Global Credit Gap Leaves 3 Billion Adults Excluded from Formal Credit, New Report Says

Kenya, January 30, 2026 - A major new financial inclusion report highlights a striking paradox in the global economy: while millions of people now have bank or mobile money accounts, around 3 billion adults worldwide remain excluded from formal credit systems, limiting their ability to invest, build businesses or cushion financial shocks. 

The findings were revealed in The Three-Billion-Person Challenge, a report co-authored by the Atlantic Council’s GeoEconomics Center and digital lender Tala, launched at a Nairobi event that puts Kenya’s own credit dynamics into perspective. 

According to the report, despite substantial progress in financial access, many adults in low- and middle-income economies (LMIEs), including Kenya, continue to be “credit invisible” or effectively locked out of formal borrowing, even though they may hold accounts with banks or mobile money providers. 

Of the roughly 4.84 billion adults living in LMIEs, about 2.5 billion (51 per cent) have bank or mobile accounts but do not use formal credit, and only around 24 per cent actively borrow through regulated channels. 

In Kenya specifically, the phenomenon reflects a broader pattern where 84 percent of adults now have financial accounts but a much smaller portion use formal credit meaningfully, and an estimated 16 percent of adults are classified as financially unhealthy, unable to meet expenses, absorb shocks or plan for the future. 

Tala Kenya’s general manager Ann Stella Mumbi told the Nairobi launch that the problem is not just about access, but trust, affordability and fit of credit products to people’s real needs. 

The report identifies three major barriers that prevent widespread use of formal credit:

Affordability: Many potential borrowers struggle with high interest rates or fees that make formal loans unattractive, pushing them toward informal or predatory alternatives. 

Lack of Trust: Weak consumer protection, opaque lending terms and past experiences with aggressive debt collection practices have eroded confidence in formal lenders. 

Poor Product Fit: Many formal credit products do not align with the income and cash-flow realities of low-income households and small enterprises, leaving a mismatch between needs and offerings. 

In Kenya, local reporting shows that many borrowers end up “swinging from one digital lender to another,” often trapped in cycles of repayment due to poorly designed products that do not suit their income patterns or financial goals.

This dynamic contributes to financial stress and exclusion, especially for vulnerable groups.