A new report has given an insight into the plight of Kenyans struggling to pay mobile loans in the wake of the coronavirus pandemic.
According to a report by the Financial Deepening Kenya, at least 22 million Kenyans are struggling to repay their loans.
A survey conducted by the agency further shows that 25 percent of Kenyans prefer digital lending apps to borrow to survive through the pandemic.
Additionally, a significant section of Kenyans prefers getting loans from shopkeepers.
Interestingly, banks and shylocks are the third and fourth most preferred options, respectively. The study shows that nearly half of adults in Kenya suffer a lack of financial resilience and are vulnerable to the pandemic.
The survey adds that about 48 percent of Kenyans could not survive for three months if their current income source is disrupted.
“Covid-19 poses challenges that undermine the traditional coping mechanism. The 48 per cent also cannot not raise Sh8,000 emergency money within a month from any source which is Kenya’s per capita Gross National Income,” the report adds.
The report adds that due to the easing of the pandemic hardships borrowing from friends and family has dropped from 73 percent in May to 55 percent in September.
Retirement age adults are 14 percentage points less resilient than the prime age prevalence.
Notably, about 25 percent of the Kenyan population has savings for emergencies, while 9 percent rely on borrowing for emergencies.
About 24 percent would leverage their social networks when disaster strikes, while 34 percent depend on their employment or employer in case of emergencies.
On sources of income, only two-thirds of Kenyan adults earn the majority of their income from either casual work, farming, or non-farm self-employment.
In the wake of the coronavirus pandemic, most Kenyans were rendered jobless.