A new survey by TransUnion shows that millennials in Kenya now hold 51.1pc of total mobile loans issued in the first quarter of the year which is equivalent to Ksh 81.1 billion.
According to the Kenya Market Analytics Report by the global information and insights company covering January to March 2024 period, Kenya had 15.83 million mobile loan accounts out of which 8 million were active.
“Q1 2024 highlighted the millennial cohort as a driving force within Kenya’s credit market. This significant demographic continues to engage actively with various loan products, suggesting its central role in shaping current and future credit trends,” says TransUnion said in the report.
TransUnion says mobile loans exhibited an observable growth in both the issuance of new accounts and cumulative value, signalling a climate of increased borrowing. However, there was a noted reduction as a result of loan limits placed by digital lender.
Increased borrowing by millennials also saw mobile loans remain the most common form of credit in Kenya, accounting for 52.8pc of all active loan accounts which totalled 29.98 million accounts.
The group which is aged between 25 and 45 years also accounted for 49.6pc of personal loans, and 16.5pf of asset finance.
“This group’s evolving preferences and financial behaviour highlight the need for lenders to tailor their products and services, ensuring they meet the unique demands of this increasingly influential consumer segment,” the firm states in the report.
During the first three months of the year, 3.92 million new accounts were created representing a 11.02pc increase when compared to the fourth quarter of 2023.
However, the average quarterly borrowing limit per borrower decreased by 7.48pc from Ksh 16,860 to Ksh 15,600 indicating a measured approach by both lenders and borrowers in the first quarter’s economic climate, TransUnion said.
During the period under review business loans accounted for the largest share of Kenya’s total loan book of Ksh 5.02 trillion with Ksh 1.71 trillion worth of loans issued representing 34.03pc.
“Kenya has a dynamic and evolving lending market, with diverse credit products and solutions available that respond with agility to consumers’ and businesses’ needs. While some challenges remain, efforts towards extending financial inclusion even further, along with technological advancements, are shaping the country’s future credit market,” said Morris Maina, TransUnion Kenya Chief Executive Officer.
Personal loans, mortgage loans and trade finance followed with Ksh 1.09 trillion, Ksh 646.25 billion and Ksh 539.67 billion respectively.
The banking sector which has 39 licensed commercial banks held the largest stock of loans issued at Ksh 4.84 trillion which is equivalent to Ksh 96.34pc of total loan book. Microfinance lenders followed with Ksh 78.90 billion, and Saccos with Ksh 53.52 worth of loans issued during the period.
The report further shows a growth in Non Performing Loans in the first quarter of growing by 20.8pc year-on-year to Ksh 613.1 billion compared to Ksh 507.7 billion recorded in the same period last year
By Ronald Owili