james wika 
- As Loan Defaults Rise in Kenya, TransUnion Urges First-Time Borrowers to Check Their Credit Health with Nipashe
- With nearly 1 in 6 adults defaulting on loans, credit education and tools like TransUnion’s Nipashe app are being positioned as key safeguards for new and young borrowers.
With mobile loans now widely accessible,Kenya has seen a sharp rise in digital borrowing, but also a worrying increase in defaults.According to the 2024 FinAccess Household Survey, 16.6% of borrowers defaulted on loans in 2024, up from 10.7% in 2021.
In response, TransUnion Kenya is urging young and first-time borrowers to regularly monitor their credit status using the Nipashe app, a free tool designed to help individuals track and improve their credit scores.
TransUnion Kenya says the surge in credit access especially among under-35s has not been matched by financial literacy, leading many borrowers to fall into avoidable debt cycles.
The risks are especially high for first-time borrowers who may be unaware of how loan defaults, late payments, or even small borrowing decisions can significantly affect their ability to access future credit.
“Credit, when used wisely, can be a powerful enabler, opening doors to education, entrepreneurship, and personal growth,”said Maina.
“But without a solid foundation in financial literacy, we risk seeing many young people excluded from future economic opportunities because of poor credit decisions made.”
While formal financial access has increased to 84.8% of Kenyan adults (FinAccess 2024), the reality behind the numbers is more complex.
Digital loans have become the entry point for millions but without adequate understanding of interest accumulation, loan terms, or credit scoring, many borrowers are left vulnerable.
Nipashe addresses this gap by allowing users to:
– Check their credit reports instantly via mobile app or SMS.
– Spot errors or loan defaults before they spiral.
– Understand their credit scores and what influences them.
– Receive personalized tips to improve financial standing.
Borrowers can access Nipashe by downloading the app or texting their name to 21272.
“Encouraging smart credit use isn’t just about personal finance, it’s about building a generation that can participate meaningfully in Kenya’s economy,” added Maina.
“When young people are given the tools to make responsible financial choices, the ripple effect is felt across families, communities, and the country at large.”
Maina agrees that early education around responsible credit use is now more important than ever and has provided the below five tips to start smart.
Top 5 Smart Credit Tips for First-Time Borrowers
Check Your Credit Status Early:Knowing where you stand financially is the first step.Checking your credit report (using the Nipashe App or sending a text with your name to 21272) helps you identify and address any potential issues before they escalate.
Only Borrow What You Can Afford to Repay:Missed loan payments not only damage your credit score, but they can also lead to penalties, reduced trust from lenders, and financial stress.
- Start with Simple Credit Products:Ease into credit by using manageable products like mobile loans or retail accounts. Consistently repaying these builds a positive financial track record.
- Don’t Use Credit for Non-Essentials:Don’t rely on credit to finance non-essential purchases or entertainment.
- Learn How Credit Scores Work:Understanding what factors impact your score, like payment history, credit utilisation, and loan mix can help you make better borrowing decisions.
To learn more visit Kenya’s Nipashe TransUnion Africa
