Broke millennials embark on borrowing spree to survive, survey finds

64% of millennials in Kenya have reported an increase in their borrowing in order to maintain their lifestyle amid job cuts and lost income triggered by the COVID-19 pandemic.

A survey by Standard Chartered Bank further reveals that 88% of Kenyan millennials aged between 25-44 have found managing their fiancés more difficult since the start of the COVID-19 outbreak in March this year compared to 64% globally.

Official statistics indicate that at least 1.7 million Kenyans, majority of who are in the mentioned age group have lost their jobs with the number set to increase as the global health pandemic rages on.

However, according to StanChart Head of Retail Banking, Edith Chumba, despite significant economic challenges caused by the high rate of unemployment which has been worsened by the COVID-19 pandemic, millennials were – as observed from the poll, more likely than the older generations to be in active pursuit of long-term goals.

“33% of millennials in Kenya are saving for a major purchase such as a new car or home, compared to 23% of those over 45 whilst another 38% of millennials are actively trying to invest better, compared to 31% of those over 45,” said Chumba.

The survey also suggests that 93% of respondents say they want to be better at managing their finances with more than one-third saying they have become more confident they can reach their long-term goals, partly due to their uptake of digital money management tools.

“Millennials in Kenya want to better track and budget their spending (60%); 71% want to alter their daily spending; and 21% have started using a new money management or budgeting app since the pandemic began, with 81% of those who haven’t yet embraced these digital tools planning to do so in the next three years,” Chumba added.

Depleted income among the group has similarly seen 75% of respondents resort to using money management tools and apps for the first time since the onset of the pandemic.

According to StanChart, should the state issue Kshs 146,000 in relief to individuals without conditions, then 55% of people would use the money to cover existing spending commitments such as housing, food, and transport, while only 3% would spend the money on a holiday, either foreign or within Kenya.

The survey conducted between 25th September and 1st October 2020 covered 12,000 adults in 12 markets; Hong Kong, India, Indonesia, Kenya, Mainland China, Malaysia, Pakistan, Singapore, Taiwan, UAE, the UK and the US.

  

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