The counties of Marsabit, Garissa, Samburu, and Isiolo have the greatest rate of borrowers defaulting on loans, including shopkeepers and shylock dues.
Default rates in the four counties ranged from 47% to 74%, more than double the national average of 24%, according to a survey undertaken in part by the Central Bank of Kenya (CBK).
In results that attempt to impact lending habits by banks and digital lenders throughout Kenya’s 47 counties, Busia, Nandi, Siaya, and Nairobi had the lowest default levels.
Northern Kenya counties have been struck the hardest by drought in the last two years, affecting communities that rely on cattle as their primary source of income.
Consumers also defaulted on credit obtained from neighbourhood merchants and shylocks, as well as family and friends, despite the banking industry’s fast development, with default rates standing at 14% of acquired loans.
Approximately 41.8 per cent of those owing friends and relatives defaulted, while 40.6 per cent and 31.3 per cent of those owing merchants and shylocks, respectively, were unable to pay their obligations.
The four counties are among 11 classified by the National Drought Management Authority as experiencing acute drought and significant vegetative deficits, which have harmed cattle ranchers.Â
Kajiado, Kitui, Mandera, Laikipia, Tana River, Turkana, and Wajir are the others.
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