Majority of Kenyans borrowing ‘overwhelmingly’ just to survive – survey – Nairobi News

A majority of Kenyans struggle to make ends meet, a new household survey shows.

Due to poverty, borrowing is fast rising among Kenyans. And despite the spread of formal financing, more than 60 per cent of the population still uses informal borrowing solutions such as chamas, friends and family.

The most desperate take goods on credit from their local shopkeepers, just to get to the end of the month.

The findings are part of a survey released by FinAccess, which measures the access, usage, quality and impact of financial services in Kenya.

“Debt is used overwhelmingly for consumption, while savings are used for a range of purposes. Shopkeeper goods on credit has risen from 10 per cent in 2016 to 30 per cent in 2019,” states the report.


Taking loans from groups or chamas, family, friends and neighbours as well as taking credit from mobile banking platforms contribute to the perception that Kenyans are heavy borrowers.

But these debts come with challenges, as over 50 per cent of debtors sell their assets, and borrow or cut back on their expenses to repay their loans.

A quarter of these individuals have been overleveraged, with debt servicing and repayments consuming over half of their monthly expenditure.

About 18 per cent have effectively defaulted and over two thirds of borrowers experienced at least two of these circumstances.

In the same breadth, uptake of mobile banking has considerably gone up from 6 per cent to 10 per cent in the same 2016-2019 period.

This is mainly deployed in bill payment as nearly half of internal remittances are now digital.

Saccos, microfinance institutions and traditional banking (not including mobile banking) on the other hand, are no longer highly regarded by a majority of Kenyans.


Use of mobile money, mobile banking and digital apps has risen considerably, with digital apps now being used by two million people. About 79 per cent of Kenyans have mobile money accounts, 25 per cent have mobile bank accounts, while 8 per cent take digital loans.

The survey also intimates that Kenyans are becoming a more saving people, which is paradoxical, based on their borrowing nature.

The mobile wallet, the survey states, is the most popular saving device.

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