- Despite relief at a high level, 80 per cent of Kenyans think food and grocery costs have increased in the last six months
- 83% of respondents said that their overall living expenses have increased in the first half of this year.
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Seven out of 10 of digital credit consumers feel confident in their ability to repay their loans as the economy crunches.
A Customer Barometer by digital lender, Tala in the past six months attributes this to an ease in the overall cost of living.
Kenya's inflation fell to 4.3 per cent year-on-year in July from 4.6 per cent a month earlier.
Monthly, inflation was -0.2 per cent from 0.4 per cent in June.
The survey shows nine per cent are neutral while four per cent do not feel at all confident.
"Customers still feel the pinch of inflation, but it has been less acute in the last six months. Basic goods and services still represent a cost pain point for customers. Price increases feel overall less drastic, but remain most noticeable in food prices,'' the survey reads.
At least 46 per cent borrowed went towards education or school fees or supplies, 44 per cent to restocking or supplies for existing businesses while 26 per cent of the credit went to day-to-day living needs including food, clothing, transport and rent.
Medical consumed 20 per cent of the money borrowed while 19 per cent was for emergencies.
According to the report, borrowing habits remained largely the same as the last half of 2023 with only 20 per cent reporting to have borrowed more in the first half of this year, with the average borrowed amount being between Sh10, 000 and 20,000.
On inflation, the survey revealed that customers still feel the pinch of inflation, but it has been less acute in the last six months with a twenty percent (20 per cent) drop from November 2023 to May 2024.
Despite relief at a high level, 80 per cent of Kenyans think food and grocery costs have increased in the last six months.
Close to 83 per cent of respondents 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 per cent 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.
The survey shows that 51 per cent of respondents borrowed from digital credit providers to bridge income gaps, 31 per cent started side hustles, 20 per cent started their businesses, and seven per cent 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,” Tala GM Annstella Mumbi said.
Mumbi adds that today’s financial infrastructure doesn’t work for most of the world’s population, which is why industry players 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."