Kenyans are spending more on education, electricity, and groceries according to a new survey by Kenya’s leading digital lender, Tala. The detailed survey shows how Kenyan households have been utilizing their income and what they spend on when they earn or take a loan.
According to Tala, on a monthly average, Kenyans spent 64 percent of their income on education, 58 percent on electricity and 57 percent on groceries/food. The survey indicates that the majority of Kenyans had the majority of their monthly spending go on education.
52 percent spent on internet and mobile data, 51 percent on transport, 49 percent on loan repayment and water utilities, and 47 percent on rent/house payment. 44 percent went on saving while 38 percent on self-indulgence or shopping.
Medication or medical-related expenses took 33 percent while regular repairs on things such as cars or house took 28 percent. Leisure took 16 percent while business expenses took 2 percent. 1 percent was for supporting family and friends.
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At the same time, 5 percent of Kenyans say they always have cash left for leisure after paying bills, 8 percent say they often have, 31 percent said sometimes, 40 percent said rarely, and 17 percent said they are always left with nothing.
“Loan repayment as an expense is significant as it occurs among half (49 percent) of consumers. Saving culture among consumers is notable, with 44% saving some money from their monthly earnings,” said Tala in their latest survey released on March 12.
According to Tala, living expenses have gone up significantly, with a third of consumers citing they feel utilities have increased by over 20 percent. “Key expenses within the household, e.g. food, groceries, electricity, are the ones that consumers feel have increased much, thus painting the narrative that consumers are generally struggling.”
Many Kenyan consumers cope with the rising cost of living mainly by cutting back on expenses or taking loans according to the stats. The majority of them are opting for mobile loans due to their availability and the ease of accessing them compared to traditional banks.
The incidence of taking loans increased significantly (up 19 percent-pt.). Half of consumers have started a business to get additional income proving that their main income source is not enough for sustenance although business often face numerous challenges as a result of the cost of doing business in Kenya.
What is more, over 90 percent of Kenyan consumers claim to have had financial challenges in the past 6 months, with the rising cost of living expenses being their major financial challenge. Delayed income is increasingly becoming a challenge for consumers, being the only challenge that increased in magnitude compared to previous year – this leaves consumers prone to borrowing.
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