 7.08 billion in loans to more than 4 million customers. Users can get loans of up to Sh. 100,000 through the app. It also lets users buy airtime and data bundles directly from their Branch wallet. The app was co-founded by Matt Flanery, the CEO, and Daniel Jung, the Chief Product Officer.
6. Zenka
Zenka is owned by Norwegian software company Opera and began operating in Kenya in December 2018. By the following year, it was recognized as the most promising mobile loan platform at the Digital Tech Excellence Awards.
Zenka offers quick loans, with funds available in just five minutes. It was also recognized as the top mobile loan app at the Digital Tech Excellence Awards in 2020.
