Determinants of Digital Credit Applications Adoption and Continuous Use in Kenya Case Study of Nairobi and its Environs.

Abstract

The major goal of this research was to investigate the determinants of digital credit applications adoption and continuous use in Kenya. Digital credit is the borrowing and paying of loans using a digital platform. Since the world’s first digital credit solution was initially launched in Kenya over eight years ago, the market has expanded very rapidly opening up the economy and financial sector in a manner never experienced before. These loan disbursements happlicationen via mobile networks with clients using their smart phones and other gadgets to easily request and receive credit facilities through suggested applications. Nowadays, most commercial banks and other able lenders offer digital credit via privately developed applications, which have the ability to quickly and efficiently disburse very expensive short-term loans. This descriptive-analytical study was conducted to check the motivation behind the ever-growing use of these financial technologies. This was done on a targeted population of 600 smart phone users drawn from Nairobi County, its environs and 2 rural towns through purposeful random sampling. Data was collected using reliable and valid questionnaires and the data sets were analyzed using IBM’s SPSS version 23 (Statistical package for social sciences). Qualitative data analysis was done using content analysis on the emerging independent variables (technological, economic and social factors) and the dependent variable. Then inferential statistics, which included regression and correlation analysis, were carried out to derive the determinants of digital credit applications adoption and continuous use. In total, 420 smart phone users responded to the survey, which represented about 70% of the targeted population. There was a significantly positive correlation between technology and the dependent variable (β3=0.580, p=.000). Also, the economic factor had a very significant correlation with the adoption and continuous use of digital credit (β1=0.362, p=.000). In conclusion, the findings indicated that the social factor had little significance in influencing the adoption and continuous use of digital credit applications. However, the technological and economic factors positively determined the adoption and continuous use of digital credit applications in Kenya. The study recommends that more research be conducted on the underlying variables to unearth any deeper motivating factors to this continuous unregulated and expensive borrowing.