Kenyan households are facing growing financial challenges as income growth slows and digital fraud threats increase, forcing consumers to cut spending, seek extra sources of income and become more cautious about borrowing.
A new report by TransUnion shows that only 30% of Kenyan consumers reported an increase in income during the second quarter of 2026, down from 42% recorded during the same period last year.
The Q2 2026 Consumer Pulse Study, conducted between April 29 and May 19 among 462 Kenyan adults, found that reduced salaries, job losses and declining business activity were the leading causes of the slowdown. Reduced salaries accounted for 27% of the responses, job losses 24% and business closures or declining orders 23%.
Despite the pressure, 78% of consumers expected their income to rise over the next 12 months, although this was five percentage points lower than a year earlier. Gen Z consumers showed a notable decline in optimism as younger people continued to face employment and income challenges.
The study found that 61% of respondents could meet their bills and loan repayments, unchanged from last year. However, 54% of Gen Z respondents said they could not meet all their financial obligations, marking a seven-percentage-point increase.
To cope, half of those struggling to pay bills planned to make partial payments, while another 50% intended to take up gig work. More than a quarter planned to use savings or borrow from friends and family.
Consumers were also preparing to reduce spending, with 53% planning to cut discretionary expenses such as travel, dining and entertainment. Another 48% expected to delay major purchases, while 41% planned to spend more on bills and loan repayments.
“Consumers were diversifying their income sources, prioritizing essential expenses and making more careful financial decisions”. Said TransUnion Kenya Chief Executive Officer Morris Maina.
Access to credit also improved, with 40% of consumers saying they had sufficient access to loans and other credit products, up from 36% a year earlier. However, the proportion planning to apply for new credit or refinance existing loans fell to 57% from 69%.
Personal loans remained the most preferred borrowing option at 53%, followed by mobile loans at 45%. Meanwhile, 27% planned to use buy now, pay later services.
The report also highlighted growing digital security risks, with 77% of respondents saying they had been targeted by fraud attempts through emails, online platforms, phone calls or text messages in the previous three months.
Although 9% said they had fallen victim to digital fraud, down from 10% in the second quarter of 2025, Gen Z remained the most vulnerable age group, with 12% reporting losses to fraud schemes.
Among consumers notified of stolen identity or account details, 57% changed passwords on affected accounts, while 54% updated passwords across other accounts. TransUnion urged continued awareness and stronger fraud prevention as digital financial services expand.