DRIVERS INFLUENCING DIGITAL CREDIT AMONG RESIDENTS OF NYERI MUNICIPALITY, KENYA

Abstract

The purpose of the study was to establish the drivers that influence digital credit among the residents of Nyeri municipality Kenya. The study objectives were to determine how access to information influences digital credit and how ease of access to loans influences digital credit. To support the study objectives, neoclassical economics theory and behavioral economics theories were used. The target population was 46969 and the sample size comprised of 383 individuals who were 18 years of age. A pilot study was conducted in Nyahururu town where ten questionnaires were administered. Purposive sampling was utilized to identify respondents. A descriptive crosssectional survey was undertaken. The primary data were collected using a structured questionnaire.

Data were analyzed using descriptive and inferential statistics. The findings suggest that ease of

access to digital

credit has created flexibility in borrowing with a correlation of 0.689. This has eliminated costs such as travel and documentation. Additionally, digital credit has enabled borrowers to access credit they could not access through traditional banking with a correlation of 0.763. Respondents also noted that digital credit has streamlined their repayment discipline with a correlation of 0.653, making borrowing smoother. To improve digital credit use in Nyeri municipality, lenders should work to enhance borrower education. This will ensure that borrowers understand the costs associated with borrowing on digital platforms. Lenders should also consider providing flexible repayment options and ensuring borrowers have access to support services when needed. Further studies on digital credit in Kenya can build on this study by exploring the influence of other factors such as age, education, and income level on digital credit use. Additionally, studies can focus on the impact of digital credit on household financial stability and the broader economy.