The Numbers
MyCredit Limited, a Kenyan digital lender and non-deposit-taking microfinance institution, raised $3 million in senior debt from Netherlands-based Triodos Investment Management in January 2026. The transaction, advised by Noblestride Capital, brings MyCredit’s total debt capital raised to approximately $13.6 million as the company celebrates its 10th anniversary.
Founded in 2016 by CEO Wangaruro Mbira, MyCredit provides credit to micro, small, and medium-sized enterprises (MSMEs), private schools, salaried individuals, and entrepreneurs across Kenya. The company operates 21 branches across 38 counties and targets expansion to 43 counties by end of 2026.
Over its decade of operations, MyCredit has disbursed 11,014 loans totaling KES 7.9 billion (approximately $61 million USD) to more than 10,000 customers. The company’s flagship education product, “Kuza Elimu Loan,” offers private schools secured loans of KES 1-5 million ($7,700-$38,500) for up to 36 months, or unsecured loans up to KES 1 million for 12 months.
Previous debt raises:
- December 2023: $3 million from Swiss impact investor BlueOrchard Finance
- February 2023: $2.6 million from Dutch social investor Oikocredit International
- Pre-2023: Approximately $4.8 million from undisclosed sources
- January 2026: $3 million from Triodos Investment Management
MyCredit did not disclose revenue, profitability, loan portfolio quality, non-performing loan ratios, or any financial metrics in the announcement.
Comparison
Kenya’s digital lending landscape has experienced a brutal consolidation since 2019. The sector exploded 2015-2019 with over 200 digital credit providers (DCPs) entering the market, then imploded 2020-2024 as regulations tightened, defaults soared, and business models broke.
The Carnage:
- Tala Kenya: Raised $350M+ globally, shut down Kenya operations entirely in 2024 citing regulatory pressures and deteriorating portfolio quality
- Branch International: Raised $300M+ globally, exited Kenya in 2024 after years of losses and customer complaints
- Zenka (formerly ZenkaFinance): Shut down 2023 after regulatory crackdown
- Berry (formerly EazzyStar): Shut down 2023
- Opesa: Suspended operations 2022
- Saida: Suspended operations 2023
Survivors include M-Shwari (Safaricom/NCBA joint venture with 30M+ users but minimal profitability), KCB M-Pesa (bank-backed, cross-subsidized), and approximately 30-50 smaller DCPs operating profitably or burning cash slowly.
Regulatory Evolution:
- 2016: Digital lending boom begins, minimal regulation
- 2019: Public outcry over predatory lending, aggressive debt collection, credit blacklisting
- 2020: COVID defaults spike, NPLs hit 30-50% across sector
- 2021: Parliament debates interest rate caps, consumer protection laws
- 2022: New regulations require DCPs to register with Central Bank of Kenya, minimum capital requirements, data sharing restrictions
- 2023-2024: Mass consolidation as undercapitalized lenders exit
- 2025: Stricter licensing requirements, enhanced consumer protection, mandatory credit bureau reporting
Market Context: Kenya has 3.32 million DCP accounts as of September 2025 (up from 600,000 in 2023), with KES 13 billion ($100M) in digital loans disbursed monthly. However, FinScope data shows 12 million Kenyan adults are over-indebted, with 37% of formal credit borrowers facing repayment issues, and 43% of adults using credit to buy food.
Private School Lending Niche: Kenya has approximately 15,000 private schools serving 2-3 million students. Many face chronic cash flow challenges: school fees paid termly/annually but expenses (salaries, rent, utilities) are monthly, creating 2-4 month cash flow gaps. Traditional banks view schools as risky (no collateral beyond buildings, dependent on parent payments, subject to enrollment volatility).
Competitors in education lending:
- Commercial banks: Require extensive collateral, 3+ years financial statements, charge 14-18% annually
- SACCOs: Limited capital, slower approval, 12-16% annually
- Informal lenders: Charge 5-10% monthly (60-120% annually)
- MyCredit positioning: 2-4% monthly (24-48% annually estimated based on Kenya MFI norms), faster approval, flexible terms
Business Model Reality
MyCredit operates a debt-funded lending model: borrow from international impact investors at 8-12% annually, lend to Kenyan borrowers at 24-48% annually, earn spread of 15-35%. This only works if:
- Default rates stay under 10%
- Operating costs stay under 15% of loan book
- Cost of capital stays under 12%
- Growth is steady enough to refinance maturing debt
The Math: With $13.6M raised and KES 7.9B ($61M) disbursed over 10 years, MyCredit’s loan book turnover suggests:
- Average loan outstanding: $6-8M at any time
- Annual disbursements: ~$8-10M
- Interest income at 30% average rate: $2.4-3M annually
- Cost of capital at 10%: $1.4M annually
- Gross margin: $1-1.6M before operating expenses
With 21 branches and 50-100 estimated employees:
- Staff costs: $400-600K annually (Kenya MFI wages)
- Branch operations: $200-300K annually
- Loan loss provisions (if conservative): $600-800K annually (8-10% of disbursements)
- Other expenses: $150-250K annually
- Total operating costs: $1.35-1.95M annually
Result: MyCredit likely operates at breakeven to modest profitability ($50-250K annually), or slightly negative in years with elevated defaults.
Senior Debt Structure: Senior debt means Triodos gets paid first if MyCredit faces financial distress, before Oikocredit, BlueOrchard, or any other creditors. This creates a capital stack where:
- Triodos: $3M at ~10-12%, senior position
- BlueOrchard: $3M at ~10-12%, subordinate to Triodos
- Oikocredit: $2.6M at ~10-12%, subordinate to both
- Others: $4.8M at various rates, likely subordinate
If MyCredit’s loan book deteriorates (NPLs spike to 15-20%), the company must keep servicing $1.3-1.5M in annual debt payments even while not collecting from borrowers. This creates liquidity crunch, forces asset sales or equity injection, or leads to default.
The Private School Bet: Lending $1-5M to schools is capital-intensive. If MyCredit targets 100 schools at $2M average = $200M loan book needed to scale meaningfully. With only $13.6M borrowed capital, MyCredit can maintain a $15-20M loan book maximum (typical leverage ratio 1-1.5x for MFIs). This means:
- Current school portfolio: $5-8M estimated
- Maximum school portfolio with current capital: $10-15M
- Number of schools served: 500-1,000 at most
The question: Is 500-1,000 schools enough to be profitable at scale? Banks serve thousands of schools profitably, but have deposit funding (cheaper capital) and cross-sell other products. MyCredit has expensive debt capital and limited product range.
Risk
1. Kenya’s Over-Indebtedness Crisis: With 12 million Kenyan adults over-indebted and 43% using credit for food, the macro environment is deteriorating. Private schools depend on parents paying fees, and those parents are increasingly financially stressed. If parent payment rates to schools drop from 85-90% to 75-80% (likely in economic downturn), schools cannot repay MyCredit. This creates cascade: parents default → schools default → MyCredit defaults.
2024-2025 saw school enrollment decline 3-5% as parents moved children to public schools to save money. If this trend accelerates, private schools face existential pressure. MyCredit’s bet on private school lending happens exactly when the sector faces its greatest stress in decades.
2. The Debt-on-Debt Trap: MyCredit borrows $13.6M to lend $20-25M (with leverage), meaning every dollar of bad debt costs them a dollar plus the interest owed to lenders. If NPLs hit 15%, MyCredit loses $3-3.75M on a $25M book, but still owes $1.3-1.5M in annual interest to Triodos/BlueOrchard/Oikocredit. After 2-3 bad years, the company is insolvent.
MFIs globally face this problem: profitable in good times, death spiral in bad times. Kenya’s economy in 2026 (KES at 130-135 per USD, inflation 5-7%, unemployment 12%+) is not “good times.” Raising more debt in a deteriorating environment increases risk rather than growth.
3. Regulatory Tightening Risk: Kenya’s financial regulators are cracking down on predatory lending. New regulations could:
- Cap interest rates at 15-20% annually (MyCredit likely charges 25-40%)
- Require higher minimum capital ($5-10M equity, not debt)
- Mandate maximum debt-to-equity ratios (MyCredit is 100% debt-funded with zero equity disclosure)
- Enhance consumer protection (restrict collection practices, require clear disclosures)
- Impose stricter licensing for MFIs expanding across counties
If MyCredit must cut rates from 30% to 15% to comply with new regulations, revenue halves while debt service stays constant. Result: immediate insolvency.
4. “No Disclosed Financials” Red Flag: The fact that MyCredit raised $3M without disclosing revenue, profitability, NPL ratio, or portfolio quality is concerning. Impact investors (Triodos, BlueOrchard, Oikocredit) have access to this data during due diligence, but public announcement reveals nothing.
This suggests either: (a) Financials are weak and MyCredit doesn’t want scrutiny, or (b) Company culture is opaque and doesn’t prioritize transparency. Neither inspires confidence. Comparable lenders (ECLOF Kenya, Juhudi Kilimo, Musoni) regularly disclose portfolio quality, NPLs, and growth metrics.
5. The 10-Year Growth Problem: MyCredit has operated for 10 years, raised $13.6M, and serves 10,000 customers across 38 counties. For comparison:
- Tala reached 5 million Kenyan users in 5 years before exiting
- Branch reached 4 million users in 6 years before exiting
- M-Shwari reached 30 million users in 8 years
MyCredit’s 10,000 customers after 10 years signals either: (a) Extremely selective lending (good for quality, bad for scale), (b) High customer churn (borrowers leave after 1-2 loans), or (c) Limited product-market fit beyond niche segments.
If MyCredit cannot reach 50,000+ customers after a decade with $13.6M capital, scaling to 100,000+ customers (needed for real profitability at MFI scale) seems unlikely. The company may be permanently subscale: too small to be efficient, too specialized to grow fast, too debt-heavy to weather downturns.
6. Senior Debt Seniority Creates Exit Problems: By taking senior debt from Triodos, MyCredit makes future equity investment harder. Equity investors know they’re subordinate to $13.6M in debt, meaning:
- Exit proceeds go to debt holders first
- Equity only gets paid after debt fully repaid
- In distress scenario, equity gets zero
This structure works if MyCredit becomes sustainably profitable and can refinance debt or repay from cash flow. If company needs equity injection to survive downturn, finding investors is nearly impossible. Debt-heavy capital structures without equity cushion are fragile.
Prediction
By July 2026 (6 months): If MyCredit announces new metrics (loan book size, NPL ratio, number of schools served, revenue growth), suggests confidence in business. If stays silent, probably managing portfolio stress. Track Kenyan media for school closures in Q2-Q3 2026 (post-school-fees collection period). If wave of private school closures, MyCredit’s portfolio deteriorates.
By January 2027 (12 months): Success = expanded to 43 counties as stated, school portfolio grew 30%+, NPLs under 8%, announced new debt facility ($5M+) or first equity raise. Partial = reached 40-41 counties, school portfolio grew 10-20%, NPLs 8-12%, renewed existing debt facilities. Failure = unable to expand beyond 38 counties, school portfolio flat/declining, NPLs 15%+, restructuring debt with lenders, layoffs/branch closures.
By January 2028 (24 months): Success = 50,000+ total customers, loan book $30-40M, NPLs under 10%, profitable (disclosed), total funding $20-25M including first equity round. Partial = 20,000-30,000 customers, loan book $20-25M, NPLs 10-15%, breakeven, extended debt maturities. Failure = <15,000 customers, loan book contracting, NPLs 20%+, in negotiations with lenders to avoid default, considering asset sale or merger.
By January 2029 (3 years): Success = 100,000+ customers, $50M+ loan book, <8% NPLs, profitable and sustainable, raised Series A equity ($5-10M) to reduce leverage, recognized as leading education MFI. Partial = 40,000-60,000 customers, $30-40M book, 10-15% NPLs, modest profit, still heavily debt-financed. Failure = sold to bank or larger MFI, wound down operations, or defaulted on debt obligations.
Critical Determinants:
- NPL ratio: Must stay under 10%. Above 15% = crisis. Kenya MFI sector average is 8-12% in stable times, 15-25% in downturns.
- Private school sector health: If enrollment continues declining and school closures accelerate, MyCredit’s core thesis breaks.
- Regulatory environment: Interest rate caps or stricter capital requirements could kill the business model overnight.
- Refinancing ability: With $13.6M borrowed at ~10%, MyCredit must repay/refinance $4-5M every 2-3 years. If lenders lose confidence, refinancing fails, and company faces liquidity crisis.
- Management capability: 10 years without achieving scale suggests either very conservative management (good for survival, bad for returns) or execution challenges.
Honest Assessment:
MyCredit is a survivor, not a star. In a sector where Tala ($350M raised) and Branch ($300M raised) both exited Kenya, MyCredit’s 10-year persistence with just $13.6M is genuinely impressive. The company clearly understands sustainable lending in Kenya’s difficult environment.
But survival isn’t success. MyCredit serves 10,000 customers after a decade—Tala served 5,000,000. The company raises debt at 10% to lend at 30%, earning a 20-point spread. After operating costs and loan losses, profit margin is likely 2-5% of loan book. On a $20M book, that’s $400K-$1M annual profit. Decent, but not transformative.
The pivot to private school lending is smart niche selection: underserved market, predictable cash flows (school fees termly), ability to monitor borrowers (schools aren’t going anywhere), social impact aligns with impact investor mandates. But it’s capital-intensive and hard to scale. Serving 500 schools profitably is possible. Serving 5,000 schools requires $100M+ in capital, far beyond MyCredit’s reach.
The $3M raise from Triodos extends runway and allows modest growth, but doesn’t fundamentally change trajectory. MyCredit will likely continue as a small, profitable (or breakeven), highly specialized Kenyan MFI serving schools and MSMEs. Not a unicorn, not a disaster, just a steady, subscale financial services provider in one of Africa’s most competitive credit markets.
The real risk: Kenya’s macro deterioration in 2026-2028. If parent purchasing power collapses, school enrollments plummet, and NPLs spike to 20%+, MyCredit’s thin profit margins evaporate, and debt service obligations become impossible to meet. The company would face restructuring, asset sales, or default.
The real opportunity: If Kenya stabilizes and the over-indebtedness crisis moderates, MyCredit’s conservative approach and specialized niche could generate steady 15-20% ROE indefinitely. Impact investors would be satisfied, schools would get needed capital, and the company could quietly build a $50-100M loan book over the next decade.
Bet on survival, not explosion. MyCredit will exist in 5 years. Whether it thrives depends entirely on Kenya’s economic trajectory, not the company’s execution.
