A growing number of Kenyan households are borrowing simply to survive, as persistent economic pressures push families to rely on credit to pay for food, transport, rent and other essentials, a new financial survey shows.

The latest Financial Wellness Monitor Report by Old Mutual, released on Wednesday, March 25, 2026, indicates that borrowing has shifted away from investment and asset building toward basic consumption, reflecting the widening gap between household incomes and the rising cost of living.

According to the study, everyday expenses are now the leading reason Kenyans take loans, underscoring the strain facing working families across income levels.

“Four in ten Kenyan (74 per cent) households took loans to cover daily expenses and make ends meet,” the report reads.

Tight budgets appear to be the norm rather than the exception, with many households operating with little or no financial cushion after paying monthly bills.

“Just 31 per cent reported having money left over after monthly expenses, it says.

Education costs remain another major financial pressure point. School fees and related expenses continue to drive borrowing, highlighting the burden families face in maintaining children’s education amid shrinking disposable incomes.

At the same time, the findings suggest that some households are caught in a cycle of debt, taking new loans to service old ones rather than to improve their financial position.

“12 per cent took loans to repay existing debt,” the survey notes.

Business and informal crisis

Credit is also being used to sustain small businesses, with respondents reporting borrowing to purchase stock or equipment. While this reflects ongoing entrepreneurial activity, it also points to limited access to affordable formal financing.

Beyond essentials and business needs, households are turning to loans for medical bills, home repairs, household goods and other unavoidable expenses, demonstrating how deeply borrowing has become embedded in daily life.

As formal borrowing options become strained, many Kenyans are increasingly relying on informal support systems such as family networks and community groups.

“43 per cent borrowed money from friends or family in the past 12 months,” the report observes.

Savings groups, commonly known as chamas, remain a crucial source of financial support, especially for households unable to access bank or mobile credit.

“25 per cent borrowed from chamas.”

However, these coping mechanisms are accompanied by declining financial resilience, as many households exhaust savings to meet urgent needs.

“40 per cent dipped into savings to cover expenses.”

Housing pressures are also intensifying, particularly for renters in urban areas where accommodation costs consume a large share of income.

“26 per cent fell behind on rent.”

Debt burdens persist

Despite efforts to manage spending and stabilise finances, debt levels remain elevated for many households, with little improvement compared to previous years.

Financial stress is widespread, affecting both economic well-being and quality of life.

“43 per cent reported high or overwhelming financial stress.”

In response, households are prioritising income security, cutting expenses and postponing major purchases. Many are switching to cheaper goods and services, relocating to more affordable housing and delaying investments or travel.

Despite the pressure, most Kenyans continue to plan for the future. Savings goals remain strong, particularly for education, business development and home ownership.

Optimism also persists, with many households expecting their financial situation to improve in the near term, driven largely by hopes of increased income or better business conditions.

Overall, the report paints a picture of a population under sustained economic strain, increasingly dependent on borrowing to meet basic needs while striving to maintain long-term financial stability.

The report warns that without stronger income growth or relief from high living costs, the findings suggest that credit will remain a crucial, though potentially risky, lifeline for millions of Kenyan households.