Financial stability remains a pressing concern for many Kenyans, as revealed by data from Tala.
Data from Tala sheds light on the evolving financial behaviors and challenges faced by individuals in the country.
Despite a relatively eased inflation rate of 6.3%, a significant portion of the population continues to grapple with financial uncertainties.
According to Tala, one of the digital credit providers in Kenya, 75% of Kenyans are optimistic about an improvement in their financial situation over the next six months.
Kenyans Realising Saving Culture
This optimism is partly attributed to the changing dynamics in the financial market, where the influence of the US dollar on the Kenyan currency is gradually diminishing as the demand and supply of goods and services shape the economy.
The State of Digital Credit Market Place Report, unveiled by Tala, indicates a shift in the saving culture among Kenyans.
The report shows that Kenyans are utilising 25% of their earnings on savings.
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Unlike previous years when expenditure on travel and entertainment took precedence, more individuals are now recognizing the importance of saving for the future.
However, the report also points out a concerning rise in the unemployment rate, forcing businesses to downsize to survive in the current economy.
One notable trend identified in the report is the growing emphasis on financial literacy among Kenyans in the formal sector.
A significant number of individuals with full-time jobs are engaging in side hustles to supplement their income, with only 26% reporting an increase in earnings post the COVID-19 pandemic.
This indicates a widespread concern among Kenyans regarding the sustainability of their livelihoods in the face of economic challenges.
Annestella Mumbi, the Managing Director of Tala, says the prevalence of side hustles among employed Kenyans as a reflection of the economic strain faced by many.
“Most of Kenyans who are employed have a side hustle and this tells you that sustaining lives in the current economy has become a concern,” says Mumbi.
The report also reveals a growing apprehension among individuals regarding effective saving practices and debt management.
Mumbi said that following the regulation by the Central Bank of Kenya (CBK) sets a precedent for responsible lending practices in the digital credit market.
With over Ksh.300 billion disbursed in credit, Tala has been providing financial assistance to borrowers, with the hope to do even more in the regulated space.
Mumbi said the report serves as a valuable resource for understanding the evolving financial behaviors and challenges faced by individuals in the country.
“By fostering a culture of financial literacy, responsible borrowing, and prudent money management, individuals can empower themselves to overcome financial obstacles and work towards a more secure financial future.”
