Two-thirds of loans taken by families are spent on food and school fees

Shops are the preferred source of credit while it is most difficult to get a loan in Marsabit County

By JOSHUA MUTISYA

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Half of shopkeeper Peter Maina’s customers buy foodstuff and other household items from his shop on credit.

Mr Maina has four categories of customers who shop on loan. Customers, such as owners of food kiosks in Dandora where his shop is located, who buy items on credit which they pay for at the end of the day.

Others, mostly construction workers, settle their debts weekly when they get their wages. Families who live nearby foot their bills at the end of the month once they get paid while others request to be loaned items randomly.

Given that food takes up the lion’s share of household budgets, it is should not be surprising that it eats up much of the loans. For every Sh100 spent by Kenyans, Sh45 goes to food and drinks.

Mr Maina’s customers represent a large number of Kenyans who borrow money to make ends meet, painting a worrying picture of the tough economic times households are grappling with, reveals a review of loans and income data by Nation Newsplex.

Nationally, a third of households seek credit, a four percentage point increase from 2006, according to the Kenya Integrated Household Budget Survey 2015/2016. One in three shilling (39 per cent) borrowed by households is spent on basics such as food, toiletries and water. It is followed by school fees (21 per cent).