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    Nairobi’s Central Land Registry Set to go Live on ArdhiSasa

    Nairobi’s Central Land Registry Set to go Live on ArdhiSasa

    Asante EPZ Limited Fined For Illegal Merger By CAK

    Mobile phone subscribers decline by over 200,000 – CA Data

    Drunk Driving Will Now Cost You Sh100,000 Fine, As Alco-blow Returns

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    IBL Group acquires Amethis stake in Naivas International

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    High Court Orders Shut Down of All Sports Streaming Websites

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    Johan ICT Kenya launched to offer data protection for firms

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    Türkey ambassador promotes bi-lateral trade with Kenya

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    Police boss with checkered history breathes his last

    Police boss with checkered history breathes his last

    Nairobi County Offices Switched off Over Ballooning Power Bills

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  • Markets
    Emirates Takes Triple Gold For The Third Year In a Row For Safety

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    IBL Group acquires Amethis stake in Naivas International

    IBL Group acquires Amethis stake in Naivas International

    Revealed: The number of Kenyans with over Sh100 million in their account

    The raging debate on Twitter over the lack of US dollar in Kenya and the downplaying of the issue by the Central Bank of Kenya

    Agricultural subsidies unfair – Kenya tells WTO

    Agricultural subsidies unfair – Kenya tells WTO

    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

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    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

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    Bad News for Kenyans As Fuel Prices Increase By Sh 9

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    Jambojet and Cellulant Partner on Loyalty Customer Rewards

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    Gov’t to Give Sh100, 000 for Someone Who Will Name This Building

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  • Real Estate
    National Construction Authority Suspends Licences of 18 Contractors

    National Construction Authority Suspends Licences of 18 Contractors

    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

    NEMA Re-Introduces Another Tax for Developers

    NEMA Re-Introduces Another Tax for Developers

    Centum Digitalizes Real Estate Sector

    Centum Digitalizes Real Estate Sector

    Superior Homes Launches Reward Program for Investors

    Superior Homes Launches Reward Program for Investors

    Report: High Demand for Luxury Houses in Nairobi Fueling  Increase in Prices

    Report: High Demand for Luxury Houses in Nairobi Fueling Increase in Prices

    Regional property summit kicks off in Nairobi

    Regional property summit kicks off in Nairobi

    Five Reasons Why Real Estate Increases in Value

    Five Reasons Why Real Estate Increases in Value

    Optiven Foundation Launches TVET Sponsorship Program

    Optiven Foundation Launches TVET Sponsorship Program

  • Tech
    Tecno Kenya Announces Launch Of Camon 19 Series & Spark 9 Series

    Tecno Kenya Announces Launch Of Camon 19 Series & Spark 9 Series

    Nairobi Women to start offering online outpatient services

    mTek Secures Sh340m to Accelerate Paperless Insurance in Kenya

    This is the New Way to Share Your Data Bundles , Minutes, Voice and SMSs

    This is the New Way to Share Your Data Bundles , Minutes, Voice and SMSs

    Merchants Challenged to Integrate Payment Gateways to Prevent Online Payment Fraud

    Merchants Challenged to Integrate Payment Gateways to Prevent Online Payment Fraud

    Samsung Introduces Its 2022 Lineup of Appliances to Dealers

    Fathers Day Deals: Samsung Honors Fathers With Great Discounts

    Samsung Showcases its Premium Consumer Electronics Range

    Samsung Showcases its Premium Consumer Electronics Range

    OPPO Launches its Flagship Device Find X5 in Kenya to Retail for Sh100,000

    OPPO Launches its Flagship Device Find X5 in Kenya to Retail for Sh100,000

    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

    Why the LG TONE Free HBS-FN6 Wireless Earbuds are a Must Have

    Why the LG TONE Free HBS-FN6 Wireless Earbuds are a Must Have

  • World Business
    Why Mercedes Benz is Recalling Their Old Models

    Why Mercedes Benz is Recalling Their Old Models

    Cold comfort awaits a springtime Davos

    Cold comfort awaits a springtime Davos

    Meet The Richest Man Who Can Fund Kenya’s Budget Alone for 10years

    Meet The Richest Man Who Can Fund Kenya’s Budget Alone for 10years

    EA Sports End 29 Years of Video Game Partnership With FIFA

    EA Sports End 29 Years of Video Game Partnership With FIFA

    Central African Republic Adopts Bitcoin as an Official Currency

    Central African Republic Adopts Bitcoin as an Official Currency

    Netflix Stock Collapses After Losing 200,000 Subscribers

    Netflix Stock Collapses After Losing 200,000 Subscribers

    Putin spokesman refuses to rule out use of nuclear weapons if Russia faced an ‘existential threat’

    Putin spokesman refuses to rule out use of nuclear weapons if Russia faced an ‘existential threat’

    How new regulations are shaking up the world’s fastest sport

    How new regulations are shaking up the world’s fastest sport

    President Uhuru Urges International Community to Lift Sanctions on Zimbabwe

    President Uhuru Urges International Community to Lift Sanctions on Zimbabwe

  • KBF
    • All
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    • Insurance
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    • Opinion
    Johan ICT Kenya launched to offer data protection for firms

    Johan ICT Kenya launched to offer data protection for firms

    Winfall For Tea Farmers as Bonus Set to Increase

    Winfall For Tea Farmers as Bonus Set to Increase

    St John Ambulance Seeking Sh12 million to Train Bodaboda Operators

    St John Ambulance Seeking Sh12 million to Train Bodaboda Operators

    Samsung Introduces Its 2022 Lineup of Appliances to Dealers

    Fathers Day Deals: Samsung Honors Fathers With Great Discounts

    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

    Kenya set to host first ever transport awards

    Kenya set to host first ever transport awards

    Zamara Feted as the Overall Best Insurance Broker of the Year

    Zamara Feted as the Overall Best Insurance Broker of the Year

    Jambojet and Cellulant Partner on Loyalty Customer Rewards

    Jambojet and Cellulant Partner on Loyalty Customer Rewards

    Peter Kioko Named National Bank of Kenya Acting Managing Director

    Peter Kioko Named National Bank of Kenya Acting Managing Director

    • Agribusiness
    • Banking
      Procedure for funding your Metropolitan National Sacco account through MPESA

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      KCB Group Shareholders Approve Sh9.64B in Dividend Payout

      KCB Group Shareholders Approve Sh9.64B in Dividend Payout

      DIB Bank Opens Its 6th Branch

      DIB Bank Opens Its 6th Branch

      10 Kenyan SACCOs you should consider investing in for high returns

      How’s your savings so far this year?

      Bank of Kigali Profits Rise to Sh1.8 Billion

      Bank of Kigali Profits Rise to Sh1.8 Billion

      KCB Sustainability Efforts Win Global Award

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      New Platform to Help Kenyans Save From as Little as Ksh5 bob

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      Stanbic Bank Ink Deal To Champion Women Empowerment Iniatives

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      Opinion: Setting a New Standard for Smartphones in Our Changing World

Kenyan Business Feed
  • Home
  • News
    Nairobi’s Central Land Registry Set to go Live on ArdhiSasa

    Nairobi’s Central Land Registry Set to go Live on ArdhiSasa

    Asante EPZ Limited Fined For Illegal Merger By CAK

    Mobile phone subscribers decline by over 200,000 – CA Data

    Drunk Driving Will Now Cost You Sh100,000 Fine, As Alco-blow Returns

    Drunk Driving Will Now Cost You Sh100,000 Fine, As Alco-blow Returns

    IBL Group acquires Amethis stake in Naivas International

    IBL Group acquires Amethis stake in Naivas International

    High Court Orders Shut Down of All Sports Streaming Websites

    High Court Orders Shut Down of All Sports Streaming Websites

    Johan ICT Kenya launched to offer data protection for firms

    Johan ICT Kenya launched to offer data protection for firms

    Türkey ambassador promotes bi-lateral trade with Kenya

    Türkey ambassador promotes bi-lateral trade with Kenya

    Police boss with checkered history breathes his last

    Police boss with checkered history breathes his last

    Nairobi County Offices Switched off Over Ballooning Power Bills

    Nairobi County Offices Switched off Over Ballooning Power Bills

  • Markets
    Emirates Takes Triple Gold For The Third Year In a Row For Safety

    Emirates Takes Triple Gold For The Third Year In a Row For Safety

    IBL Group acquires Amethis stake in Naivas International

    IBL Group acquires Amethis stake in Naivas International

    Revealed: The number of Kenyans with over Sh100 million in their account

    The raging debate on Twitter over the lack of US dollar in Kenya and the downplaying of the issue by the Central Bank of Kenya

    Agricultural subsidies unfair – Kenya tells WTO

    Agricultural subsidies unfair – Kenya tells WTO

    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

    Bad News for Kenyans As Fuel Prices Increase By Sh 9

    Bad News for Kenyans As Fuel Prices Increase By Sh 9

    Jambojet and Cellulant Partner on Loyalty Customer Rewards

    Jambojet and Cellulant Partner on Loyalty Customer Rewards

    Gov’t to Give Sh100, 000 for Someone Who Will Name This Building

    Gov’t to Give Sh100, 000 for Someone Who Will Name This Building

  • Real Estate
    National Construction Authority Suspends Licences of 18 Contractors

    National Construction Authority Suspends Licences of 18 Contractors

    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

    CCI Global, Gateway Real Estate Africa start Construction of new Contact Centre in Kenya

    NEMA Re-Introduces Another Tax for Developers

    NEMA Re-Introduces Another Tax for Developers

    Centum Digitalizes Real Estate Sector

    Centum Digitalizes Real Estate Sector

    Superior Homes Launches Reward Program for Investors

    Superior Homes Launches Reward Program for Investors

    Report: High Demand for Luxury Houses in Nairobi Fueling  Increase in Prices

    Report: High Demand for Luxury Houses in Nairobi Fueling Increase in Prices

    Regional property summit kicks off in Nairobi

    Regional property summit kicks off in Nairobi

    Five Reasons Why Real Estate Increases in Value

    Five Reasons Why Real Estate Increases in Value

    Optiven Foundation Launches TVET Sponsorship Program

    Optiven Foundation Launches TVET Sponsorship Program

  • Tech
    Tecno Kenya Announces Launch Of Camon 19 Series & Spark 9 Series

    Tecno Kenya Announces Launch Of Camon 19 Series & Spark 9 Series

    Nairobi Women to start offering online outpatient services

    mTek Secures Sh340m to Accelerate Paperless Insurance in Kenya

    This is the New Way to Share Your Data Bundles , Minutes, Voice and SMSs

    This is the New Way to Share Your Data Bundles , Minutes, Voice and SMSs

    Merchants Challenged to Integrate Payment Gateways to Prevent Online Payment Fraud

    Merchants Challenged to Integrate Payment Gateways to Prevent Online Payment Fraud

    Samsung Introduces Its 2022 Lineup of Appliances to Dealers

    Fathers Day Deals: Samsung Honors Fathers With Great Discounts

    Samsung Showcases its Premium Consumer Electronics Range

    Samsung Showcases its Premium Consumer Electronics Range

    OPPO Launches its Flagship Device Find X5 in Kenya to Retail for Sh100,000

    OPPO Launches its Flagship Device Find X5 in Kenya to Retail for Sh100,000

    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

    Why the LG TONE Free HBS-FN6 Wireless Earbuds are a Must Have

    Why the LG TONE Free HBS-FN6 Wireless Earbuds are a Must Have

  • World Business
    Why Mercedes Benz is Recalling Their Old Models

    Why Mercedes Benz is Recalling Their Old Models

    Cold comfort awaits a springtime Davos

    Cold comfort awaits a springtime Davos

    Meet The Richest Man Who Can Fund Kenya’s Budget Alone for 10years

    Meet The Richest Man Who Can Fund Kenya’s Budget Alone for 10years

    EA Sports End 29 Years of Video Game Partnership With FIFA

    EA Sports End 29 Years of Video Game Partnership With FIFA

    Central African Republic Adopts Bitcoin as an Official Currency

    Central African Republic Adopts Bitcoin as an Official Currency

    Netflix Stock Collapses After Losing 200,000 Subscribers

    Netflix Stock Collapses After Losing 200,000 Subscribers

    Putin spokesman refuses to rule out use of nuclear weapons if Russia faced an ‘existential threat’

    Putin spokesman refuses to rule out use of nuclear weapons if Russia faced an ‘existential threat’

    How new regulations are shaking up the world’s fastest sport

    How new regulations are shaking up the world’s fastest sport

    President Uhuru Urges International Community to Lift Sanctions on Zimbabwe

    President Uhuru Urges International Community to Lift Sanctions on Zimbabwe

  • KBF
    • All
    • Agribusiness
    • Banking
    • Insurance
    • Manufacturing
    • Opinion
    Johan ICT Kenya launched to offer data protection for firms

    Johan ICT Kenya launched to offer data protection for firms

    Winfall For Tea Farmers as Bonus Set to Increase

    Winfall For Tea Farmers as Bonus Set to Increase

    St John Ambulance Seeking Sh12 million to Train Bodaboda Operators

    St John Ambulance Seeking Sh12 million to Train Bodaboda Operators

    Samsung Introduces Its 2022 Lineup of Appliances to Dealers

    Fathers Day Deals: Samsung Honors Fathers With Great Discounts

    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

    Criminal Syndicate Defrauding Kenyan Accounts and Buying Bitcoins Thwarted

    Kenya set to host first ever transport awards

    Kenya set to host first ever transport awards

    Zamara Feted as the Overall Best Insurance Broker of the Year

    Zamara Feted as the Overall Best Insurance Broker of the Year

    Jambojet and Cellulant Partner on Loyalty Customer Rewards

    Jambojet and Cellulant Partner on Loyalty Customer Rewards

    Peter Kioko Named National Bank of Kenya Acting Managing Director

    Peter Kioko Named National Bank of Kenya Acting Managing Director

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    • Banking
      Procedure for funding your Metropolitan National Sacco account through MPESA

      Procedure for funding your Metropolitan National Sacco account through MPESA

      KCB Group Shareholders Approve Sh9.64B in Dividend Payout

      KCB Group Shareholders Approve Sh9.64B in Dividend Payout

      DIB Bank Opens Its 6th Branch

      DIB Bank Opens Its 6th Branch

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      Bank of Kigali Profits Rise to Sh1.8 Billion

      Bank of Kigali Profits Rise to Sh1.8 Billion

      KCB Sustainability Efforts Win Global Award

      Russo Replaces Joshua Oigara as KCB CEO

      Absa Earns Global Recognition for its energy and water efficiency investments

      Absa Earns Global Recognition for its energy and water efficiency investments

      LAW: Sacco members will soon use household goods as security for loans

      10 SACCOs in Kenya you should consider investing in for high returns

      Housing Finance Swings Back to Profitability

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    • Insurance
      Zamara Feted as the Overall Best Insurance Broker of the Year

      Zamara Feted as the Overall Best Insurance Broker of the Year

      How Rot in The Insurance Sector is Exposing Kenyans to Lose Funds

      How Rot in The Insurance Sector is Exposing Kenyans to Lose Funds

      APA Life Assurance Partners With Craydel To Financially Empower Students

      APA Life Assurance Partners With Craydel To Financially Empower Students

      Kenya Orient Life Assurance Bags ‘Pension Marketing Campaign of The Year’ Award

      Kenya Orient Life Assurance Bags ‘Pension Marketing Campaign of The Year’ Award

      Jubilee Acquires Additional Stake in SEACOM

      Jubilee Acquires Additional Stake in SEACOM

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      Opinion: Setting a New Standard for Smartphones in Our Changing World

      Opinion: Setting a New Standard for Smartphones in Our Changing World

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More Kenyans Are Struggling To Pay Small Debts: CBK survey

by Montui
October 25, 2019
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Half of Kenyans who take goods from shopkeepers on credit either fail or delay to pay back, reveals a Central Bank of Kenya (CBK) report that reflects the cash flow problems in an economy plagued by job cuts and modest economic activity.

The CBK Financial Sector Stability report shows that 45.4 percent of those who acquired goods on credit from shopkeepers had defaulted, threatening the stability of corner shops and groceries.

The banking regulator has raised the alarm on the rising incidence of defaulters at shops, which is nearly three times that of mobile phone loans, arguing that it has the potential of putting pressure on bankers that lend to the retailers.

The drop comes in a period when corporate Kenya has witnessed reduced profitability that has ushered in job cuts, freezes in hiring and near stagnant wages in the race to protect profit margins.

This has hurt cash flow for both individual and small firms in what the CBK says has led many Kenyans to say their financial health has worsened despite growth in gross domestic product (GDP).

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“Default rate for shopkeeper’s credit in the form of goods and services was 45.6 percent but shopkeeper’s credit in form of cash had default rate of just 1.8 percent,” said the CBK.

“Inability of households to repay goods purchased on credit reduces the capacity of shopkeepers to repay their loans, which reduces asset quality of financial institutions.”

CBK reckons that shopkeepers now account for the largest proportion of credit, reflecting cash flow challenges for both homes and businesses.

While Kenya’s economy expanded 5.8 percent last year from 4.8 percent in 2017, private sector activity — which translates to jobs and higher pay — has remained muted. Companies are struggling with reduced sales and profits in a soft economy that has persisted since 2017 when Kenya went through a bruising General Election.

Key firms have put on hold hiring of new staff in an economy that has also witnessed a string of job losses in recent months affecting nearly all sectors.

“Despite a robust GDP growth in 2018 and 83 percent access to formal financial services by Kenyans, the proportion of households who felt that their financial health status worsened in the 2018 survey increased to 51 percent from 34.3 percent in the 2015 survey,” CBK said.

The worsening household financial health also hurt lenders, providing loans through mobile phone platforms as the ease of digital borrowing created an ever-growing pool of distressed borrowers.

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CBK ranked defaults of mobile loans as second worst with about 18.1 percent of the borrowers in default. Only 2.2 percent of bank borrowers defaulted on their loans while Saccos had 2.9 percent.

Many Kenyans now find they can get loans in minutes with banks and providers like Tala and Branch relying heavily on algorithms that build a financial profile of customers in the quest to minimise the risk of default.

The higher non-performing digital loans have triggered an increase in the number defaulters reported to one of Kenya’s three credit reference bureaus (CRBs), hurting the borrowers’ chances of being able to borrow more. In the last three years, 2.7 million people out of a population of around 45 million, have been negatively listed with CRBs, according to official data. The bulk of the defaulters had borrowed loans below Sh1,000, mostly through mobile phones.

CBK reckons that the defaults are rising because the loans are not being channelled for productive activities that empower borrowers to settle their loans on time.

“The main expenditures on which borrowers diverted their loans included food items, utility bills, unexpected emergencies and paying off other loans,” CBK said. “These expenditures do not generate income to service the loans.”

The regulator says the high interest rates linked to digital loans are also behind the defaults. Tens of unregulated microlenders invaded Kenya’s credit market in response to the growth in demand for quick loans. Their proliferation has saddled borrowers with high interest rates, which rise up to 520 percent when annualised.

“Lack of transparency on the side of the loan provider affects borrowers’ probability of default,” the CBK report says.

“This is more common for mobile banking loans, and those from informal providers, where terms of the loan in terms of repayment and interest were not well understood.”


Kenyan Business Feed is the top Kenyan Business Blog. We share news from Kenya and across the region. To contact us with any alert, please email us to [email protected]

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