50pc of borrowers sell assets, take financing loans to pay debts: CBK survey

MONEY SHILLINGS - 50pc of borrowers sell assets, take financing loans to pay debts: CBK survey
Borrowing is fast rising from 10 percent in 2016 to 30 percent in 2019/FILE

NAIROBI, Kenya, Apr 7 – Over 50 percent of borrowers sold assets, borrowed to repay or cut back on expenses to service their loans in the last two years.

This is according to a Financial Access survey by the Central Bank, FSD and Kenya National Bureau of Statistics which also reveals that 25 percent of borrowers were using more than half of their income to repay loans.

The survey showed improved savings with 70 percent of saving formally, informally or at home with the mobile wallet proving to be the most popular savings device followed by the chamas.

Borrowing is fast rising from 10 percent in 2016 to 30 percent in 2019 while mobile banking has gone up from 6 percent to 10 percent.

It also showed Kenya is the third most financial inclusive country in Africa after Seychelles and South Africa with 83 percent of Kenyan adults having access to formal financial services.

Nairobi and Mombasa have the highest access to financial services at 96 and 94 percent respectively.

The survey notes mobile money has been instrumental in driving financial inclusion in the country and has transformed the financial sector with several countries wishing to apply the same technology in their economies.

However, daily transactions are almost entirely cash-based at 98 percent but mobile money is more important especially for bill payments. Apart from cash, Bank transfers are preferred over mobile money.

Borrowing is fast rising from 10 percent in 2016 to 30 percent in 2019 while mobile banking has gone up from 6 percent to 10 percent.

 

Author: worldwidenewscast

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