Kenyans borrowed an average of Sh16,341 from digital lenders under the Central Bank of Kenya (CBK) in December 2025 as they increasingly tap mini loans for survival needs like food and school fees.
CBK data shows the average loan size grew by Sh2,424, up 17.4 percent from Sh13,917 a year earlier amid a jump in digital loans.
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 followed an increase in the licensing of digital credit providers (DCPs), which jumped from 85 to 195 last year, despite a majority of the firms remaining unlicensed.
A survey by Tala, one of the top digital lenders, showed that the majority of digital borrowers were tapping loans for business and basic needs.
It found that 45 percent of borrowers used loans to stock businesses, 37 percent for school fees, and 23 percent to cover daily needs.
‘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,’ said the CBK.
Digital lenders have gained traction for their fast, easy access to credit.
By skipping credit bureau checks, they open the door for borrowers blacklisted by banks, saccos, or microfinance institutions to secure loans.
Instead of demanding collateral, DCPs use mobile money transaction history to set loan limits and reward prompt repayment with higher borrowing bands.
The appeal also lies in instant disbursement, with funds sent straight to borrowers’ mobile money accounts.
‘With the continued shift in customer preferences toward more convenient, technology-driven delivery channels, coupled with the rise in the number of licensed DCPs, the banking sector has experienced significant growth in digital lending between 2023 and 2025,’ CBK reported.
By December 2025, digital lenders’ loan books had outpaced microfinance banks, whose customer advances totalled just Sh29.29 billion.
The surge in loan accounts, outstanding credit, and licensed providers underscores just how rapidly digital credit is reshaping 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.