Digital lenders top Kenya's consumer complaint list despite reforms

It's 8 am on a sweltering Nairobi morning, and 27-year-old Esther Wairimu is already facing a daunting day ahead. She's still reeling from the aftermath of a loan she took from a digital lender, Mwananchi Credit, in March 2025. The loan, initially valued at KES 100,000 ($775), had ballooned to an unmanageable KES 250,000 ($1,929) after the lender slapped on a string of hidden charges. The repossession of her vehicle, a prized possession she'd spent years saving for, was the final blow. As she navigates the labyrinthine process of seeking redress, Esther is far from alone, she's part of a growing number of Kenyans who've fallen prey to the darker side of digital lending.

In the year leading up to June 2025, complaints against Kenya's digital lenders surged to 355, a staggering 430% increase from the 67 cases recorded the previous year. The Competition Authority of Kenya (CAK) notes that digital lenders now account for nearly two-thirds of all consumer complaints in the financial services sector, with 564 out of 915 cases logged during the period. Microfinance institutions and Savings and Credit Cooperative Organisations (Saccos) trail far behind, with 113 and 68 complaints respectively. Commercial banks, often seen as more traditional and trustworthy, recorded a paltry 28 complaints.

The sharp rise in complaints comes despite a 2022 overhaul of Kenya's laws, aimed at bringing digital credit providers under the supervision of the Central Bank of Kenya (CBK). The move was meant to curb the predatory practices that had long plagued the industry, including high borrowing costs, misuse of borrower data, and aggressive debt collection tactics. However, the CAK's annual report suggests that the licencing regime has yet to have a significant impact on the number of disputes between lenders and borrowers.

For Esther and countless others, the fallout from digital lending has been nothing short of devastating. False and misleading representations, unconscionable conduct, and unilateral changes to loan terms are just some of the common complaints leveled against digital lenders. A case against African Capital Limited, a licenced digital lender, highlights the egregious nature of these practices. A borrower alleged that a KES 177,720 ($1,375) loan had ballooned to KES 500,000 ($3,869) after additional charges were imposed. Following the CAK's intervention, the disputed charges were waived, and the loan account was closed.

As the competition watchdog continues to grapple with the scale and complexity of these complaints, it's clear that Kenya's digital lending landscape remains a ticking time bomb. The CAK's report serves as a stark reminder of the need for more stringent regulations and greater transparency in the sector. For Esther and thousands of others like her, the quest for justice and redress remains an ongoing battle.

• Complaints against digital lenders in Kenya rose to 355 in the year leading up to June 2025, a 430% increase from the 67 cases recorded the previous year.
• Digital lenders account for nearly two-thirds of all consumer complaints in the financial services sector.
• The Competition Authority of Kenya (CAK) has attributed the rise in complaints to the rapid expansion of digital lending platforms and the widening access to credit.
• The CAK's annual report highlights the need for more stringent regulations and greater transparency in the digital lending sector.

As a writer, it's disheartening to see the human cost of mismanagement in a sector that's meant to provide much-needed financial support to vulnerable communities. The rise in complaints against digital lenders is a stark reminder of the need for more effective regulation and greater accountability in the industry.