Kenyans top in gobbling up loans as nearly 90pc lack confidence in having sufficient retirement savings

A study has unveiled significant prevalence of debt in Kenya, with nearly 70 per cent of consumers having some form of personal loan.

Where almost 7 in 10 consumers have a personal loan, this surpasses other surveyed markets across Africa, including Ghana, Namibia, and South Africa.

Against the backdrop of high national indebtedness, data from the Treasury indicate that Kenya’s debt stock reached Sh10 trillion, an also indebted citizen paint a picture of a country teetering on the edge.

The report, conducted by the Old Mutual Financial Services Monitor (OMFSM), also reveals that Kenyans’ top financial priorities include income security, expense reduction, and debt repayment.

Financial stress

Alarmingly, close to half of Kenyan consumers are experiencing considerable financial stress, with only one in ten reporting higher incomes compared to pre-pandemic levels.

Interestingly, the study also highlights the entrepreneurial spirit prevalent in Kenya, with over 50 percent of Kenyans owning micro-businesses, and 22 per cent engaging in “polyjobbing,” supplementing their regular income with additional sources.

Regarding retirement planning, only 26 per cent of respondents are actively saving for retirement, the lowest among the surveyed markets.

Moreover, nearly 90 per cent lack confidence in having sufficient retirement savings, instead relying on their children for support in old age, with minimal expectations of government assistance.

Overall, amid a challenging economic environment, Kenyan economic confidence stands at 16 per cent, trailing behind South Africa (27%), Namibia (24%), and on par with Ghana (17%).

According to Arthur Oginga, the Group CEO of Old Mutual East Africa, the OMFSM seeks to provide valuable insights into the broader financial behavior of Kenyans, enabling the community to make informed decisions and enhance financial well-being.

“At Old Mutual, we believe that knowledge is the cornerstone of financial empowerment. The Old Mutual Financial Services Monitor will serve as a reliable annual indicator of Kenyan financial behavior, enabling us to create customized financial wellness journeys for our customers as their needs evolve,” said Oginga.

“After analyzing the consumer financial attitudes and behaviors of Kenyans, the necessity for comprehensive financial wellness support is evident, covering day-to-day expenses, debt and income management, and long-term savings,” he added.