Despite facing economic pressures from rising inflation, Kenya’s digital credit users are showing strong confidence in their ability to manage debt and maintain financial stability. A recent survey by Tala, a leading digital lender in the country, reveals that 80% of Kenyans feel positive about handling their debts even as they navigate the higher costs of living.
The survey found that 83% of Kenyans have experienced an increase in their overall expenses in the first half of 2024, with 80% reporting that the cost of basic necessities, like food and groceries, has risen sharply. In response to these growing financial pressures, many Kenyans are turning to digital credit solutions to help manage their day-to-day expenses and unexpected financial needs.
Notably, the survey highlights a strategic use of borrowing among Kenyans. Around 46% of respondents reported borrowing to pay school fees, ensuring that education remains a priority despite the tough economic conditions. Additionally, 44% of participants borrowed to restock their businesses, showcasing a commitment to sustaining entrepreneurial ventures during challenging times. Other common reasons for borrowing included meeting daily living expenses (26%), covering medical bills (20%), and handling emergencies (19%).
Borrowing amounts varied, with 24% of Kenyans taking out loans between Ksh 10,000 and Ksh 20,000, and a smaller portion, 11%, borrowing more than Ksh 50,000. These figures suggest that while many are cautious about the amounts they borrow, they are still willing to leverage digital credit to maintain their economic well-being.
Annstella Mumbi, General Manager of Tala stated,
“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”
Despite the financial challenges posed by inflation, the survey underscores a resilient and optimistic attitude among Kenya’s digital credit users. This confidence is seen as a critical factor in helping them weather the ongoing economic storm, with many adopting innovative strategies such as starting side hustles (31%) or launching new businesses (20%) to secure additional income.
“Today’s financial infrastructure doesn’t 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 can’t or won’t. We not only enable our customers to survive this period but also empower more people to unleash their economic power” added Mumbi.
As inflation continues to impact daily life, Tala’s survey suggests that Kenya’s digital credit consumers are not just coping but are also finding ways to thrive, showing a commendable level of financial adaptability and foresight.