In Kenya, over one-third of the population is turning to borrowing due to rising living costs, shifting from traditional spending cuts. The Tala Money March report indicates that borrowing for daily expenses has increased significantly, while entrepreneurship is also rising. Despite financial stress affecting many, there is optimism about financial futures among Kenyans.
In Kenya, recent shifts in borrowing habits reveal how rising living costs are impacting consumers. Over one-third of Kenyans have increased their borrowing, as many can no longer rely solely on reducing spending on non-essential items during economic challenges. The Money March report by Tala indicates that traditional strategies for coping with high costs are declining, pushing more individuals to seek loans to manage their everyday expenses.
The inclination to borrow more has grown significantly, with the percentage of respondents borrowing rising from 27 percent last year to 46 percent this year. The report also reveals a notable rise in people starting new businesses, increasing from 34 percent to 51 percent, demonstrating their need to adapt to financial pressures. Teddy Kahiro, Tala’s research manager, suggests that this shift raises critical questions about the necessity of borrowing for many Kenyans in these trying times.
With business expenses, education, and daily living costs as the foremost reasons for borrowing, 80 percent of borrowers express confidence in their repayment abilities. The report highlights that many respondents allocate a significant portion of their income—11 to 20 percent—for investment opportunities, primarily focused on savings and cooperative societies. Despite this, concerns regarding loss and distrust in investment platforms hinder greater financial engagement.
Interestingly, business ownership has seen a 7 percent increase in 2025, while reliance on full-time employment has declined by 5 percent year-on-year. Amid these financial challenges, 90 percent of surveyed Kenyans reported struggles in the last six months, with 32 percent experiencing financial stress. Nevertheless, a resilient optimism persists, as approximately 46 percent of respondents remain hopeful about their financial futures.
The analysis underscores a significant trend in Kenya where increased borrowing has emerged as a necessity due to the high cost of living. The shift from traditional expense-cutting measures to reliance on loans and entrepreneurship reflects a changing economic landscape. Though challenges abound, there is a notable resilience among Kenyans, indicating a persistent hope for future financial stability.
Original Source: eastleighvoice.co.ke
