M-PESA Eyes Lending as Its Next Frontier, Courts European Capital

Lending has recovered recently. TechCabal reported that private sector credit growth rose from a contraction of 2.9% in January 2025 to 8.1% in March 2026, aided by Central Bank of Kenya rate cuts that brought average commercial lending rates down to roughly 14.7% from 17.2% in late 2024. Still, the industry's non-performing loan ratio climbed to 15.6% in March, keeping banks selective. That pushes many borrowers toward digital lenders and informal moneylenders, where Safaricom Money Transfer Services chief executive Andrew Mutha said annualised costs can reach 60% or even exceed 100%.

"There is pain. There is real pain," said Peter Gichangi, Safaricom's head of Super Apps, who added the company is open to discussions with partners "from Europe or wherever it is" willing to provide affordable credit.

Data as collateral

The core disagreement, executives argued, is less about available capital than about how risk is measured. Banks rely on collateral, audited accounts, and long relationships. M-PESA, serving over 30 million customers, instead sees a continuous record of payments, invoices, salaries, and bills, a dataset it already uses to set Fuliza overdraft limits and power products like M-Shwari and KCB-MPESA.

Gichangi told the podcast the company has hired someone to help build out its credit strategy, defining loan types, partners, and structure. Safaricom's bet, as TechCabal framed it, echoes firms such as Ant Group in China and Mercado Pago in Latin America, which built lending on transaction analysis rather than traditional banking criteria.

A platform, not a bank

Crucially, Safaricom and its M-PESA Africa unit do not want to become a bank. The plan is to act as the platform connecting capital with borrowers: banks supply regulated balance sheets, investors bring funds, and Safaricom contributes credit scoring, collections, distribution, and customer acquisition.

That structure explains why Gichangi's pitch was aimed at international investors as much as local lenders. TechCabal noted a parallel with M-PESA's origins, when banks dismissed low-income Kenyans as unattractive customers. The harder task now, executives conceded, is convincing lenders and investors to rethink decades of lending practice, though the payoff, they argue, is larger because credit builds businesses.

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