Nairobi, Kenya, July 30 – A brand new report has revealed a troubling spike in mortgage defaults throughout Kenya, with one in each six grownup debtors having didn’t repay their loans in 2024.
The findings, printed within the newest FinAccess Household Survey, reveal that 16.6 p.c of debtors defaulted final 12 months, up considerably from 10.7 p.c in 2021.
This enhance coincides with a pointy rise in cell and digital lending, which has made credit score extra accessible than ever, particularly amongst younger and first-time debtors.
Financial companies supplier TransUnion Kenya has now raised issues over the rising monetary dangers, urging Kenyans, significantly the under-35 demographic, to take proactive steps in managing their credit score well being by way of its free cell instrument, Nipashe.
TransUnion Kenya CEO Morris Maina famous that whereas entry to credit score can open doorways to training, entrepreneurship, and monetary mobility, lack of economic literacy might entice many debtors in debt cycles that finally hurt their financial prospects.
“Credit, when used correctly, generally is a highly effective enabler,” mentioned Maina.
“But and not using a strong basis in monetary literacy, we danger seeing many younger individuals excluded from future financial alternatives due to poor credit score choices made immediately.”
The survey additional exhibits that whereas formal monetary inclusion has risen to 84.8 p.c of Kenyan adults, the hole in understanding how credit score works stays a severe problem.
Millions now depend on cell loans as their first interplay with credit score, but many lack consciousness of key ideas like curiosity accumulation, reimbursement phrases, and the long-term affect of defaulting on one’s credit score report.
In response, TransUnion is encouraging debtors to make use of the Nipashe platform, a cell app and SMS-based service that permits people to examine their credit score stories, monitor their credit score scores, and obtain personalised monetary recommendation.
Users can obtain the app or entry the service by sending their title by way of SMS to 21272.
According to Maina, such instruments are important in serving to younger Kenyans keep away from pricey monetary errors and construct a wholesome credit score historical past from the outset.
He added that fostering accountable borrowing habits isn’t simply helpful for particular person well-being—it contributes to nationwide financial stability.
To assist first-time debtors, TransUnion can also be sharing sensible steerage to assist them get began, together with the significance of checking one’s credit score standing early, borrowing solely what one can afford to repay, avoiding credit score for non-essential spending, and understanding how credit score scores are calculated.
TransUnion contends that with out early intervention and accessible monetary training, the variety of defaulters might proceed to rise, inserting thousands and thousands liable to long-term exclusion from the formal monetary system.
According to the Digital Financial Services Association of Kenya (DFSAK), Kenyans borrowed a median of Sh500 million day by day, accumulating roughly Sh15 billion per 30 days by way of digital lending channels in early 2025.
Over 8 million Kenyans, or round 16 p.c of the inhabitants, are energetic digital debtors every month.
In 2024, DFSAK knowledge exhibits the sector disbursed roughly Sh180 billion in whole. However, between Sh54 and Sh72 billion of that sum, equal to default charges of as much as 40 p.c, was written off on account of non-performances.
By distinction, defaults on industrial financial institution loans remained round 16.4 p.c on the finish of December 2024.
