According to the Financial Services Monitor report released on February 12, 2025, Kenyan businesses are increasingly relying on personal loans and informal borrowing to finance their operations.
The report indicates that nearly 70% of Kenyan consumers have some form of personal loan, a higher percentage than in other surveyed African markets such as Ghana, Namibia, and South Africa.
This trend reflects the financial duress many Kenyans face, with only 10% reporting higher earnings now compared to the pre-pandemic period.
Consequently, business owners are turning to personal loans, borrowing from family and friends, and utilizing savings to sustain their enterprises.
The report also highlights that 41% of Kenyans have borrowed money from family or friends in the past year, and at least 25% have taken loans from Chamas (informal savings groups).
This reliance on personal and informal financing underscores the challenges businesses encounter in accessing formal credit facilities.