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

Author

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  • Ndwiga, Steve Mbogo

    (Daystar University)

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

Suggested Citation

  • Ndwiga, Steve Mbogo, 2026. "Digital Lending and Financial Performance of Small Retail Businesses in Nairobi Central Business District, Kenya," African Journal of Commercial Studies, African Journal of Commercial Studies, vol. 7(3).
    • Handle: RePEc:cwk:ajocsk:2026-72
    DOI: 10.59413/ajocs/v7.i3.1
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    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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