Business ownership in Kenya grows by 7% as full-time employment declines - Report

The Tala MoneyMarch 2025 report highlights that both full-time and part-time employees are engaging in fewer income-generating ventures, as rising living costs limit the funds typically invested in side hustles.

The report also underscores the persistent impact of the high cost of living. Compared to 2023 and 2024, financial strain remains a dominant concern, with 9 in 10 Kenyans surveyed reporting economic challenges over the past six months.

Additionally, 32% of respondents admitted to feeling stressed about their financial situation.

Despite these financial pressures, optimism about personal financial well-being remains strong. Nearly 46% of those surveyed expressed confidence in their financial future, showcasing the resilience of Kenyans.

During the report’s launch event, Tala-Kenya General Manager Annstella Mumbi emphasized the importance of financial inclusion, stating, “Financial empowerment is not reserved for the privileged few; it is a right that belongs to all of us. Whether you are a student, an entrepreneur, a business owner, or someone seeking a fresh financial start, this campaign is for you.”

Delivering the keynote address, Boniface Kamiti, Manager of Consumer Protection at the Competition Authority of Kenya, urged digital credit providers to view themselves as more than just lenders.

“We encourage all digital credit providers, whether present today or not, to see their role as partners in the financial well-being of their customers. Investing in customer education will help borrowers understand responsible credit use and build a more secure financial future,” he said.

The report also indicates that over one-third of Kenyans have increased their borrowing, a trend linked to rising living expenses and delayed income. The primary reasons for borrowing include business expenses, education, and daily necessities. Encouragingly, about 80% of borrowers remain confident in their ability to repay their loans.

Notably, 52% of Kenyans now prefer to stick with a single lender, whether a licensed Digital Credit Provider (DCP) or a traditional bank, reflecting a shift towards long-term financial relationships.

Looking ahead, business and home ownership emerged as top financial aspirations for Kenyans over the next five years. Many respondents reported setting aside 11–20% of their income for investments, primarily in savings, SACCOs, and chamas. The main motivations behind these investments include wealth accumulation, business expansion, and retirement planning.

However, the report also highlights key barriers to greater investment, including fear of financial loss and a lack of trust in investment platforms.