October 21, 2015
The Informal Lending Habits Study by Kasi Insight delves into the dynamics of informal lending practices in Kenya, Ghana, and Cameroon. Conducted via an online survey, the report focuses on consumer behavior and attitudes toward lending, borrowing, and payment preferences.
The study provides valuable insights into the informal lending landscape, emphasizing the social aspect of lending and varying preferences across the three countries. It highlights Kenya's more developed lending ecosystem and lower default rates, potentially indicating a safer lending environment. However, it's crucial to note that the findings reflect internet-using respondents and may not represent the entire population. Nonetheless, this study lays the groundwork for understanding informal lending dynamics in these African nations.
Liquidity and Lending Frequency: Nearly 90% of respondents lent money in the past three months. Kenya emerged as the most active lending country, while Ghana displayed lower lending rates compared to Cameroon and Kenya.
Loan Characteristics: The majority of loans were small credits, with specific amounts prevalent in each country (300 GHS in Ghana, <10K FCFA in Cameroon). Short-term loans (1-3 months) dominated lending patterns.
Recipient Preferences: Loans predominantly went to friends and family, with variations across countries. Ghana leaned toward family, while Cameroon showed a preference for friends.
Interest and Guarantees: Lending primarily emerged as a social engagement rather than a business decision, with minimal inclusion of interest and guarantees in most cases.
Loan Sources and Usage: Kenya showcased a more mature lending ecosystem, preferring banks for loans, while Ghanaians leaned toward family. Most lenders were aware of the loan's intended use.
Bank Loan Requests and Timely Repayments: A majority of respondents had never requested a bank loan, with Ghana experiencing higher default rates compared to Cameroon and Kenya, suggesting a safer lending environment in Kenya.
Kasi Insight Research intelligence data featured in this report draws from three surveys fielded May and September 2015, among 2,185 adult urban dwellers, including 596 from Cameroon, 754 from Kenya and 835 from Ghana.
All survey interviews were conducted online, and the data was unweighted and insights gathered from internet-using respondents reflect claimed behavior rather than actual metered data. Top-line results from the surveys have a margin of error of +/-2.04 percentage point.