How Zenka Finance is Changing Digital Lending in Kenya

Robert Masinde, chief executive officer at Zenka Finance

The recently formed digital lender is redefining the credit landscape in the country

Seven years since Kenya launched the world’s first digital credit solution, the market for digital credit has expanded rapidly in the country.

Digital credit has become a leading source of credit in Kenya and that it is mostly used to finance working capital and day-to-day consumption needs. However, various studies suggest that many borrowers are struggling to repay.

With this hindsight, Zenka Finance has introduced an innovative way of digital borrowing. “We looked at the statistics and realized there is a market we can comfortably serve. There is need to provide financial solutions in a way that gives people peace of mind and balance in achieving fulfillment in their lives,” says Robert Masinde, chief executive officer at Zenka Finance.

Zenka was coined from a combination of two words.

Zen– achieving a balance

Kash-an African derivation of cash.

Among the techniques the lender first adopted was outpacing competitors in the development of products that appeals to customers in a unique way.

To begin with, their app offers first time borrowers loan free of any interest or related charges. “We want our customers to experience our services without incurring any costs,” says the CEO.

The firm has also ensured that repeat borrowers can graduate to larger and more affordable loans as they build positive credit histories over time.

Loan limit on the app is capped at Ksh 20,000. However, this is set to increase in the future in line with the firm’s aim to diversify its product offering and scope.

Despite many borrowers having the best intentions of repaying loans on time, they are often faced with uncertainties, says the executive. “Rather than dealing with defaults, we found it credible to extend repayment period as a result. This offers borrowers more time to offset their outstanding loans.”

A few months after they launched, their services have been well received in the market, demonstrating that the sector needed such interventions.

While most of the digital lenders have shied away from multiple platforms, the lender availed its services across many channels. Zenka services are now available to Android users, iOS users and USSD.

“We do not want to limit anybody. That is why we made it available across these channels,” says Masinde.

Customer experience

Other than increasing accessibility of its services, the lender is enhancing the experience of the clients it serves through a call centre.

According to Masinde, it is among the few financial institutions that boast of having a fully functional customer experience centre. “Our communication channels cuts across all platforms” he says adding that, “We make use of emails, telephone and social media to engage clients. This support runs 18 hours a day.”

He further notes that today’s businesses must embrace technology to survive. Those companies that will fail to innovate could soon go out of business. Just like technology, data is becoming an important part of the lending industry. Indeed more companies are using data to score their customers’ creditworthiness.

Zenka Finance deployed a chatbot named Zena on Social Channels to enhance its speed of communication and engagement with customers. It also uses statistical and machine learning techniques to analyze data and understand customer’s lending risk, as well as working in conjunction with credit bureaus in credit decision making.

Credit is meant to spur the social and economic potential of a community. It should be used for a good cause. Thus, it makes sense for borrowers to repay, advises the executive. “Most of the borrowers repay, otherwise we wouldn’t be in business.”

“Our loans are mainly disbursed via mobile money which has a limit on the amount of money one can disburse. We are now exploring ways in which we can expand our offering and increase our loan limits. Going forward we will be looking to set up physical branches across the country and increase our touch points to customers.”

Importance of digital lenders

Mr. Masinde argues that there is no denying the fact that digital credit has expanded the scope of financial services in Kenya. FSD Kenya indicate that there are over 6 million Kenyans with access to technology that can deliver micro-loans within seconds and build a credit history that can, in theory, give them access to larger and cheaper loans in the future. Millions of others who own low-end phones can access loans and savings products via their mobile devices.

Digital loans are fast, easy to obtain, short-term, and are available from numerous bank and non-bank institutions. “Gone are the days when you needed a bank account to access loan facilities. You can now do it from the comfort of your phone,” he explains. These represent a tremendous step for formal financial inclusion.

Different sources estimate that digital borrowers tend to borrow frequently, and it is, therefore, important to build better mechanisms to monitor consumer protection and over indebtedness. Masinde believes that digital lenders must do business ethically and with a human face. He sits as the chairperson at the recently formed Digital Lenders Association of Kenya whose key priority is to promote professionalism in the industry.

Going forward, Zenka Finance aims to strengthen its products offering and ensure that customers get unrivalled services in the market. Besides Kenya, it looks forward to set up operations in Uganda, Rwanda and Ghana.

“The ultimate aim is to grow the business and become more diversified in the financial industry,” he ends.

The CEO at a glance

  • He studied at Oxford University-UK.
  • Holds B.Comm. (Finance) degree from University of Nairobi
  • CPA (K)
  • He has a wealth of experience as a banker.
  • He has worked with Citi Bank and Standard Bank of South Africa.
  • He set up Micro Mobile Limited, a mobile technology solutions provider for micro credit and other financial access requirements.
  • He is the currently CEO of Zenka Finance
  •  Chairperson and founding member of Digital Lenders Association of Kenya.


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