Africa’s monetary panorama is complicated, comprising a variety of financial elements. To higher grasp this panorama, GeoPoll performed a speedy survey of Ghanaians’ and Kenyans’ borrowing habits and debt dynamics.
In this report, we are going to share the insights we’ve gained from the examine performed in January 2024 within the two international locations, providing a glimpse into Africans’ monetary behaviour relating to loans and debt.
The survey addressed a number of urgent subjects, together with:
- Present monetary state of affairs
- Family earnings
- Financial training and literacy
- Well-liked lenders
- Challenges skilled whereas accessing loans/credit score
- Mortgage reimbursement
- Strategies used to handle and scale back money owed
Present monetary state of affairs
In October 2022 GeoPoll surveyed Latin America and the Caribbean, Africa, the Center East, and Asia on the World Value of Residing Disaster. A part of the findings indicated that rising costs have impacted virtually everybody. 75% say costs have “elevated rather a lot,” decreasing their household’s way of life.
Two years on, the identical sentiments persists when people had been questioned about their present monetary standing. The biggest phase, comprising 37.87% of respondents, characterised their state of affairs as neither good nor dangerous. Subsequently, 22.26% reported their monetary situation as dangerous, whereas an in depth 21.37% expressed a constructive outlook, saying it was good. Notably, 10.63% conveyed that their monetary state of affairs was horrible.
Employment Price
Based on Statista, the unemployment charge in Africa is predicted to succeed in seven p.c in 2024. Within the interval underneath overview, unemployment within the continent peaked at 7.2% in 2021. Unemployment ranges different considerably throughout African international locations. South Africa was estimated to register the very best charge in 2024.
In Kenya, our survey findings point out that 42.42% of the respondents are unemployed, 35.55% are employed, and 22.04% personal their very own companies. Ghana stands out with a extra favorable employment state of affairs, with 50.22% stating they’re employed, 40.61% are unemployed, and 9.17% personal a enterprise.
Family Revenue
Based on the World Financial institution virtually 700 million individuals around the globe dwell immediately in excessive poverty – they subsist on lower than $2.15 per day, the acute poverty line. Simply over half of those individuals dwell in Sub-Saharan Africa.
A important proportion of respondents in Kenya, totaling 40.79%, obtain a month-to-month earnings throughout the vary of Kes. 10,000 ($61) to Kes. 50,000 ($305). Shut behind, 36.81% earn lower than Kes. 10,000 ($61). Moreover, 13.67% report earnings between Kes. 50,000 ($305) and Kes. 100,000 ($610), whereas 5.97% fall into the earnings bracket of Ke. 100,000 ($610) to Kes. 200,000 ($1,219). Lastly, a modest 2.75% signifies incomes greater than Kes. 200,000 ($1,219).
A definite development emerges in Ghana, the place 49.34% of respondents earn a month-to-month wage of 1000 Ghana Cedis ($80). Following intently, 37.55% fall into the earnings vary of 10,000 Cedis ($800) to 50,000 Cedis ($4,000), with a mere 1.75% indicating an earnings exceeding 20,000 Cedis ($1,600).
Monetary Information
When requested how assured they really feel about their understanding of economic ideas, together with loans and rates of interest, the bulk, comprising 35.56%, expressed confidence of their monetary literacy. One other 31.21% really feel impartial, whereas 20.54% convey excessive belief. Curiously, 12.7% acknowledge a insecurity of their monetary information.
Borrowing Patterns Throughout Areas
Respondents from the 2 international locations exhibited distinct borrowing patterns. A big 80.24% have beforehand borrowed loans or incurred debt, whereas 19.76% have by no means sought a mortgage or debt.
We delved into discovering the first selections utilized by individuals to borrow. Household or Mates emerged as essentially the most favored choice, with 26.15%, intently adopted by cash lenders at 25.78%. Moreover, 24.97% desire conventional banks, 16.28% go for credit score unions or SACCOS, and 6.81% lean in the direction of different authorized means.
Accessing of loans/credit score
With a major majority, 77.16%, expressing challenges in accessing loans, we delved into the explanations behind these difficulties. Among the many respondents, 27.45% attributed their challenges to insufficient mortgage quantities, 18.77% lamented the prolonged and difficult software course of, and 18.36% cited a poor credit score historical past for mortgage denials. Collateral necessities had been recognized by 18.34% as a hindrance, and 11.44% pointed to their excessive debt ranges as contributing to their mortgage entry challenges.
Use of Loans
The survey highlighted the varied functions for which Africans search loans. Schooling is the predominant goal, with 40.17% using loans to help their research. Medical wants comply with intently at 20.59%, whereas 17.53% safe loans for house or mortgage functions. One other 12.05% search monetary help for private pursuits, 4.87% for leisure functions, and, lastly, 4.80% particularly for auto or automotive loans.
Debt Administration
With 81.12% of respondents acknowledging challenges in repaying loans or money owed, we additionally explored the methods employed by people to handle or alleviate their monetary burdens. Notably, 29.77% of respondents undertake budgeting as a method of debt administration, whereas 29.09% decide to cut back their bills. Moreover, 16.67% search to reinforce their earnings by exploring further sources, 16.24% prioritize their money owed, and 6.45% negotiate with lenders or collectors.
What’s subsequent?
As we embark on the brand new yr, monetary issues take centre stage for a lot of people as they strategize round their targets and aspirations. Based on The Ascent, 82% of millennials and 74% of Gen Zers intend to determine monetary targets for the approaching yr, surpassing the figures for Gen Xers at 69% and child boomers at 49%.
When questioned about their monetary outlook for the brand new yr, a major majority, 73.40%, specific optimism that their monetary state of affairs will enhance, in the meantime, 19.06% anticipate their monetary standing to stay unchanged, and seven.55% suppose they are going to be worse off.
Methodology/About this Survey
This Unique Dipstick Survey was run by way of the GeoPoll cell software in January 2024 in Ghana and Kenya. The pattern dimension was 3,290, composed of random customers between ages 18 and 60. Being an app survey, the pattern was skewed in the direction of youthful age teams, males, and concrete dwellers.
To get extra particulars about unique GeoPoll surveys or to conduct a scientific examine on funds or different subjects in Africa, Asia, and Latin America, please contact us.
