• April 18, 2024
  • Last Update April 18, 2024 6:55 PM
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Kenyans reluctant to take out loans even as the rising cost of living bites: Tala

Kenyans reluctant to take out loans even as the rising cost of living bites: Tala


Tuesday March 19, 2024

KNA by Stacie Ang’aya/Florence Munyoki

Tala has launched a report on the state of the credit digital place which portrays a decline in the number of people with full time jobs and a worsening of the financial situation compared to the previous year.

The report also showed that the majority of the lending was given to starting businesses as most people with full time jobs were looking for other sources of income.

Citing a customer survey from the report, Tala General Manager (GM) Ann Stella Mumbi noted that customers were struggling due to the rising cost of living that has forced most people to cut down on leisure and non-basic expenses.“

Most consumers focus on basic needs such as food, school fees, health care and rent while borrowing,” added Mumbi.

She pointed out that financial literacy has increased among consumers as most were learning to budget in order to manage their finances, start and grow a business and save effectively as expenses surpassed their income.

According to the GM, the report revealed that 72 percent of consumers claimed that their financial situations have not improved and that people were skipping meals so as to manage finances.

Also speaking at the event, Mr. Teddy Kahiro, the User Research Manager at Tala reiterated that the major reasons for people taking loans were business needs, school fees, medical expenses and rent.

“There has been an increase in the number of unemployed people and the high cost of living has impacted the ability to pay for basic needs,” said Kahiro.

He however maintained that the saving culture in Kenya was still there where 30 percent of consumers were saving but have nevertheless reduced their personal expenses.

Kahiro mentioned that the major factors consumers looked at when choosing a digital lender was their interest rate, repayment period and loan collection tactics.

Further, he disclosed that 57 percent of consumers used more than one digital lender thereby incurring a loan burden when repaying.

Making reference to the report, Kahiro said that Kenyans however remained hopeful of their financial conditions and hoped things will get better.

Courtesy; KNA

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