REPORT | Majority of Kenyans Borrowed Digitally to Finance Education in H1 2024, Says Tala Survey

According to a survey by digital lender, Tala, education led the borrowing needs for most Kenyans alongside re-stocking existing business and day-to-day living needs.

The survey, dubbed H1 2024 customer barometer survey, took responses from 2,637 correspondents across Tala’s key markets in:

• Kenya
• Mexico
• The Philippines and
• India

between May to June 2024.

Speaking to Kenyan media, Tala said Kenyans’ borrowing habits remained largely the same as the last half of 2023 with only 20 percent reporting to have borrowed more in 2024, with the average borrowed amount being between KES 10,000 ($77.34) and 20,000 ($154.68).

• 51% of respondents borrowed from digital credit providers to bridge income gaps
• 31% started side hustles
• 20% started their own businesses
• Medical needs consumed 20% of the money borrowed while
• 19% went into emergencies

7% borrowed from banks to cover their cash shortfalls.

On inflation, which fell to 4.3% year-on-year in July 2024 from 4.6% in June 2024, Kenyans are less pained by it compared to a similar period one year ago. Inflation has reportedly dropped by 20% from November 2023 to May 2024.

“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.

56% of Kenyans said they were forced to cut back on expenses to cope with the high cost of living. However, Kenyans are reportedly not as dissatisfied with the situation, and there is improved financial well-being compared to 2023.

Tala also said 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.

“Looking at consumer credit trends defining the first half of this year [2024], 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 Kenya General Manager, Annstella Mumbi, said.

‘We not only enable our customers to survive this period but also empower more people to unleash their economic power.”

In 2021, as reported by BitKE, global payments giant, Visa, partnered with Tala with a particular focus in Kenya, to bring the USDC stablecoin to the underbanked population. The partnership included USDC operator, Circle, and the Stellar Development Foundation, to provide USDC via the Tala digital wallet.

As of February 2023, there were only 22 licensed digital credit providers in Kenya as per the Central Bank of Kenya (CBK) announcement.