Digital Lending and Financial Performance of Small Retail Businesses in Nairobi Central Business District, Kenya

Steve Mbogo Ndwiga
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Steve Mbogo Ndwiga: Daystar University

African Journal of Commercial Studies, 2026, vol. 7, issue 3

Abstract: Digital lending has become a central feature of modern financial systems, driven by fintech innovation, mobile technology, and expanded digital access. In Kenya, the rapid growth of digital lending platforms has created alternative financing channels for small retail businesses, particularly in Nairobi Central Business District (CBD), where access to traditional bank credit remains constrained. This study examined the relationship between digital lending and the financial performance of small retail businesses in Nairobi CBD, focusing on loan accessibility, loan usage intensity, and the cost of digital credit. A positivist research paradigm and descriptive research design were adopted. From a target population of approximately 3,500 businesses, a simple random sample of 400 was selected, yielding 360 valid responses collected through structured questionnaires. Data were analyzed using descriptive statistics, correlation, and multiple regression analysis. Results showed that digital loan accessibility had a moderate to strong positive relationship with financial performance (r = 0.56, p

Keywords: Digital Lending; Loan Cost; Loan Accessibility; Loan Usage Intensity; Financial Performance (search for similar items in EconPapers)
JEL-codes: G21 M13 O16 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:cwk:ajocsk:2026-72

DOI: 10.59413/ajocs/v7.i3.1

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