Digital Lenders Push for Credit Market Reforms to Unlock Capital for Underserved

Digital lenders in Kenya are calling for the removal of regulatory and structural barriers in the credit market to unlock access to capital for unbanked and underbanked populations.

Digital Financial Services Association of Kenya (DFSAK) believes that such reforms would attracting much-needed investment into the informal economy.

“Our next big move is improving the financial health of the consumer,” said DFSAK Chairman Kevin Mutiso.

“Kenya has made great strides in achieving financial inclusion, but we must now focus on whether consumers are financially healthier or can they meet daily needs, withstand financial shocks, and invest in their future?”

The government recently announced plans to integrate fintech into the national investment framework.

According to State Department for Industries, the integration is aimed at enhance access to affordable capital, improve digital credit scoring models, de-risk small exporters, and promote real-time market data and contract enforcement, all intended to boost investor confidence.

Also Read: AI Use in Digital Credit to Boost Financial Inclusion, Say Experts

“Our Ministry is creating an ecosystem where both local and international investors can scale confidently and securely,” said Industrialization Secretary Professor Erastus Gatebe during the just concluded Surfin’ AI Fintech Forum in Nairobi.

This even as the state now urges sector players to deepen their collaboration with Kenya’s fintech and industrial sectors. The goal is to co-develop cutting-edge solutions that empower businesses, support sustainable investments, and position Africa as a key player in the global digital economy.

Data from DFSAK shows a growing appetite for digital credit in Kenya, with over 8 million Kenyans approximately 16% of the population borrowing digitally each month, totaling Ksh.15 billion monthly in loans.

DFSAK said its have made strides to ensure consumer protection in the sector, with monthly consumer complaints having dropped from 4,000 to a minimal number over a stricter code of conduct.

The Office of the Data Protection Commissioner signed a deal with Mutiso-led DFSAK to enhance data privacy safeguards, contributing to increased lender compliance and trust in digital credit platforms.