Safaricom is the main custodian of customer data used for mobile lending, with access to over 30 million subscribers.
According to Moody’s, M-PESA poses a potential threat to banks if it chooses to become a large distributor of financial services.
“It is likely that Safaricom will continue to dominate the lucrative payments market through M-PESA, despite rising competition from banks and international players,” Moody’s said in a statement.
"Banks have piggybacked on a successful model, partnering with M-PESA to offer services, like loans and deposits, and improving their cost efficiency," said Christos Theofilou, VP-Senior Analyst at Moody's.
"M-PESA is a fintech disruptor and has dominated payments in Kenya since 2007. Mobile payments adoption has broadened financial inclusion and expanded the banking population, increasing banks' customer base and revenue pool, and strengthening demand for banking products."
Early innovation by domestic banks - and Kenya's regulatory caps on lending rates - create barriers for global players aspiring to break into Kenya's lending market.
Large banks already offer most of their loans through mobile platforms, using advanced analytics to assess credit risk.
As technology develops, the largest and most innovative banks stand to gain further, but must fight to retain a direct relationship with customers, noted Moody’s.