NAIROBI, Kenya, March 22 – A new survey released by digital lender, Tala has reported improved financial health of the digital lenders on its client base signaling improved financial resilience partly attributed to the relaxation of some of the Covid-19 restrictions.
The survey dubbed ‘MoneyMarch 2022” noted that about two-thirds – 68 percent of Tala customers had seen an improvement in their income/cash flow in the last six months.
Another 72 percent of the 423 customers surveyed said it is ‘very possible’ to raise Shs 7,000 in an emergency, mainly from savings or by reducing spending.
“Generally, expenditure has increased regardless of whether income has increased or not, which speaks to the need for customers to have more than 1 source of income,” the survey noted.
On borrowing trends, 59 percent of customers said they increased their borrowing in the last 6 months.
The top reason for 78 percent of the participants taking loans is business-related, to either pay business expenses or add stock.
Another indication of the improved financial resilience, the survey noted was improved consumer behavior with 78 percent of lenders saying they paid their expenses on time and nearly half of them noting that they save regularly by putting money aside.
Nearly half (42 percent) indicated that they ‘save occasionally when they have money left over after expenses.”
The majority of Tala customers pay their expenses on time, whether partially or in full. About half are burdened by expenses, and saving is an afterthought due to the strain of expenses on their earnings; the other half has the potential to save, and the majority of them do so regularly.
Teddy Kahiro, User Research Manager at Tala emphasized the need for financial institutions to guide Kenyans on saving effectively and how to start/grow a business.
“We believe that empowering our customers to make financial decisions based on education, will help break the cycle of over-indebtedness and bring more underbanked Kenyans into the financially healthy circle,” he said.
Overall, the survey noted that the majority of digital lenders are full-time employees accounting for 68 percent of total customers
Of the full-time employees, 82 percent of them have another source of income.
“About 8 in every 10 of all Tala customers have more than 1 source of income to keep up with the growing needs and expenses as seen in the market over the last 1 year,” the survey indicated.
