Survey shows 52pc of Kenyans survive on debt

Borrowing as a way of life is a trend that is fast manifesting in Kenya, with over 50 per cent of the population now relying on debt to meet their daily financial obligations, new research has revealed.

The study conducted by Consumer Insight notes that the number of Kenyan borrow mainly from digital lenders, has risen to 52 per cent in 2023 from 40 per cent in 2019.

“This trend of economic worry is manifested in family members actively working and earning incomes (up 10 per cent from 2018) and on reliance on debt, leading to borrowing as a way of life,” says the report dubbedWakenya.

The study which surveyed over 3,000 Kenyans across 16 counties in four waves between 2016 and 2023 also shows that millions of Kenyansare changing their values by migrating to new mindsets and ways of living, with the social migration behaviour having a profound effecton leadership and lifestyles to employment, education andentertainment.

The survey notes that 59 per cent of Kenyans borrow using their mobile phones, a sharp increase from 33 per cent recorded in2016.

Changes in sourcing loan

Sources of loans have also changed for consumers, with bank branches being replaced by digital lenders.

An earlier government survey highlighted that over 80 per cent of Kenya’s adultpopulation utilises mobile money providers in what is a surge in digital financial services, attributed to the growth of digital lendersand loans after the introduction of M-Shwari in 2012.

M-Shwari allows M-PESA customers to save and access loans. Prior to this move, Kenyans primarily relied on family, friends, banks and the Saccos for loans.

According to the research, at least six trends are reshaping Kenya, including digitisation ofwork, home and school, health awareness, shifts in culture, a newmedia landscape and acceptance of illegal drugs, especially cannabis.

Along with finance, the Wakenya research found that the digitisation trend has affected the insurance and media sectors, the latter of whichhas been hit hard.

In the insurance sector, digitisation is transforming business modelsthrough Artificial Intelligence and cloud computing which has improved underwriting, risk assessment and claims.

The media landscape has been taken over by digitisation which is revolutionizing traditional media, which has led to the rise of new digital channels and adecline in old business and delivery models.

The rapid advancements in technology have enabled new players to enter the market with disruptive business models that attract audiences quickly, with existing players relying on partnerships, acquisitions and new service offerings to secure their positions in the ever-changing media landscape.

It has also opened new avenues to produce, distribute and monetise content.

The study further reveals that many Kenyans access news, movies and music throughthe internet, a growth that has coincided with thefall of legacy formats like radio and newspapers which are currently facing reduced audience numbers. Out of those polled, only 6 per cent said they read newspapers

E-shopping embraced

“Withthe leading internet destination being social media, the competition for Kenyans attention by major social networks is high. TikTok subscriptions have risen fastest to 49 per cent at par with YouTube, which suggests the short-video format is a trend to watch,”the survey notes.

Established platforms like YouTube and Instagram have already imitated the upstart TikTok. The study also indicates that Kenyans have embraced e-shopping and e-learning, with one out of three Kenyans having now shopped online through Facebook and Instagram as opposed to impersonal storefront websites, platforms that allow businesses to sell their products without a personalised touch. 

E-learningtrends are also growing, in tandem with internet growth, with 27 of those polled saying they acquired an online education

According to the research, a rise in recreational drug usage especially cannabis and miraa is a trend that is on the rise, with the study revealing that  9 per cent usethese drugs incontrast to the falling use of cigarettes.