Digital Credit; Kenya: Consumer assessment to refine consumer protection principles

• Nov 8, 2023
• 1 min

Kenyan digital platforms offer innovative financial products, such as digital credit. But they face high default rates and access-related challenges. MSC conducted a BMGF-funded study to assess these issues and understand loan terms, consequences, and repayment behavior for people from the low-income segments.

Access to finance is crucial for financial inclusion. Digital platforms enable the rollout of innovative financial products, such as digital credit in Kenya, which led to increased uptake due to easy access and quick application processes. However, the credit bureau blacklisted clients who had loans unpaid for more than 90 days. BMGF funded a study focused on access and loan term transparency to understand the high default rate. MSC conducted market research, qualitative studies, and data analysis. The study yielded recommendations for effective and sustainable digital credit. As part of the study, the MSC team prepared the research, reviewed the literature, held stakeholder discussions, and generated a concept note.