Jimmy Ebong

SMC University, Switzerland

ebongjimmie@yahoo.co.uk

ORCID 0000-0001-8493-6700

Demand for credit in high-density markets in Kampala: Application of digital lending and implication for product innovation

George Babu

School of Business, Christian Brothers University,

USA

bgeorge@cbu.edu

ORCID 0000-0002-2791-828X

Abstract. This study sought to ascertain the factors that drive the demand for credit among businesses in the high-density markets in Kampala (Uganda) and its suburbs and draw implications for innovations and application of digital lending. A combination of qualitative and quantitative approaches was applied to profile end retailers and businesses in the high-density markets located in Kampala and its suburbs and to assess the demand for credit at these markets. The market for credit in the high-density market in Kampala and its suburbs can sufficiently support innovation and application of digital lending. Most business owners enthusiastically intended to grow their businesses and are looking for affordable financing opportunities. Drivers of demand for credit arise from the need for inventory management, debtor management and to pay for operating expenses. Short business cycles mean high turnover, hence opportunities for uptake of credits in small amounts and shorter repayment periods. It is recommended for fintechs to improve product features as well as shorten their delivery channels, thereby enhancing convenience in accessing credit. Further studies should explore business models and partnerships for providing affordable credit.

Received: January, 2020

1st Revision: August, 2020

Accepted: December, 2020

DOI: 10.14254/2071-8330.2020/13-4/21

JEL Classification: O31, G41, O17

Keywords: digital credit, high-density markets, fintechs, accessible crediting, Uganda