Borrow smart or not at all

Walk into any space in Kenya today, whether it’s a kibanda in Gikomba, a boda stage in Kayole, a matatu Sacco office in Eastleigh, a shop in Kamukunji, or a glass corporate boardroom in Westlands: Beneath the confidence, the hustle and the soft-life appearances, there is one shared reality quietly connecting everyone, “Niko na kaloan kadogo bado nalipa.”

 Debt has become part of the Kenyan economy’s daily language, crossing individuals, SMEs, and corporates alike. From mobile loans and biashara overdrafts to asset financing and supplier credit, almost everyone is servicing something. It is now as common as traffic on Thika Road or that Shuru Whatsapp messages bot by Kenya Revenue Authority or those month-end pressure, and the promise that “mambo yatakuwa sawa next month.”

 But here’s the thing, we don’t just borrow anymore; we live on borrowed time and money. From Fuliza at midnight ukiwa sherehe to “boss, nisaidie na katop-up,” the culture is the same. Easy access, fast approval, and zero patience. You get the money in minutes… but the repayment will camp in your life like a relative who refused to go back upcountry.

 Now let’s be real; debt is not the enemy. In fact, some of the most successful hustles in this country were built on it. The boda rider who financed his bike, the mama mboga who stocked up during peak season, the biashara that took a loan and expanded, that’s good debt. It works, it turns, it pays itself. But then there’s the other side, the one we don’t like talking about.

 Debt for soft life. Debt for show-off. Debt to fix problems that are not even financial. Maybe its that phone you had to upgrade or an event you didn’t want to embarrass yourself.

 That business you keep injecting money into without fixing the leaks. That’s how people end up working… just to pay yesterday and you miss your brighter tomorrow. We keep hoping a magic will happen and wipe off our debt, but wapi, ziko na sisi bumper to bumper kama hii economy ya Mr K……..

 And Kenyan businesses? Many are not borrowing to grow, they are borrowing to survive while waiting for those customers of ‘we are assessing our cashflow and we will advice when to pay’. Most have a month on month standing overdraft to settle salaries and key suppliers while you see them flashing published impressive financial statements. They are just having profit on paper but no cashflow in their bank and that is a disaster and a statistics in waiting. That’s why you keep asking yourself, ‘that business has always posted positive results,why are they been auctioned or liquidated?’ Now you know why.

 So, the elephant in the room is always, when should you take or not take a loan? The answer always seems simple: Take it when it makes you money. If it cannot generate income or improve your capacity, think twice.

 Take it when you know exactly how you’ll repay it, not on hopes that things will work out, but on actual numbers.

 And when should you avoid it? When it’s for lifestyle. When you don’t understand the terms. When you’re using it to cover losses instead of fixing the business. Because the truth is simple: Debt doesn’t create discipline, it exposes your lack of it.

 What can we do better? As individuals, build even a small buffer. Know why you’re borrowing. Respect repayment like rent, you don’t negotiate with it. As business owners, separate your money. Track your cash. Not every sale is profit, and not every customer is worth being given credit that becomes a night mere. As a corporate, stop financing other businesses through those credit terms that feels sweet to insert in the contract terms and will never be honored by your customer since we always think ‘customer is always right’.

 Kenya doesn’t just have a debt problem, we have a behavior problem. We borrow fast, plan slowly and hope things will sort themselves out. But they don’t.

 And maybe that is the conversation Kenyans now needs to have more honestly. Before taking that new loan, overdraft, top-up, asset finance or even that “harmless” digital loan for the weekend vibe, pause kidogo and seek professional advice first.

 Because borrowing should be logical, not emotional.

 A good loan should improve your cash flow, increase your income, or build an asset, not fund pressure, appearances, panic or temporary excitement. The problem is that most people consult friends before borrowing but consult experts after defaulting.

 That order needs to change. Whether you are a biashara owner considering expansion debt, an SME struggling with cash flow pressure, a salaried Kenyan drowning in  mobile loans or a company relying too heavily on overdrafts to survive; sometimes, the smartest financial decision is not taking the loan at all.

 At Marathon Debt Recovery Ltd, we work daily with individuals, SMEs and corporates who once believed on  “nitajipanga mbele.” Some recover, some restructure, and unfortunately, some lose businesses, assets, relationships and peace of mind simply because no one helped them properly assess the debt before they signed.

 Reach out for debt advisory, restructuring, recovery support and financial risk guidance before debt becomes a crisis. Because in this economy, surviving financially is no longer just about working hard, it is about borrowing wisely and acting strategically.

The writer is a Certified Public Accountant, credit management specialist and founder of Marathon Debt Recovery Ltd.