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January is tough but we can’t lend to you

After making merry and overspending during the festive season, a  majority of Nairobi residents are  now grappling with hard times in January.

Putting food on the table often depends on the relationship you have with the mama mboga next door, but hard times call for caution, even for these popular micro-lenders.

A recent survey by the Central Bank of Kenya and Financial Sector Deepening Trust showed that only six out of 100 Kenyans still secure credit from such sources.

Seven years ago, 24 out of 100 Kenyans relied on informal lenders including shopkeepers and mama mboga.

“I refrain from selling goods on credit,” said David Musyimi, who sells groceries at Vet area, Ngong Road.

“Unless I know you personally and you repay almost immediately, selling goods on credit is a risk I don’t like taking,” he added.

He said that buying the goods is expensive and so selling them on credit blindly could drive him out of business.

Tabitha Wangari, a trader in Ngong said that the poor credit history that most Nairobians have, has scared her from giving goods on credit.

“I have sold goods before on credit, and getting the people to repay proved really hard,” she said.

Out of business

Small-scale traders of farm produce buy goods on a daily basis. This has made them reluctant to selling goods on credit as they need fresh stock every day. The high cost of living has also made them not take financial risks that may bring down their businesses.

“Just because I own a kiosk does not mean that I am well off and not vulnerable to the problems that other Kenyans are facing,” Musyimi said.

“I am hard pressed with the rising cost of produce because of poor harvest experienced last year and the current dry weather,” he added.

With this, Nairobians may resort to trickier sources to survive January, which is hardly half-way through.