Kenya’s digital lending market expanded sharply in 2025, with the value of outstanding loans held by regulated digital credit providers almost doubling to Sh110.1 billion, according to the Central Bank of Kenya.
The increase came as more lenders entered the regulated market and the number of digital loan accounts climbed significantly.
CBK’s 2025 Bank Supervision Annual Report shows that gross outstanding loans by licensed Digital Credit Providers rose 99.6 per cent, from Sh55.2 billion in December 2024 to Sh110.1 billion a year later.
Over the same period, the number of loan accounts rose by 71 per cent, from 3.9 million to 6.74 million.
The number of licensed digital lenders also more than doubled. CBK licensed 110 providers during 2025, taking the total from 85 at the end of 2024 to 195 by December.
The regulator said the growth reflected a continued shift towards digital channels, with lenders offering products through mobile applications and USSD services.
The products cover a wide range of needs, including short-term personal loans, emergency credit, business financing, agricultural loans, education loans and asset financing.
Despite the sharp rise in the overall loan book, the average loan size changed only modestly. CBK data shows it stood at about Sh16,341 in December 2025, compared with Sh14,017 a year earlier.
That suggests the expansion was driven largely by a greater number of loan accounts and lenders rather than a dramatic increase in the typical amount borrowed.
Mobile money remains central
The growth of digital lending comes as mobile financial services remain deeply embedded in everyday life in Kenya.
The 2024 FinAccess Household Survey found that mobile money was used by about 23.2 million adults, making it the most widely used financial service in the country.
The survey also found continued growth in access to formal financial services. CBK, the Kenya National Bureau of Statistics and Financial Sector Deepening Kenya reported that access to formal financial services and products reached 84.8 per cent in 2024, up from 83.7 per cent in 2021.
For many borrowers, the appeal of digital credit lies in its speed and accessibility. Applications can be made through a phone, often without the need to visit a bank branch.
But the rapid expansion has also kept consumer protection at the centre of the regulator’s agenda.
Regulation catches up with growth
CBK began licensing and supervising digital credit providers after amendments to the Central Bank Act and the introduction of the Digital Credit Providers Regulations in 2022. The framework was introduced after concerns about practices among previously unregulated lenders, including high costs, aggressive debt collection and misuse of personal information.
In its latest report, CBK said its oversight has increasingly focused on pricing transparency, responsible lending, data governance and compliance.
The regulator said it had licensed 195 digital credit providers by the end of 2025, while continuing to tighten scrutiny of the sector.
The market has continued to expand in 2026.
In July, CBK announced the licensing of another 25 digital credit providers, bringing the total number of licensed providers to 252. The regulator said it had received more than 800 licence applications since March 2022.
By May 2026, licensed digital lenders had issued 8.37 million loans valued at Sh150.56 billion, according to CBK.
The figures point to a rapidly expanding formal digital-credit market. They also underline the challenge facing regulators as more Kenyans turn to their phones for access to short-term credit.
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