Improved access to smartphones and exposure to mobile-based financial services is driving more women to take digital loans for the first time, a new report shows.

A review by digital credit provider Tala indicates that 26 percent of its borrowers reported first-time access to a digital loan, with women forming the majority.

The findings point to fading gender barriers in accessing financial services, especially digital credit.

“Access barriers are gradually lowering, which means that there is improved phone access, mobile literacy and exposure to digital finance,” Tala said in response to questions from this publication.

The report notes that many women borrowers preferred to wait until digital credit products built a reputation for safety and reliability before trusting them fully.

The growing involvement of women in small businesses and side hustles is also fuelling the demand for quick and flexible credit.

According to Tala, the top reasons women borrow digital loans include meeting household expenses such as food and rent, paying school fees and buying supplies, supporting small business operations, and covering medical bills.

The findings align with the 2024 FinAccess household survey by the Central Bank of Kenya, which shows gender-based disparities in access to financial services are narrowing.

The gap in exclusion rates from formal financial services between men and women fell to 0.2 percentage points in 2024, from 1.6 percentage points in 2021.

“Digital credit is expanding financial system participation for a segment historically underserved by traditional credit,” Tala said. “It's also giving women a financial confidence boost. 80 percent of women in the survey said they feel more confident making financial decisions.”