Lilian Maina, who operates a groceries shop in a densely populated estate in Nairobi, has become increasingly attached to her mobile phone because it is a lifeline for her business.
The device has three critical apps that come in handy when she needs credit — Tala, Branch and Okolea.
“Being a small entrepreneur means that there are times I need cash to keep the business running,” she says. “These apps have made that possible, as I can apply for a loan and get the money in my M-Pesa account in minutes.”
Ms Maina is among Kenyans who are fuelling the rise of a vibrant alternative credit market, riding on the growth of the financial services sector and smartphone penetration.
Data shows that at least 60 per cent of the population has smartphones, which has made it possible for people to download mobile credit apps.
Since the government introduced an interest rate cap in 2016, the configuration of the credit market has shifted from the tightly regulated commercial banks, to microfinance institutions (MFIs) and savings and credit co-operative societies (Saccos) and then to mobile-based fintech firms.
Fintech companies have emerged to offer credit through the mobile phone, riding on t