The whooping number of Kenyans leaving in debt revealed
Nearly sixty per cent of Kenyans are living in debt according to a new report on financial health and inclusion by consultancy firm Deloitte.
The report has indicated that there is a deteriorating financial health among Kenyans against an increase in the uptake of formal financial services shows only 40 per cent of individuals are balancing income and expenses every day.
According to the report, the only three of 10 Kenyans or 28.3 per cent are able to cope with emergency spending needs while only four in 10 Kenyans have the ability to make future investments.
The report describes financial health as the extent to which someone is able to meet all their current commitments and needs and have the resilience to maintain this in the future.
The report further reveals the Kenyans are experiencing financial ill-health due to costly banking and digital payments, lack of knowledge on financial management and credit & debt.
The report further indicates that digital loans in Kenya are the most recurrently used loan behind social network and money-lender loans. Moreover, those with existing loans are over-indebted or struggling to pay.
The low penetration of insurance, savings and investment products has also been tied to the deteriorating financial health of Kenyans.
Insurance products have been viewed as costly and out of reach while many Kenyans lack money to save from irregular income while others cite the lack of suitable products to save and invest in small sums.
Deloitte recommends accelerating the interoperability of payment systems to cut transaction costs and consumer financial laws to manage Kenyans indebtedness as part of the cure to the financial ill-health.