The increased advancements in technological integration within the financial sector has led to development of new credit platforms which improve access to borrowing among the youth. Further, with proliferation of digital lending platforms which provide unsecured loans has led to a debt chokehold among the youth. This has resulted in poor financial health among the youth. Hence it’s vital to understand how various digital credit platforms have contributed to financial health of borrowers and help in advancing policy and practical solutions. The general objective of the study was to analyze the effect of digital credit on the financial health of youth borrowers in Kibera, Nairobi County. The study specifically analysed the effects of mobile network operator facilitated digital credit, commercial bank-based digital credit and fintech based digital credit on the financial health of youth borrowers in Kibera, Nairobi County. The study employed a correlational research design. The population of interest was youth borrowers who live and work in Kibera, Nairobi County. The sampling frame was active users of digital credit who are between 18 and 35 years, residing in Kibera. The list was obtained from the Independent Electoral and Boundaries Commission’s voter register for Kibera Ward. A stratified sampling technique was used to select the respondents. The sample size was 399 respondents. Data was collected using structured questionnaires. SPSS was used to aid in the data analysis. A descriptive statistical technique of analysis was used and entailed the determination of the mean and frequency distribution of the datasets. Further inferential analysis was conducted using both correlation and regression analysis. The data was presented in tables and figures. The study results shows that mobile network operator facilitated digital credit, Bank-facilitated digital credit and fintech facilitated digital credit has a positive and significant effect on youth’s financial health in Kibera Ward. The study recommends that mobile money operators that provide digital loans reduce their operation rates considering they have high interest rates for the small loans they offer. The study also calls for the development of progressive peer to peer regulations that would improve the penetration of these loan devices. The study recommends improved client assessment to increase borrower’s ability to access funds without long-term history. The study recommends that the firms make attempts to guarantee interoperability between devices as this would significantly improve access for borrowers with older phones.
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