More than half of Kenyan Gen Zs struggling to meet financial needs - Report

According to the latest report by credit reporting agency TransUnion Kenya, households are being forced to seek additional sources of income, adjust spending patterns and carefully manage debt commitments.

The report shows that financial constraints are more pronounced among the younger working population, with more than half of Gen Z consumers saying they are unable to meet their financial obligations.

The latest Consumer Pulse report by TransUnion comes amid accelerated inflation, which rose from 4.4 per cent in the first quarter to 6.4 per cent in the second quarter of 2026.

The increase was driven by high imported fuel prices, transport costs and global energy prices, which have eroded purchasing power and limited households' ability to rebuild savings.

The report indicates that households experienced a deterioration in their financial position in the second quarter of 2026, with only 30 per cent reporting an income increase over the three months. This represented a 12 per cent decline compared with a similar period last year.

Twenty-seven per cent of those surveyed said their income declines were primarily driven by reduced salaries, while another 24 per cent cited job losses. A further 23 per cent attributed the decline to business closures or reduced orders.

Additionally, optimism about future income among Kenyan consumers declined by five percentage points, from 83 per cent in 2025 to 78 per cent in the second quarter of 2026, with Gen Z consumers leading the decline in optimism.

The decline in optimism among Gen Z also points to a concerning trend, with the proportion of young consumers unable to meet their financial obligations increasing by seven percentage points to 54 per cent, reflecting mounting income and employment pressures.

To stay afloat, the report shows that more than half of consumers, or 53 per cent, planned to reduce discretionary spending, while 48 per cent intended to cut back on major purchases such as appliances and vehicles.

Forty per cent of Kenyan consumers also anticipated reducing their retail spending to cope with the economic pressures.

Despite easing interest rates in the country and improved access to credit, which increased from 36 per cent to 40 per cent year-on-year, only 32 per cent of consumers prioritised repaying their debt. This marked a decline from the 40 per cent recorded a year earlier.