Kenyans Remain Confident In Repaying Loans Despite High Cost Of Living In H1 Of 2024, Report

• Kenyans expressed confidence in repaying their loans despite the tough economic situations during the first six months of 2024
• According to a survey conducted by Tala Kenya, 70% of digital credit customers showed their ability to repay loans even as inflation bites
• Tala Kenya General Manager Annstellah Mumbi said that Kenyans mainly borrowed for school fees and school supplies

Kenyans have shown the ability to repay loans even in a tough economic environment.

A survey conducted by Tala Kenya showed that in the first six months of 2024, 70% of digital credit borrowers felt confident in their ability to repay their loans.

The First Half (H1) 2024 Customer Barometer data resulted from 2,637 correspondents surveyed across key Kenyan markets.

How much do Kenyans borrow and why?

In the last six months, 20% of digital loan customers borrowed more than in the same period in 2023.

The data indicated that the average borrowed amount ranged between KSh 10,000 and KSh 20,000.

According to Tala Kenya General Manager Annstellah Mumbi, the majority borrowed for school fees and school supplies.

Other top reasons they borrowed were to stock up their businesses, clear medical expenses and emergency expenses, starting a side hustle or a business.

“Today’s financial infrastructure does not work for most of the world’s population, that is why we remain committed to applying advanced technology and human creativity to solve what legacy institutions cannot or would not," said Mumbi.

Mumbi explained that the company not only enable its customers to survive tough periods but also empowers them to unleash their economic potential.

The survey found that 51% of respondents borrowed from digital credit providers to bridge income gaps, 31% started side hustles, 20% started their own businesses, and 7% borrowed from banks to cover their cash shortfalls.

How inflation hit Kenyans

The survey revealed that customers still feel the pinch of inflation, but it has been less acute in the last six months, with a 20% drop from November 2023 to May 2024.

About 80% of Kenyans felt that food and grocery costs have increased in the last six months, and 83% said that their overall living expenses have increased in the first half of this year.

“Looking at consumer credit trends defining the first half of this year, matters of economic equity come into sharp focus as quick access to funds can mean the difference between financial stability and hardship for many households,” she said.

Women are better at repaying loans

Another report by Financial Sector Deepening (FSD) Kenya showed that digital loans dominate the country's credit market.

The majority of the borrowers are men, however, females repay promptly compared to their male counterparts.

Speaking exclusively to TUKO.co.ke, Mumbi noted that lenders need to support women in ways that are natural to them.

Proofreading by Asher Omondi, current affairs journalist and copy editor at TUKO.co.ke.

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