This article is based on a conversation from Voices & Visions, a podcast produced through a partnership between Tutto Passa Agency and TechCabal, which explores the people and ideas shaping Africa’s innovation economy.
The first problem M-PESA, the mobile money service owned by telco giant Safaricom, solved was moving money. The company now believes the harder one is lending.
Nearly two decades after transforming how Kenyans pay, save, and transfer money, Safaricom is turning its attention to a credit market where banks are reluctant to lend beyond established borrowers, pushing millions of small businesses and households to expensive digital loans and shylocks.
“There is pain. There is real pain,” says Peter Gichangi, Safaricom’s head of Super Apps, in a recorded conversation on Voices & Visions, a podcast backed by Tutto Passa Agency and TechCabal. “If there are people interested in partnering with us, from Europe or wherever it is, to provide accessible, affordable credit in the market, we are open to having those discussions.”
Gichangi’s remarks point to what could be M-PESA’s next area of growth. Having built one of Africa’s largest digital payments platforms serving over 30 million customers, Safaricom is betting it can use the same playbook to expand access to credit, a market where traditional lenders like banks continue to treat as too risky.
While Kenya is one of Africa’s digitally connected financial markets, access to affordable business credit remains limited. Small and medium-sized enterprises (SMEs) account for more than 90% of businesses and employ millions of people, yet they consistently cite financing as one of their biggest constraints. Many operate without audited financial statements, formal collateral, or lengthy banking histories, making them difficult for traditional lenders to assess.
In the past two years, lending has recovered, but cautiously. After successive interest rate cuts by the Central Bank of Kenya (CBK), private sector credit growth has recovered from a contraction of 2.9% in January 2025 to 8.1% in March 2026.
Average commercial lending rates have fallen to about 14.7% from 17.2% in late 2024. Yet banks continue to carry bad loans, with the industry’s non-performing loan ratio rising to 15.6% in March, making lenders selective about where they deploy capital.
Many households and small businesses opt for digital lenders charging steep interest rates.
“The demand for money is there,” says Andrew Mutha, chief executive of Safaricom Money Transfer Services. “Banks are saying, ‘Look, you’re too risky.’ There’s a digital lender somewhere who is willing to give you credit. However, the risk is too high, so the interest rate is very high.”
He says many borrowers end up paying annualised borrowing costs that can exceed the value of the original loan.
“Quickly, that becomes 60%, sometimes even 100% plus over the year,” Mutha says.
For Gichangi, the problem is not whether there is capital, but how most traditional lenders assess risk.
“The banks still don’t believe there is enough data on these businesses to make correct credit decisions,” he says. “Most businesses end up having to get financing from informal areas.”
Measuring risk differently
The disagreement between banks and Safaricom is not really about lending, but about access to financial information.
Kenyan banks have historically measured risk using collateral, audited accounts, employment records, and years of banking relationships. Those requirements work well for large companies but not for a kiosk owner, an online merchant, or a boda boda operator.
With millions of transactions daily, M-PESA sees things differently. Every payment received, supplier invoice settled, salary paid, utility bill cleared, and customer purchase processed creates a history. It means the telco has accumulated one of the richest financial datasets on consumer and business behaviour, which makes it easy to lend.
The company already uses that information to determine its Fuliza overdraft limits and other lending products like M-Swari and KCB-MPESA. It now plans to apply the same model to business finance.
“We recently got a person joining the M-Pesa team to support on the credit side,” Gichangi says. “Defining how this will look like, what type of partners do we need, what type of loans do we want to get into, and how do we structure this going forward.”
Safaricom believes that if digital payments can reveal how a business earns, spends and repays money, perhaps transaction history can become a more accurate measure of creditworthiness than collateral alone.
It follows developments elsewhere. Companies such as Ant Group in China and Mercado Pago in Latin America have built lending businesses by analysing daily transactions rather than relying on conventional banking tactics. Safaricom thinks M-PESA has reached a similar level.
The platform
Interestingly, Safaricom and its money services subsidiary M-PESA Africa are not keen on becoming a bank. Instead, it wants to become the platform that connects capital with borrowers, and that distinction matters.
Globally, banking is being unbundled. Tech firms own customer relationships and distribution, while licensed financial institutions provide capital and manage regulatory risk. Safaricom appears to be pursuing the same model.
“We partner with financial institutions,” Gichangi says. “Banks bring in the financing, we bring in the platform, help with the credit scoring and collections.”
The model also explains why Gichangi’s appeal was directed at international investors as much as Kenyan lenders.
Rather than asking global funds to build lending operations from scratch, Safaricom is offering M-PESA as the platform. Investors bring capital while banks provide regulated balance sheets, then Safaricom contributes customer acquisition, behavioural data, collections infrastructure, and distribution.
History repeating itself?
There is a striking parallel between Safaricom’s ambitions today and M-PESA’s origins.
When M-Pesa was conceived, banks viewed millions of low-income Kenyans as commercially unattractive. Opening an account often required minimum balances, employer letters, and referrals from existing customers.
“You needed a referral. You needed to maintain a minimum account. Some banks were asking you to come with an introduction letter from your employer,” says Mutha.
Those requirements effectively locked millions of informal workers out of the banking system. Safaricom’s response was to redesign financial services around the customer instead of asking customers to adapt to banking, which fundamentally changed Kenya’s banking system.
Gichangi and Mutha are arguing that the next breakthrough in financial inclusion will come from making better lending decisions. Their company bets that years of transaction data can tell lenders more about the health of a business than collateral, employer letters, or audited accounts ever could.
If that holds, M-PESA’s role will evolve from just a payment infrastructure to a credit one as well. It is a far more difficult challenge than digitising payments.
Convincing people to send money by phone required changing consumer behaviour. Convincing banks and investors to rethink how they measure risk will require changing decades of lending practice. However, it is also a much bigger prize because payments generate transactions, but credit builds businesses.
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Adonijah Ndege
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