TransUnion’s latest Consumer Pulse Study reveals a modest financial rebound for Kenyan households in Q2 2024, driven by new business ventures, improved debt management, and reduced job loss impacts.
The study shows that 34% of consumers experienced income increases, particularly among Gen Z [18–26 years old] and Millennials [27–42 years old]. Although 36% reported income decreases, 85% are optimistic about future income growth within the next 12 months, especially the younger generations.
Bill payment capacity has improved, with 64% able to pay in full, up from last year. Additionally, those unable to pay bills decreased by six percentage points to 36%. Consumers are addressing debt proactively, with 51% paying partial amounts and 33% using savings to service debts.
Behaviour Trends and Financial Choices
Consumer behavior trends indicate a reduction in non-essential spending, with 56% of households, mainly Gen X [43–58 years old], cutting discretionary expenses. Looking ahead, 49% plan to reduce discretionary spending, and 42% anticipate cutting back on large purchases. Increased disposable income will likely go towards retirement funds [48%], bills and loans [41%], and digital services [38%]. Contributions to emergency funds have risen to 41%, up from 30% in Q2 2023.
Morris Maina, CEO of TransUnion Kenya, suggests that easing inflationary pressures could boost disposable income and household consumption, potentially reinstating digital services and subscriptions.
Credit and Financial Inclusion
Financial inclusion is rising in Kenya due to mobile technologies and digital payment methods. Although 99% of consumers deem credit access essential, only 36% feel they have sufficient access, a slight improvement from last year. The demand for credit remains high, with 60% planning to apply for new credit or refinance existing credit within the next year. Millennials [55%] and Gen X [58%] show the highest interest in new personal loans, while 38% are considering mobile loans. Interest in ‘buy now, pay later’ [BNPL] services has increased to 33%, up five percentage points from last year. However, 66% of consumers who intended to apply for credit chose not to, mainly due to high costs.
Monitoring Credit Reports
Credit monitoring is crucial, with 91% of consumers viewing it as important. The frequency of credit report checks has increased, with 59% reviewing monthly. Including alternative data in credit reports, such as rental payments and BNPL loans, could improve credit scores, according to 60% of respondents.
Fraud and Consumer Education
Digital platform usage continues to grow, with 42% conducting at least half of their transactions online, up 10 percentage points from last year. However, digital fraud remains a concern. In Q2 2024, 72% of consumers reported being targeted by digital fraud schemes but avoided falling victim, and 8% fell victim. Vishing, smishing, and phishing scams are on the rise. Although awareness is high, consumer concern about sharing personal information is significant at 91%, down from 94% in Q2 2023. Concerns include invasion of privacy [81%] and fear of identity theft [67%], highlighting the need for robust security measures and consumer education to maintain trust in digital platforms.
Maina emphasizes the importance of regular credit monitoring for early detection of fraudulent activities, allowing consumers to take timely corrective actions.
