Mobile credit apps adoption and continuous use in a growing digital economy

Abstract

Since the launch of Commercial bank of Africa’s MShwari in 2012, Kenya’s first digital banking product which offers a savings account and access to digital credit, the market for digital credit has expanded rapidly in Kenya. Digital credit is now offered by most commercial banks as well as privately developed loan apps from able lenders. In the first two years, CBA through its M-Shwari product had already dished out over 20 million loans to 2.6 million borrowers while Kenya Commercial Bank’s KCB-Mpesa helped them to grow from 200,000 new loans per year to about 4,000,000 (Totolo, 2017). A recent report from FSD Kenya indicates that 29 per cent of mobile phone owners in Kenya have borrowed from MShwari and there are over 49 loan apps in the country. Also, according to the report, in Kenya’s digital lending market share, M-Shwari is leading followed by KCB MPesa at twelve per cent, Equity Eazzy at four per cent, Tala at 1.8 per cent and MCo-op Cash at 1.3 per cent (Mbogo, 2018). This paper aims to examine the determinants of Mobile Credit Apps adoption and continuous use in a growing digital economy, case study Kenya. The researcher used descriptive survey research design. The target population was smart phone users in Nairobi, its environs and 2 rural areas with a good number of mobile smart phone use. The researcher selected a sample of 600 users from the targeted areas. The researcher used purpose random sampling to select the respondents. Data was collected from the primary source. The collection of primary data was done using a combination of structured survey questionnaires and personal interviews, which were administered to the respondents. The data was edited then cording and tabulation was carried out using SPSS. The data was analyzed using qualitative and quantitative techniques. The findings revealed that the economic factor has a significant effect on the use of mobile credit in Kenya. The research was done on some 600 individuals in Nairobi County and its environs. Practical implications– The findings offer FinTech providers, financial institutions and the government with a better understanding of what contribution digital credit brings to the improvement of individuals’ livelihoods. The research contributes to the application of new mobile technology in the financial sector. The findings also help financial institutions consider mobile technologies when aiming to improve financial access to the unbanked individuals.