Making Digital Credit Truly Responsible

We examine the evolving challenges with digital credit in Kenya and make recommendations for more responsible and customer-centric product delivery.

Digital credit has emerged as a new and profitable service offering that has a great potential to increase financial inclusion. Yet, if it is not carefully managed, digital credit runs a great risk to exclude, over-charge, and create over-indebtedness.

During the first half of 2019, The Smart Campaign and the Social Performance Task Force (SPTF) commissioned Microsave Consulting (MSC) to study the current state of digital credit in Kenya and formulated recommendations for how to make digital credit delivery safer and more customer-centric. We propose that regulations be put in place such that delinquencies and defaults among loans below some fixed amount not be reported to the credit bureau so as not to unduly burden consumers. We also call for increased public awareness campaigns about how credit bureaus work and the consequences of default so consumers will better understand the risks involved in borrowing.

More generally, the Smart Campaign recommends that both lenders and regulators consider adopting the digital credit standards and model regulations covering issues ranging from transparency, to the fair use of algorithms, to protection of customer data.


We appreciate the support of our partners.

This study was commissioned in collaboration with the Social Performance Task Force and Microsave Consulting. It was made possible with support from Agence Française de Développement.

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