The Tala report reveals a shift in Kenya’s economy, with a 7% increase in business ownership and a 5% decline in full-time employment. Economic strain is evident as many face financial hardships, yet a significant optimism persists regarding future financial conditions. Increased borrowing due to cost of living, alongside a push for financial literacy among digital lenders, shapes the current landscape.
A recent report by Tala highlights a significant change in Kenya’s economic environment, showcasing an increase in business ownership and a decline in full-time employment. The MoneyMarch 2025 Report indicates that business ownership rose by 7 percentage points, whereas reliance on full-time employment dropped by 5 percentage points compared to the previous year.
The report shows a decrease in Kenyans initiating side businesses due to the rising cost of living, which restricts their ability to seek additional income sources. It further reveals that 90% of respondents have experienced financial difficulties over the past six months, with 32% reporting significant financial stress. Nonetheless, 46% of those surveyed remain hopeful about their financial future, illustrating resilience amidst economic challenges.
As the cost of living escalates and incomes are delayed, over one-third of Kenyans have increased their borrowing to manage expenses related to business operations, education, and daily living. Encouragingly, around 80% of borrowers express confidence in their ability to repay their loans. Notably, 52% of Kenyans prefer to maintain a relationship with a single lender, whether a Digital Credit Provider (DCP) or a bank.
Boniface Kamiti, Manager for Consumer Protection at the Competition Authority of Kenya, stresses the importance of customer education among digital lenders. He remarked, “Digital lenders should see their role not just as providers of credit, but as partners in their customers’ financial well-being.” This highlights the necessity of responsible borrowing and financial literacy.
According to the report, long-term goals such as business and home ownership continue to top the financial aspirations of many Kenyans. Respondents tend to allocate 11–20% of their income towards investments, primarily focusing on savings and cooperative societies (SACCOs). However, persistent fears of loss and distrust in investment avenues dissuade some from increasing their saving and investing activities.
Tala’s MoneyMarch campaign, now in its fifth year, seeks to empower Kenyans through financial education and improved access to credit. The report emphasizes the increasing significance of entrepreneurship, financial literacy, and digital lending as vital components of Kenya’s transforming economic landscape.
In summary, the Tala report indicates a notable transition in Kenya’s economy characterized by a rise in business ownership, while traditional full-time employment diminishes. The economic pressures have led many to increase borrowing, yet a significant portion remains optimistic about their financial prospects. Key factors such as financial literacy and support from digital lenders will be essential for aiding Kenyans in navigating these economic challenges effectively.
Original Source: www.tv47.digital
