Kenya’s banking industry is increasingly integrating digital credit into conventional lending models, allowing customers to access financing within their everyday transactions. The shift is changing how banks distribute credit, assess borrowers and generate lending income while creating new opportunities to serve short-term liquidity needs.
Co-operative Bank provides an example through its Kamilisha digital overdraft, launched in November 2025. Between January and July 2026, the product disbursed Kshs 2.4 bn, averaging nearly Kshs 400.0 mn per month, while cumulative disbursements reached Kshs 3.3 bn since launch. Borrowing limits are determined through AI-powered credit scoring based on customer transactions and income patterns.
Digital credit is developing alongside conventional bank lending. Co-op Bank’s net loans and advances increased by 18.1% to Kshs 462.2 bn in H1 2026 from Kshs 391.3 bn in H1 2025, while customer deposits increased by 13.4% to Kshs 621.3 bn from Kshs 547.7 bn. Net interest income increased by 13.0% to Kshs 33.2 bn from Kshs 29.4 bn.
KCB demonstrates the potential scale of mobile lending. Mobile loan disbursements increased by 25.0% to Kshs 314.0 bn in H1 2026 from Kshs 251.2 bn in H1 2025, equivalent to Kshs 1.7 bn in daily disbursements. Net loans increased by 13.3% to Kshs 1.2 tn from Kshs 1.1 tn.
The difference between the two models highlights the scalability of digital distribution. Kamilisha targets immediate liquidity gaps within customer transactions, while KCB’s volumes demonstrate how mobile infrastructure can support lending at significantly larger scale.
For banks, transaction data provides another advantage by enabling lenders to assess income patterns, spending behaviour and repayment capacity. This can support more targeted credit limits and pricing while reducing the time and cost of loan origination.
However, faster access also increases the importance of credit-risk management. Co-op Bank’s gross NPL ratio declined by 3.1% points to 14.2% in H1 2026 from 17.3% in H1 2025, while KCB’s NPL ratio declined by 3.6% points to 15.1% from 18.7%.
Digital credit is therefore becoming an integrated component of bank lending rather than simply an alternative delivery channel. The ability to combine transaction data, digital distribution and disciplined credit assessment could increasingly determine how banks capture short-term and recurring borrowing demand.
