Digital lender eyes expansion amid rising demand for SME loans

Digital credit provider Jijenge Credit is set to increase its loan sizes and expand into new markets, including Thika and Kitengela, to meet the growing demand for small business funding.

Chief Executive Officer Peter Macharia said the firm is considering opening physical outlets as part of its growth strategy, citing an improved business environment and recent reductions in lending rates by commercial banks following the Central Bank of Kenya’s (CBK) decision to lower the benchmark rate.

"This has also been necessitated by the improving business environment currently witnessed as well as the recent move by the Central bank of Kenya that had forced local commercial banks to push lower their lending rates,” said Macharia.

Several banks, including Co-operative Bank and Kenya Commercial Bank (KCB), have reduced their lending rates by up to 1% after the CBK lowered the Central Bank Rate (CBR) to 10.75% and the Cash Reserve Ratio (CRR) to 3.25%. The move is expected to make credit more affordable, spur borrowing, and drive economic growth.

Jijenge Credit, which offers logbook loans, mortgage financing, check-off loans, and title deed loans, reports an increasing number of SMEs seeking larger loans to scale operations. The firm provides loans ranging from Sh50,000 to Sh10 million to vehicle owners across different categories.

According to the 2024 Financial Sector Deepening Kenya (FSD Kenya) report, Kenya has about 7.4 million SMEs, with only 21% operating with licenses. Many of these businesses face financing challenges, making alternative lenders like Jijenge Credit crucial in bridging the credit gap