Nairobi — Marsabit, Garissa, and Samburu counties recorded the highest level of debt distress in 2021 attributed to climate-related shocks in the areas, a new survey shows.
According to the FinAccess Household Survey, County Perspective, the counties had default rates of 74 per cent, 59 per cent, and 58 per cent among the adult population, respectively.
“This may be explained by the climate-related shock of drought facing these counties that has reduced the ability of borrowers to repay their loans,” the survey noted.
On the other hand, Busia, Nandi, and Siaya recorded the lowest incidence of loan defaults all recording below 5 per cent among the adult population of reported defaults.
The survey shows that Nakuru, Busia, and Siaya Counties recorded the highest cases of gambling at 26 per cent, 22 per cent, and 19 per cent, respectively, above the national average of 11 percent.
On financial literacy, Nakuru was among the counties with the highest financial literacy levels of 67 percent proxied by the ability of the respondents to calculate the cost of interest on a loan, and just below Nairobi and Bomet counties at 70 percent
Counties of Nairobi, Nyeri, Kirinyaga, Murang’a, and Kiambu were the only ones with a high adult population included in formal financial services, with rates above 90 per cent.
On the lower end of the pyramid, are West Pokot, Turkana, Garissa, and Narok Counties, with inclusion rates of below 61 percent, compared to the national average of 84 percent, the survey shows.
Further, the survey showed that the usage dimension that focuses on the regularity and frequency of using financial services at the county level indicates that Nairobi, Mombasa, Kiambu, and Kisumu have the highest level of utilization of banking services providers while Garissa, Tana River, and Marsabit fall on the other side of the pyramid.
Compared to other counties, Machakos county reported the highest usage of Insurance services (mainly driven by the National Hospital Insurance Fund) rate of 51 per cent, twice the reported national average of 25 percent.
Of interest is also the frequency and regular use of pension services and products by county, where Lamu, Trans Nzoia, Makueni and Taita Taveta had the highest rates, above the national average of 11 percent