Kenyans borrowed an average of Sh16,341 from digital lenders under the Central Bank of Kenya (CBK) in December 2025. This represents a significant increase of Sh2,424, or 17.4 percent, from Sh13,917 a year earlier. The growth in digital loans is attributed to an increase in the licensing of digital credit providers (DCPs), which jumped from 85 to 195 last year.
Total borrowing from digital lenders nearly doubled to Sh110.1 billion by December 2025, up 99.6 percent from Sh55.2 billion the previous year, according to CBK disclosures. This surge in digital lending has been driven by the growing demand for short-term credit, particularly for basic needs such as food and school fees. A survey by Tala, one of the top digital lenders, found that 45 percent of borrowers used loans to stock businesses, 37 percent for school fees, and 23 percent to cover daily needs.
The majority of digital borrowers are tapping loans for business and basic needs. Digital lenders have gained traction for their fast, easy access to credit, skipping credit bureau checks and instead using mobile money transaction history to set loan limits. This approach has opened the door for borrowers blacklisted by banks, saccos, or microfinance institutions to secure loans. The appeal also lies in instant disbursement, with funds sent straight to borrowers’ mobile money accounts.
The CBK reported that lending by DCPs continued to grow rapidly in 2025, driven by an increase in the number of licensed providers. Gross outstanding loans nearly doubled, rising by 99.6 percent, from Sh55.2 billion in December 2024 to Sh110.1 billion in December 2025. Over the same period, the number of licensed DCPs grew from 85 to 195. This growth has been driven by the increasing shift in customer preferences toward more convenient, technology-driven delivery channels.
Digital lenders’ loan books have outpaced microfinance banks, whose customer advances totalled just Sh29.29 billion by December 2025. The surge in loan accounts, outstanding credit, and licensed providers underscores the rapid growth of digital credit in Kenya’s lending landscape. For both consumers and businesses, digital lenders now serve as a key source of short-term credit, accessible directly through mobile phones and digital platforms.
The growth of digital lending has also raised concerns about the regulation of digital lenders. Despite a majority of the firms remaining unlicensed, the CBK has continued to license more providers, citing the need for greater oversight and consumer protection. The central bank has also reported a significant increase in complaints about digital lenders, which jumped five times in 2025.
The increasing reliance on digital lenders for short-term credit is likely to continue, driven by the growing demand for convenient and accessible credit. As the digital lending landscape continues to evolve, regulators and lenders will need to balance the need for innovation with the need for consumer protection and financial stability. KEY_POINT: Digital lenders’ loan books have outpaced microfinance banks, with customer advances totaling Sh110.1 billion by December 2025.
Key points
- The average digital loan size grew by Sh2,424, up 17.4 percent from Sh13,917 a year earlier.
- Total borrowing from digital lenders nearly doubled to Sh110.1 billion by December 2025, up 99.6 percent from Sh55.2 billion the previous year.
