Nairobi — 85 percent of Kenyan consumers are confident that their incomes incomes will grow next year due to enhanced debt management, according to a recent study by TransUnion.
The latest ‘Consumer Pulse Study’ revealed Kenyan households experienced a modest financial rebound in the second quarter of 2024, largely driven by new business ventures, enhanced debt management, and less impact from job losses.
According to the study, 34 percent of consumers saw an increase in income in the last three months, led by gains among Generation Z (aged 18-26 years) and Millennials (aged 27-42 years).
“The possible easing of inflationary pressures in the near future may lead to growth in disposable income, which could in turn support household consumption in 2024,” the study revealed.
“This may be especially true if the expected income increases come to bear and consumers see fit to increase their discretionary spending, and reinstate the digital services, memberships and subscriptions that were cancelled during the quarter.”
36 percent of consumers, however, reported a decrease in income over the last three months, with high optimism about future income, with 85 percent of consumers expecting an increase over the next 12 months.
Over the period under review, consumers cut back on non-essential expenditure, with 56 percent of households, particularly Gen X aged 43-58 years, reporting reduced discretionary spending.
Across all generations, 49 percent of consumers are expecting to reduce discretionary spending in the next three months, while 42 percent anticipate cutting back on large purchases like appliances and vehicles.
Nonetheless, consumers plan to direct their increased disposable income towards retirement funds at 48 percent, bills and loans at 41 percent, and digital services at 38 percent.
The study showed that consumers’ ability to pay their bills in full increased significantly, with 64 percent stating that they would be able to handle their bills in the second quarter of 2024, while those unable to pay decreased by six percentage points to 36 percent compared to the same period last year.
“Kenyan consumers have been resolute in tackling their outstanding debts.51 percent opted to pay partial amounts if they were unable to settle them in full, and one-third representing 33 percent of consumers are prepared to utilise savings to service their debt,” the report concluded.
