NAIROBI, Kenya, Nov 24 – Kenyans are taking out digital loans to spend ahead of the December celebrations amid tough economic challenges from inflation.
Tala Senior Growth and Marketing Manager Steven Ruhohi said that customers are applying for credits to meet their needs amid rising expenses.
This comes amid high fuel prices and increased food costs, which have negatively impacted Kenya’s purchasing power.
While a liter of petrol currently costs Sh217.36 in Nairobi, similar diesel and kerosene amounts go for Sh203.47 and Sh203.06, respectively, which are at all-time highs.
Last month, Kenya’s monthly inflation grew to 6.9 percent from 6.8 percent in September.
“We can see customers turning to digital loans to try and bridge the gap between their needs and the increased expenses. So, to answer your question, we can see the uptake in loans has actually gone up,” Ruhohi told Capital Business.
Ruhohi added that users who have been defaulting are repaying existing loans in order to take on new ones.
“If you also look at the number of customers whose loan limits have increased, we can see customers are very keen on ensuring that they borrow and repay on time, so that their limits continue to grow,” he explained.
“We’re seeing quite a number of customers getting all the way to 50,000, which is the maximum amount of money you can get from Tala.”
However, he foresees clients spending less in the December period amid tough times and the expected re-opening of schools in January.
“We anticipate that customers will make sure they get value for their money before they spend money on it. So, we anticipate the customer will compensate for reduced incomes.”
