Survey: Availability Of Instant Digital Loans Derail Kenyans Saving Habits

The availability of instant digital loans is derailing saving habits among Kenyans according to a new survey by Enwealth and Strathmore University.

The survey dubbed Savings and Investments Behaviour among Kenyans shows 57 per cent of respondents who had taken loans from mobile lending apps indicated this has a negative effect on their saving habits.

Only 17 per cent of respondents indicated that their saving habits had been impacted positively by the use of digital loans.

While survey does not provide a further breakdown of the outcome, the report implies Kenyans are likely opting for digital loans for financing in the place of having savings for uses such as tending to emergencies such as medical bills.

The survey included 244 respondents who are members of pension schemes.

Big ticket purchases such as buying a car and retirement makes up the most use of saved funds ahead of emergency uses, travel & leisure and other uses.

Savings and Credit Cooperatives (Saccos) is meanwhile the most popular avenue for saving and investing ahead of pension through employers, chama & table banking, bank savings and money market funds (MMFs).

According to the survey, the major barrier to increasing savings and investments is having more disposable income as the majority of Kenyans state they are willing to save more should finances allow.

87 per cent or nearly nine out of every 10 surveyed Kenyans stated they save and invest with 48 per cent of nearly five in 10 indicating they save on a monthly basis.

The survey’s respondents list incentives to savings, the launch of innovative products, sensitization and the introduction of mandatory financial management subjects or units in curriculum as means to improve the savings culture.

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