Kenya’s Digital Credit Consumers Show Confidence

70 percent of digital credit consumers feel confident in their ability to repay their loans as the economy crunches according to the Half 1 2024 Customer Barometer data released by Tala.

Borrowing habits, among 2,637 surveyed correspondents, across key markets remained largely the same as the last half of 2023 with only 20 percent reporting to have borrowed more in the first half of this year, with the average borrowed amount being between $77.22 and $154.44.

On inflation, the survey revealed that customers still feel the pinch of inflation, but it is less acute in the last 6 months with a twenty percent (20 percent) drop from November 2023 to May 2024. Despite relief at a high level, 80 percent of Kenyans think food and groceries costs have increased in the last six months. 83 percent said that their overall living expenses have increased in the first half of this year.

To cope with the high cost of living in H1 2024, 56 percent of Kenyans cut back on expenses and reported that they are feeling the pinch a little less when it comes to cutting back, an indication of improved financial well-being compared to 2023. 51 percent of respondents borrowed from digital credit providers to bridge income gaps, 31 percent started side hustles, 20 percent started their own businesses and 7 percent borrowed from banks to cover their cash shortfalls.

“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” stated Annstella Mumbi, General Manager, Tala.

In half one of 2024, education/school fees and school supplies remained the top reason Kenyans borrowed. Other top reasons were; buying stock for an existing business, medical expenses, 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 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” concluded Mumbi.