As the discussion about the savings culture of Kenyans goes on within and without different circles, Kenya’s largest digital lender, Tala, has revealed that 25 percent of their customers borrow to save, contrary to what many believed about digital borrowers.
In their Tala Money March Report for 2023, the company says “Tala customers have a saving culture, with 25% of their earnings channeled to ‘savings’ such as chamas, saccos or fixed deposit accounts.” Saccos and Chamas are the biggest savings vehicles for Kenyans.
At the same time, slightly over half of consumers have had higher spending in the last 6 months, and are coping by majorly ‘cutting down on expenses’ and ‘reducing spend on luxury items’.
About a quarter of those with higher expenses is eating into their savings to cope, implying consumers are generally saving.
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According to the lender, generally, Tala customers are experiencing lower incomes in 2023; only 27 percent in 2023 vs. 68 percent in 2022 state that their income has increased in the last 6 months, aligning with the decline in those with full-time jobs and those claiming to have alternative income sources.
“This could be due to the fact that presently, with the new government and inflation being higher, avenues to explore with business are not as many as in Q1 2022 when the country’s business environment was still picking up post the Covid era,” said the report released by Tala.
Slightly over a third claim that their financial situation has improved over the last 6 months; majorly for those whose income is higher.
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With only a third stating that their financial situation has improved, Tala customers are generally going through several financial challenges, majorly ‘cost of living expenses’.
Other financial challenge areas are seasonal (school fees, medical emergencies), business-related (slowdown), or income not being sufficient to cover their needs.
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