Bridging the gender credit gap in low-income countries: The impact of digital financial inclusion

Drawing on multiple waves of Kenya's FinAccess surveys, this study reveals a growing gender gap in demand for and access to credit from digital channels in Kenya. Women are less likely to apply for digital loans, and those who apply face disproportionately lower approval rates. In contrast, there is no significant gender gap in either demand or access to traditional bank loans. These findings are robust across various contexts (rural vs. urban households, rich vs. poor counties). We conclude that digital finance does not bridge the gender credit gap in Kenya; instead, it is widening it. The barriers may include algorithmic credit screening models that inadvertently perpetuate societal bias against women. Consequently, emphasis should be placed on inclusive policies that enhance access to digital devices and mandate audits of lending algorithms to identify and address embedded gender biases. • Women are less likely to adopt or frequently use digital financial services. • More women than men self-exclude from digital credit markets. • Women access mobile phone-based digital loans at lower rates. • Digital finance may be widening rather than bridging the gender credit gap.