Digital credit for all? An empirical analysis of mobile loans for financial inclusion in Kenya
Year: 2024
Type: article
Study design: Observational Study
Abstract: Digital credit has shown considerable success in Kenya and is expected to provide opportunities for individuals excluded from formal loans because of their lower socioeconomic status. However, evidence supporting the greater positive impact of digital credit on financial inclusion than that of traditional loans is lacking. This study employs a multinomial logistic regression to investigate the impact of digital credit services, particularly mobile banking and FinTech loans (MBLs and FTLs), on financial inclusion in Kenya. MBLs appear to be less accessible to vulnerable populations, such as women, low-educated groups, and casual workers although both MBLs and FTLs are equally accessible to rural populations. In contrast, FTL services show no such constraints in terms of accessibility for women and low-income workers. This disparity indicates the relative inaccessibility of MBLs to vulnerable groups compared to that of FTLs; however, note that greater loan access does not always benefit vulnerable groups.
Authors: Minjin Kim, Maren Duvendack
Institutions: Yonsei University, University of East Anglia
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W4402531592