Kenya is often associated with safaris and national parks. Many may think of the Great Migration or the world-class athletes that come out of Kenya such as its marathon runners. With a country full of so much beauty, majesty and talent it is easy to become blind to the poverty that exists in it. However, alternative credit in Kenya is one approach that is helping expand access to finance for some borrowers.

Understanding the Credit-Access Gap

Poverty in Kenya is multidimensional, consisting of food insecurity, lack of access to clean drinking water and unemployment. More than 15 million people, approximately 30% of Kenya’s population, live in arid and semi-arid lands (ASALs). Between July and October 2026, around 2.7 million people in the ASALs were experiencing Crisis or worse acute food insecurity. More than 883,300 children aged 6-59 months in the ASALs and refugee camps were expected to require treatment for acute malnutrition between April 2026 and March 2027.

Economic pressures affect both rural and urban areas. According to World Bank assessments, approximately 800,000 young people enter Kenya’s labor market each year, while fewer than 100,000 secure formal, labor-law-protected jobs. Furthermore, World Bank economic projections warn that inflation and higher commodity prices carry the scenario risk of pushing between 1 million and 2.4 million additional Kenyans below the poverty line.

For many small-scale business owners, securing capital from traditional commercial banks remains difficult because of documentation, collateral requirements and a lack of formal credit history. Consequently, informal enterprises and self-employed individuals often operate without access to traditional banking channels.

How Alternative Credit and Digital Scoring Operate

Alternative credit is a type of non-traditional financing that is for borrowers who cannot normally access traditional bank lending. Several organizations are creating alternative credit routes in Kenya, helping small business owners and entrepreneurs receive access to funds for their businesses and ventures.

• NCBA Bank and Enterprise Training: Commercial institutions like NCBA provide digital banking, insurance and cash flow guidance to small businesses. Partnering with Strathmore Business School to establish the Enterprise Development Programme, the bank has enrolled 354 customers in a 16-week curriculum designed to strengthen leadership and business management skills.
• JUMO’s Digital Lending Platform: Operating since 2015, JUMO uses mobile wallet and cellular transaction data to build behavioral credit profiles for individuals who lack traditional pay stubs or bank accounts. Partnering with financial networks like Standard Bank’s Sustainable Finance Team, JUMO reports more than $10 billion in lifetime loan disbursements and over 300 million individual loans facilitated across its operational markets.
• TransUnion and FICO Scoring Solutions: To help lenders evaluate thin-file borrowers, TransUnion Kenya utilizes alternative data sources such as mobile networks and digital wallets. While credit bureaus in other global markets have observed risk-predictability improvements of 20% to 30% and approval-rate increases of 15% to 20% using advanced scoring frameworks like CreditVision Variables, these tools assist lenders in managing portfolio risk while evaluating non-traditional applicants.

Conclusion

Expanding financial inclusion and alternative credit options can provide micro-entrepreneurs with capital to manage cash flow and invest in their ventures. However, credit also carries repayment obligations and financial risks. Rather than viewing borrowing as an automatic solution to poverty, responsible alternative credit can provide a potential pathway to livelihood support and economic participation.

– Lara Lewis

Lara is based in Wakefield, RI, United States and focuses on Good News and Politics for The Borgen Project.

Photo: Pexels