Report: Many Kenyans Depend on Digital Loans

[Photo: Bizna Kenya]

A report by Mobile lending app Tala shows that the rising cost of living is driving more Kenyans to take short-term loans on digital platforms.

According to the report, most Kenyans borrow to cater for their business expenses at 43 percent, and adding stock at 35 percent.

School fees, utilities, and medical expenses follow at 20 percent, 19 percent and 6 percent respectively.

“This report’s main objective was to help us understand our customers, their needs, how their preferences are changing and how we can evolve to meet their needs. This is to help break the cycle of over-indebtedness and bring more underbanked Kenyans into the financially healthy circle,” said Teddy Kahiro, Tala User Research Manager.

Tala notes that many businesses are still recovering from the effects of COVID-19, coupled with the rising expenses as prices of basic commodities and fuel remain elevated.

The digital lender further noted that it seeks to empower its customers with solid education on finances.

“We believe financial resilience among the underserved and underbanked Kenyan majority can be enormously boosted by helping them understand how money works in everyday life. Financial literacy education will give young people the foundations of future success and can help economically disenfranchised Kenyans out of deprivation,” said Tala Country Growth Manager Annstella Mumbi.

82 percent of Tala borrowers have full-time time jobs, with many getting 68 percent of their income from employment, as 26 percent get their income from their own business sources.

The survey was done on 417 Tala respondents covering the October 2021 to March 2022 period.

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