This is a statement from the FinAcess report* that we feel summarizes the digital credit industry in Kenya and Africa as a whole.
“Since [..] 2012, the number of digital lenders and loans disbursed has grown substantially in Kenya. Advances in credit scoring, few regulatory barriers and the widespread use of mobile phones and mobile money have enabled growth of the digital lending industry, giving borrowers a quick and convenient option for credit. However, industry practices around pricing, marketing and debt collection have raised concerns. In addition, the widespread negative listing of digital borrowers in credit reference bureaus points to the difficulty many borrowers have in repaying digital loans.
The latest FinAccess survey conducted between October and November of 2018 found that 13.6 percent of adults (18+) nationally (3.42 million adults) had used a digital (mobile banking or app) loan in the year prior to the interview. To put this into context, consider that 9 percent of adults reported using a traditional loan from a bank or non-bank financial intermediary and 45 percent of adults reported using a loan from informal sources such as friends or a community savings group in the past year.”
Tribbe is starting by focusing on the 45 percent of adults using a loan from informal sources such as friends or a community savings group in the past year. This is because they are out of options that work for them. They really never had any options working in their favor.