Reasons Why Kenyans Take Loans – Report

A new survey finds that a majority of Kenyans are increasingly turning to loans to meet basic needs, fund education, and invest in businesses amid tough economic conditions.

The latest Financial Wellness Monitor Report, released on Wednesday, March 25, 2026, by Old Mutual, found that 74% of working Kenyans took out a loan in the past year.

According to the survey, 40% of Kenyans borrowed to meet everyday expenses, making it the leading reason for taking loans.

Why Kenyans Are Taking Loans as Cost-of-Living Pressure Bites

Education was also a major driver of borrowing, with 25% of respondents taking out loans to pay school fees and other education-related costs.

At the same time, 19% borrowed to pay off existing loans.

The report further shows that loans are being used to support businesses:

• 12% borrowed to buy stock or equipment
• 7% took loans to start or boost businesses

Also Read: CBK Reveals Banks Offering Cheap Loans to Kenyans in 2026 [FULL LIST]

Other Pressures Driving Loans

Other reasons cited  for borrowing include:

• Buying furniture and household items (6%)
• Home repairs and maintenance (6%)
• Medical expenses (4%)
• Purchasing vehicles and electronic devices.

The findings come as debt levels remain high, with more than half of respondents reporting they have the same or higher debt compared to last year.

Many households also reported turning to informal borrowing, including loans from friends, family and savings groups, as well as dipping into savings to survive.

Savings and Financial Priorities

The report also highlighted how Kenyans are adjusting their financial priorities in response to economic pressure.

• 71% prioritise income or job security.
• Many are focused on cutting expenses and paying off debt.
• Building emergency funds remains a key goal.

Also Read: Why 379,000 Students Could Miss Out on HELB Loans

At the same time, 91% of respondents reported having specific savings goals, with top targets including children’s education, starting or growing a business, and owning a home.

Coping Mechanisms and Lifestyle Changes

To manage financial strain, households are making significant adjustments:

• Switching to cheaper brands and services
• Moving to more affordable housing
• Delaying major expenses such as travel or investments
• Cutting down on household help

Some also reported falling behind on rent or dipping into savings to stay afloat.

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Old Mutual Life Insurance Company PHOTO/Old Mutual.