By Morris Maina, CEO, TransUnion Kenya
Here is a question worth considering: how much growth are Kenya’s lenders leaving on the table simply because they cannot see the full picture?
It is not a rhetorical question. Across the market, 43 per cent of consumers remain thin-file, meaning they do not have enough traditional credit information to be confidently assessed. Nearly one in every two potential customers can therefore appear almost invisible to a lender—not necessarily because they are risky or unable to repay, but because the available data does not adequately tell their story.
That is the real cost of the data gap. When lenders cannot see enough of a consumer’s credit journey, they risk overlooking creditworthy customers, mispricing risk and limiting opportunities for responsible growth and financial inclusion.
Rethinking What the Data Gap Really Costs
When people think about data challenges in lending, their minds often go straight to defaults and credit losses. That is understandable, but it is only part of the story.
The real cost also appears in missed customers who were creditworthy all along, revenue opportunities that quietly walk out the door, lending decisions made with less confidence and pricing that does not accurately reflect actual risk.
Ultimately, all of this adds up to slower business growth. In a market as dynamic as Kenya’s, that is a cost lenders can increasingly ill afford.
Kenya’s credit landscape is changing rapidly. Digital lending has transformed how consumers access credit, particularly for younger people entering the formal credit market for the first time. At the same time, lenders are pursuing growth while remaining alert to portfolio quality after a demanding credit cycle.
The question is whether lenders can grow without compromising portfolio performance. The data suggests they can—but only if they understand today’s borrower better than they understood yesterday’s.
A New Face of Kenyan Credit
The future of credit growth is increasingly being shaped by new-to-credit consumers, particularly Gen Z and Millennials.
These generations are entering the market differently from those before them. Their access point is digital. Their preferred products are often short-term and mobile-driven. Their expectations centre on speed, convenience and flexibility.
Thin-file rates reveal how visibility differs across generations. While 26.6 per cent of Millennials remain thin-file, the figure rises to 32.9 per cent for Gen Z, 45 per cent for Gen X, 64.1 per cent for Baby Boomers and 89.6 per cent for the Silent Generation.
The opportunity is clear. Kenya’s lenders must leverage richer credit insights and broader data ecosystems to responsibly extend credit to consumers whose potential is not fully reflected in traditional credit records.
But risk models must evolve alongside changing consumer behaviour. Yesterday’s borrower is not today’s borrower, and today’s borrower will not necessarily resemble tomorrow’s.
Signs of Recovery, but the Need for Vigilance
There are encouraging signs in Kenya’s credit market. The non-performing loan ratio climbed to a 20-year high of 17.6 per cent in early 2025 before easing to 15.5 per cent by January 2026.
Lower interest rates, stronger recoveries and improving economic activity have contributed to the improvement, signalling growing borrower resilience. But at 15.5 per cent, non-performing loans remain elevated against historical norms.
The strongest lenders will not simply react when risk has already materialised. They will identify emerging signals early enough to make better decisions.
Many lenders instinctively associate frequent borrowing with higher risk. Yet the data paints a more nuanced picture. Gen Z borrowers opened an average of more than 10 loans per month during the observation period, with some accumulating more than 70 facilities.
At first glance, that may appear alarming. However, many of these borrowers carry relatively small balances and rely heavily on digital products such as mobile loans and Fuliza.
The lesson is straightforward: if our understanding of borrower behaviour remains static, we risk misclassifying good customers and missing genuine growth opportunities.
The cost of the data gap is therefore not only about approving the wrong borrower. It is also about misunderstanding the right one because the available information does not provide a complete view of their behaviour, repayment capacity and credit journey.
Experience Matters
Credit velocity—the speed at which borrowers accumulate new obligations—offers another important signal.
Within six months, 50.2 per cent of Gen Z borrowers had opened two or more additional facilities, compared with 33.6 per cent of Millennials. Demand is strong, younger borrowers are highly engaged and risk can shift quickly.
But the most meaningful signal is not always the amount borrowed. Often, it is the pace at which obligations accumulate and how borrowers manage them over time.
Analysis of consumers who are 30 or more days past due reveals another important pattern: delinquency is highest among borrowers early in their credit journey and generally declines as they gain experience.
Borrowers with one facility recorded a 30-plus days past-due rate of 17.4 per cent. For those with two to three facilities, the rate fell to 15.6 per cent. It dropped to 12.5 per cent among those with four to five facilities and 9.6 per cent among those with six to 10 facilities.
The implication is significant. Credit maturity can sometimes matter more than credit complexity.
Borrowers learn. Experience can help consumers establish stronger repayment habits and become more familiar with managing multiple obligations.
More than 80 per cent of borrowers remain current on their obligations. First-time borrowers recorded a 30-plus days delinquency rate of 17.4 per cent, while repeat borrowers performed noticeably better at 12.3 per cent.
The strongest lending decisions, therefore, require more than a single snapshot. They require an understanding of the borrower’s broader journey.
Seeing the Full Picture
Credit shopping reinforces this point. Gen Z consumers recorded an average of nearly 78 hard credit enquiries and accounted for more than 70 per cent of all observed credit facilities, yet maintained the lowest 30-plus days past-due rate at just 2.1 per cent.
Older generations generated fewer enquiries but recorded higher delinquency rates.
The finding is important: enquiry activity alone is not a reliable predictor of repayment stress. The strongest lenders evaluate enquiries alongside repayment history, exposure growth and borrower maturity to develop a more complete picture of risk.
And that brings us back to the central challenge.
No single institution sees the full customer. An individual lender sees one relationship. A broader credit ecosystem can provide visibility across multiple relationships and credit experiences.
Three messages stand out. First, the 43 per cent of Kenyan consumers who remain thin-file represent one of the market’s largest opportunities for responsible growth and financial inclusion.
Second, Gen Z and Millennials are reshaping the future of credit, creating opportunities for lenders that can correctly interpret emerging behavioural signals.
Third, closing the data gap through broader and richer credit insights will become increasingly important as indicators such as credit velocity, repayment history and lender diversification become stronger tools for understanding risk.
The lenders that thrive in the next decade will not simply be those with the most customers. They will be those that understand their customers better.
That understanding starts with better insights and a willingness to see the full picture.
At TransUnion Kenya, our mission remains Information for Good. The opportunity to grow responsibly, deepen financial inclusion and lend with greater confidence is right in front of us.
The question is whether we will seize it.
