Two-thirds of full-time workers take up side hustles to survive

Tala General Manager, Annstella Mumbi addressing participants during the release of findings of the State of the Digital Credit Marketplace Survey conducted by Tala at Fairmont Norfolk Hotel in Nairobi on March 19, 2024. PHOTO | BONFACE BOGITA | NMG    

By PETER MBURU More by this Author

Two-thirds of Kenyans on permanent jobs are taking up side hustles to cope with the tough economic times, a new survey reveals.

The survey by digital credit firm, Tala shows that many workers are mainly resorting to side hustles such as farming and product resales to make extra coins.

“About two-thirds (64 percent) of those in full-time employment engage in other alternative income generating ventures – symbolic that the rising cost of living experienced over the last year has pushed them from their comfort zones to earn an extra shilling,” notes Tala’s Money March report.

The survey shows that farming has emerged as the biggest side hustle for Kenyans in full-time employment.

Read: Survey reveals Kenyans' savings pain

Other classes of workers chose to borrow funds to invest in businesses, with some taking up gigs that supplement their incomes.

The report, which sought to understand the impact of the cost of living and how credit is helping consumers navigate, notes that the number of workers seeking cash to invest in business has jumped to 50percent from 46 percent last year.

“Most loans are directed to business needs – more common among those whose main income is a full-time job compared to business owners,” the report notes.

It adds that among business owners, those borrowing to incur business expenses or add stocks have dropped from 41 percent last year, to 29 percent.

Overall, Kenyans borrowing from the digital platform for business expenses have reduced from 55 percent to 46 percent since last year, while those seeking capital or to add stock dropped from 35 percent to 31 percent, the report points out.

“The rising cost of living could have led to the closure of some businesses because of prioritisation of personal expenses over investing in business, hence the YoY (year-on-year) declining incidence of consumers with alternative income sources, now at 58 percent from 80 percent in 2022,” the report states.

Tala’s General Manager, Annstella Mumbi, notes that small businesses have particularly suffered cash flow challenges as high inflation has left many Kenyans with less disposable income to make purchases and are forced to scale down operations, or close shop.

Ms Mumbi also notes that among the lender’s almost 3.5 million borrowers, there is a shift in behaviour where more salaried people are taking up credit to invest.

“A lot of people taking loans are channelling them to businesses and they tend to have full-time jobs and are having side hustles at the same time. Although they have stable incomes, the cost of living has gone up and they need to bridge their income gap,” Ms Mumbi says.

Also read: Ipsos Survey: How 2023 will look like

Lenders, she observes, also prefer lending to people with salaries since they tend to be better at repaying, due to stable incomes, while business owners are considered riskier.

The report observes that overall, most Kenyans have had to cut down on expenses, work overtime or take additional jobs, take loans, use savings, or skip meals, to cope with the rising cost of living.

→ pmburu@ke.nationmedia.com