Despite increasing access to financial services in Sub-Saharan Africa, the majority of adults in the region continue to rely on informal lending sources such as family, friends, and community savings groups.
However, Kenya stands out as a regional leader in the use of mobile money for formal borrowing, according to the World Bank Global Findex 2025 report.
Across the region, only 12 per cent of adults borrowed money through formal channels such as banks, credit cards, or mobile money accounts in the past year. In contrast, more than 45 per cent turned to informal sources.
The report distinguishes borrowing types based on the source. Formal borrowing refers to credit accessed through regulated institutions such as banks, microfinance providers, post offices, credit cards, or mobile money accounts.
Informal borrowing involves unregulated sources like family, friends, and neighbourhood lenders, while semiformal borrowing includes community-based groups such as rotating savings and credit associations.
Kenya stands out in the region for its advanced use of mobile money services as a formal borrowing tool.
In 2024, 32 per cent of Kenyan adults borrowed from mobile money providers, the highest share in the region.
Notably, 25 per cent of adults in Kenya borrowed exclusively through mobile money, showing a clear shift from traditional financial institutions to digital platforms. Among Kenyans who borrowed formally, 86 per cent used mobile money accounts, making it the dominant source of formal credit in the country.
This trend aligns with broader patterns observed in other economies with high mobile money adoption, such as Ghana and Uganda.
“Kenya is a pioneer in mobile money adoption, and it shows in borrowing trends. In 2024, 32 per cent of adults borrowed from mobile money providers, with 25 per cent relying exclusively on these platforms,” the Global Findex 2025 report states.
“In Kenya and Uganda, the share of formal borrowing remained about the same in 2024 as that in 2021, but a larger share of formal borrowers got a loan through a mobile money account in 2024.”
The loans accessed through mobile money are typically small in value, short in duration, often repayable within one to two weeks, and carry high effective interest rates.
While not transformative, the report notes that these loans can modestly improve financial well-being and consumption patterns, without reducing savings or assets.
Still, the contrast between formal and informal borrowing remains stark across the region. While 24 per cent of adults across low- and middle-income countries borrowed formally in 2024, informal borrowing continues to dominate Sub-Saharan Africa, especially among women, rural populations, and low-income households.
Notably, 31 per cent of adults borrowed only from family or friends, and 12 per cent tapped into other informal sources, including buy-now-pay-later services or store credit for groceries.
“On average, 24 per cent of adults—40 per cent of borrowers—borrowed formally in 2024. They got credit through a loan from a bank or similar financial institution or through the use of a credit card or a mobile money account. Formal borrowing’s share of total borrowing varied across low- and middle-income economies,” the report states.
The data also shows clear demographic disparities. Adults in the poorest 40 per cent of households were 15 percentage points more likely to borrow informally than those in the wealthiest 60 per cent.
Rural borrowers also faced disadvantages, being 19 percentage points more likely than their urban counterparts to rely solely on informal sources. Gender disparities persisted as well: across low- and middle-income countries, 22 per cent of women borrowed formally, compared to 26 per cent of men.
Although formal borrowing has increased over the past decade, from 15 per cent in 2014 to 24 per cent in 2024, the gap between formal and informal credit access remains wide in Sub-Saharan Africa.
“The share of adults who borrowed informally only—that is, semiformally,or from family or friends, or from other sources but not formally—varied by region from more than 45 per cent of adults in the Middle East and North Africa, South Asia, and Sub-Saharan Africa to just 19 per cent of adults in East Asia and Pacific.”
