– About 51% of the adult population is struggling to repay loans with women, farmers and retirees being among hardest hit
– Highest levels of default were for shopkeeper goods on credit (45% of borrowers), followed by mobile banking loans (18% of borrowers)
– According to the study, almost a fifth of people interviewed view betting as a good way of getting income and most of them get capital from digital lenders
A recent financial study has revealed that two out of every three Kenyans are struggling to repay loans with some others being pushed to extreme extents
of selling assets and or cutting their spending on food in order to offset loans. According to the report published by Financial Sector Deepening (FSD) on
Wednesday, July 24, the debts in question have been acquired from various providers, for instance, banks, shylocks and digital lenders among others.
According to the report published by Financial Sector Deepening (FSD) on Wednesday, July 24, the debts in question have been acquired from various
providers, for instance, banks, shylocks and digital lenders among others.
The study singled out women and the poor as those badly hit by the debt menace that has so far resulted in to increased levels of stress among the populace.
“Levels of debt stress are high across the board but particularly for farmers, the elderly and the poor. For these groups, difficulties in repaying loans resulted
in asset sales, cutting back on expenditure, or borrowing to repay existing loans,” the report read in part.
For people considered to be wealthy, the report said, were overburdened with debts and a section of them used over half of their monthly income to service loans.
The debt problem also affected the employed population with at least 40% of them being over leveraged.
“Compared to the poor, wealthier groups may be over-leveraged, with a third of wealthy borrowers having debt service payments of over half their monthly
expenditure. For the employed this is as high as 40%.,” the report continued.
Respondents who were questioned during the study suggested that getting help from families could help reduce the debt burden. Others suggested that getting extra
paid jobs was going to help arrest pain caused by the existing loans.
“Assistance from family and friends and finding more work were main solutions for meeting daily needs, dealing with shocks and investing,” the report said.
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