For many Kenyan households, the arithmetic no longer adds up as energy prices spike, further eroding their spending power.
Every month, the cost of rent, transport, food, school fees and healthcare continues to rise while incomes remain largely unchanged. Families are working harder and still relying on credit to bridge income gaps and attend to emergencies.
Digital lending has democratised access to credit for everyday Kenyans and forever transformed the credit market. M-shwari, Fuliza, and Tala, among others, have enabled small business owners to restock, parents to pay school fees on time, workers to cover emergency expenses and entrepreneurs to seize opportunities that would otherwise have been out of reach.
Kenya's financial inclusion journey has also been remarkable, with formal financial access rising to approximately 85 per cent in 2025, driven largely by digital financial services and innovation.
However, financial inclusion without financial literacy can easily become financial strain.
Recent trends show encouraging progress and areas that require attention. The Tala MoneyMarch 2026 report indicates that 59 per cent of Kenyans are now saving through banks, Saccos and chamas.
At the same time, one in five households reported that their cost of living has risen by more than 20 per cent over the last six months, highlighting the continued pressure on family budgets.
These findings suggest that while Kenyans are becoming more financially conscious, many are still navigating difficult economic realities. Managing household debt therefore begins with understanding one's financial position.
The first step is understanding your total monthly income from all sources, as knowing what you truly earn helps you budget effectively and borrow responsibly.
A realistic budget is the foundation of financial resilience. The second step is to prioritise essential expenses, consistently setting aside savings and making room for reasonable leisure; households can better manage financial shocks without compromising their overall wellbeing.
Only after accounting for all these expenses should a household determine whether it can comfortably afford loan repayments. A simple question can prevent future financial stress: If I borrow today, will I still be able to repay this loan while meeting all my other obligations?
If the answer is uncertain, it may be worth reconsidering the amount borrowed or postponing the loan until finances improve.
For households struggling with debt, all is not lost. The same budgeting exercise can help identify opportunities to recover. Reducing non-essential spending for a few months or taking on additional income through part-time work can significantly improve repayment capacity. Increasingly, many Kenyans are adopting this approach by diversifying their income sources, reflecting a growing culture of resilience.
Whenever possible, borrowing should be purposeful and geared towards productive outcomes. While Kenya has made remarkable progress in expanding access to financial services, the FinAccess Household Survey found that only 18.3 per cent of adults are financially healthy, highlighting that access alone does not guarantee financial well-being. Credit used to support income-generating activities, education or farming is more likely to strengthen a household's financial position.
The responsibility of responsible borrowing now lies on both the customers and the financial institution. Access to credit and financial literacy should go hand in hand.
Kenya has made tremendous strides in expanding financial inclusion. The next phase of that journey should focus on strengthening financial health. By combining responsible borrowing and continuous financial education, households can transform debt from a burden into a stepping stone toward long-term financial resilience.
In today's economy, managing household debt is no longer simply about paying back a loan. It is about building financial habits that allow families to survive economic uncertainty and to thrive despite it.
- The writer is General Manager, Tala-Kenya
