This archive report was first published on 4 July 2021.
According to a survey conducted by Ipsos among Kenyans living in informal settlements, the COVID-19 pandemic has significantly impacted the ability of borrowers to repay loans. The survey, conducted between June 18 and 25, revealed that 44% of Kenyans had loans in June.
Notably, 55% of respondents reported difficulties in repaying loans due to the pandemic. This is a stark contrast to the 1% who claimed that repaying loans during the pandemic was easier than before.
The survey also found that borrowing was higher in rural areas, with 45% of respondents in these areas having loans, compared to 42% in urban areas. The North Eastern region had the lowest loan uptake at 25%, while the rest of the regions averaged 40%.
Regarding repayment, 24% of respondents indicated that they were repaying their loans on time, while 55% were making late repayments or defaulting. Furthermore, 10% of respondents were unable to pay their loans.
Interestingly, 53% of respondents reported an increase in the frequency of borrowing during the pandemic, while 27% reported a decrease. The survey also found that 52% of those who took loans were employed, 47% were self-employed, and 27% identified as students.
When it comes to loan sources, 87% of respondents obtained loans from a single provider, while 13% sought loans from multiple providers. Notably, 57% of Kenyans sourced loans from digital lenders, compared to 22% from banks and 17% from Saccos.
Majority of the respondents took loans to start a business, while 25% and 24% took loans to buy food and pay school fees, respectively. Additionally, 13% took loans to pay medical bills, and 3% took a loan to construct a house.
