Why Kenyans prefer digital lenders, chamas for emergencies

Kenyans use digital lenders and chamas for emergency loans. [File Courtesy]

For the first time, digital credit providers have overtaken informal networks such as family support and chama payouts as the first port of call for Kenyans facing a financial emergency, a new survey shows.

The report signals a fundamental shift in how households manage money in a tightening economy.

According to Tala’s 2026 MoneyMarch Report released last week, 91 per cent of consumers now borrow from digital credit providers, up from 87 per cent a year earlier.

The shift marks a break from traditional coping mechanisms that have long underpinned Kenya’s informal economy.

Yet, even as digital lending becomes the default, Kenyans are borrowing less frequently and in smaller amounts, suggesting a growing caution. When they do take loans, the money goes largely to cover business costs, school fees, and everyday living expenses.

One area of sharp increase is medical borrowing. Twenty-six per cent of consumers said they had borrowed to settle a medical bill for themselves, a friend, or a family member in the past six months, up from 17 per cent a year earlier.

“These findings show that Kenyans are adapting. They are saving more, borrowing more responsibly, and turning to digital tools for speed and convenience,” said General Manager at Tala Kenya Annstella Mumbi, following the report’s launch.

The report, now in its sixth year, also found that 59 per cent of Kenyans are saving regularly through bank accounts or chamas, up from 56 per cent in 2025, driven by a need for financial security and the ability to handle unexpected expenses.

One in five Kenyans reported that their living costs had jumped by more than 20 per cent in the past six months. Despite the pressure, business ownership has risen by eight percentage points from 2025, suggesting that more Kenyans are turning to entrepreneurship to supplement shrinking incomes.

At the same time, the proportion of salaried workers running side hustles has declined, indicating that many are finding it harder to diversify their income streams.

For Jane Wanjiku, a vegetable vendor in Naivasha’s Karagita market, the change has been deeply personal. She used to rely on her chama and family for help during tough times, but now she turns to her phone.

“I used to fear digital loans because of the interest,” she said. “But when my child fell sick last month, I had no choice. I borrowed, paid the bill, and repaid little by little. It saved me.”

Wanjiku also saves daily on her mobile money account. “Emergencies come when you least expect them. I don’t want to be caught off guard,” she said.