Determinants Of Uptake Of Digital Credit By The Youth In Institutions Of Higher Learning In Kisumu, Kenya

Abstract

With the advent of Mpesa, Kenya is a hub for digital credit and for youth in Kenya Opesa, Tala, M-shwari, The Branch, Timiza are no strange names. This study sought to explore the determinants of uptake of digital credit by financial service providers and FinTech amongst the youth in in institutions of higher learning Kisumu, Kenya. The study sought to identify the major determinants of uptake of digital credit on college students in higher learning institutions; Technical Vocational Education and Training - TVETs and universities in Kisumu, Kenya. In terms of scope, the study focused on ages 18- 35 years, male and female at two (2) universities; KCA University and Maseno University, and two (2) TVETs- Kisumu National Polytechnic and Kenya Institute of Management (KIM). The study used both primary and secondary data through informal interviews, questionnaires, comprehensive desk review of bibliographic research and policy analyses. The study targeted a population of 18,700 youth with a sample of 377 students. The sample size was determined using a 20% approximation for the desired sample size for the study. The researcher personally administered the questionnaires and involved data clerks to reach more students. The actual sample size for this study was arrived at proportionately through the Krejcie & Morgan’s method. The Statistical package for Social Scientist software (SPSS) was used to analyse the collected data. Both descriptive and inferential statistics were used in presentation of the results. The study findings were that government regulation and credit terms were most significant determinants of uptake of digital credit. Sensitization and social influence were also found to moderate uptake of digital credit. While the paper may not project the best model for digital lending, it’s hoped that policy makers, development finance institutions, FinTech executives, investors, academia will draw more input for a broader inclusive digital credit.