Q1 2020 Highlights
Kenyan Economy Set to Slow as Effects of COVID-19 Pandemic Take Hold
- Digital to become the ‘new normal’ for banks and financial institutions in face of pandemic
- Demand for credit grows in the areas of trade, mobile and personal loans, but new business loans fall
- Fraud an increasing concern as annual losses grow to an estimated KES 13.3 billion
The newly released TransUnion Q1 2020 Kenya Market Analytics Report revealed an increased demand for credit in the banking sector in the areas of trade, mobile and personal loans. Non-performing account rates rose across product types, which will push the market to find solutions for pricing loans in line with anticipated risk. Government measures to cushion the economy against the aftermath of COVID-19 present opportunities for lenders to support customers and protect against an expected increase in loan defaults.
“The credit landscape in Kenya has transformed significantly in the last decade and continues to change at pace. To respond effectively, lenders need a comprehensive view of industry trends, account performance and consumer behaviour. The Q1 2020 report provides a valuable baseline from which to analyse and understand the impact of the COVID-19 pandemic on the market and adapt strategies accordingly.”
- Samuel Tayengwa, Product Director, TransUnion Rest of Africa.
Overview of the formal lending market in Kenya, Q1 2020(1) Formal lending is a measure of financial inclusion. Formal financial products and services are defined as those offered by financial service providers that are regulated and supervised by an independent statutory government agency (including the Central
(2) Data from Q1 2020 shows no significant drop in the total number of accounts recorded by the bureau. We’re likely to see a decline in the Q2 2020 data, reflecting the impact of the COVID-19 pandemic on the credit market from April 2020.
About the TransUnion Kenya Market Analytics Report
TransUnion’s Kenya Market Analytics Report provides a comprehensive view of the credit landscape and detailed analyses of market trends, opportunities and risks.
Based on bureau data, the report looks at major lending categories: mobile loans, personal loans, asset finance, overdraft, credit cards, mortgages and trade finance. The report provides data and commentary on each category, including: market overview (lending limits, number of active and performing accounts, number of lenders), originations (new accounts opened), account performance (defaults) and account risk.
Lenders can use the report to analyse market dynamics over an entire business cycle and understand changes in consumer behaviour.