New Survey Shows Counties With Worst Loan Defaulters

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Marsabit town PHOTO/Courtesy

Marsabit, Garissa, Samburu and Isiolo counties have the highest proportion of borrowers defaulting on credit, a new survey has shown.

The survey showed that 50.9 percent of surveyed respondents had defaulted on mobile loans last year and owed other lenders such as shopkeepers and shylocks.

About 41.8 per cent of those owing friends and family defaulted, with 40.6 per cent and 31.3 per cent owing shopkeepers and shylocks unable to clear their debts.

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The survey conducted by Central Bank of Kenya (CBK), FSD Kenya and the Kenya National Bureau of Statistics (KNBS) showed the rates of default in the four counties ranged between 47 percent and 74 percent.

Notably, this has been attributed to the drought that has hit the four counties in the past two years as many households depend on livestock.

“Marsabit, Garissa and Samburu counties recorded the highest level of debt distress proxied by default rates of 74 per cent, 50 per cent and 58 per cent among the adult population, respectively

“This may be explained by the climate-related shock of drought facing these counties that have reduced the ability of borrowers to repay their loans,” the survey showed.

Busia, Nandi and Siaya recorded the lowest incidence of loan defaults.

As earlier reported on WoK, Trans Nzoia County has the highest population of financially stable people, ahead of Nairobi, Mombasa, Nakuru and Kisumu counties.

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The same survey showed that an estimate 37 percent of individuals in Trans Nzoia are able to meet their basic needs and still save for future and emergencies.

This was higher compared to Nairobi, Kiambu, Kirinyaga and Kajiado counties where 35.3 percent, 29.9 percent, 29.5 percent and 27.7 percent of people can meet current and future needs respectively.

“Analysis of consumers’ life priorities and financial needs and how financial services are used to meet these needs and support their livelihoods for improved well-being at the county level reveals interesting outcomes about the impact dimension of financial inclusion

“Counties with the highest population that is formally included [financially], recorded the largest proportion of adults that are categorised as financially healthy,” the survey stated.

20.7 percent of these individuals in Trans Nzoia were involved in agriculture, 14.5 percent are employed while 17.7 percent have their own businesses.

28.5 percent were in casual labour and 18.6 percent are dependent, the survey showed.

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