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Why more Kenyans are shifting to owning business
Tala User Research Manager Teddy Kahiro addressing participants during release findings of the State of the Digital Credit Marketplace Survey conducted by Tala at Fairmont Norfolk Hotel in Nairobi on March 19, 2024.Â
More Kenyans are turning to entrepreneurship amid instability in formal jobs, a new survey has shown, signalling survival moves in an economy where households are feeling the negative impact of the high cost of living and increased statutory deductions.
A newly launched 2025 Money March report by digital lender Tala shows that full-time employment fell from 57 percent in 2023 to 55 percent in 2024 and 50 percent in 2025 while entrepreneurship rose from 19 percent in 2024 to 26 percent in 2025.
“Fulltime employment is declining, while business ownership is on the rise,” said Teddy Kahiro, country manager for user research at Tala.
Business ownership increased by seven percentage points in 2025, while full-time employment as the main source of income declined by five points year-on-year.
The report shows that the percentage of employed Kenyans with side hustles fell from 40 percent in 2023 to 35 percent in 2024 and to 20 percent in 2025.
“However fewer workers are engaging in side hustles, signaling financial constraints in diversifying income streams.”
Mr Kahiro told the Business Daily that the decline in employment in favour of owing businesses could result in job industry instability.
“There is a decline in terms of full employment in Kenya and a rise in business and that’s a worry because we question job stability,” added Mr Kahiro.
“We’ve also seen the number of side hustles among the employed has reduced meaning people are holding money in a bid to reserve it for future.”
The report which sampled viewers from close to 1,000 Kenyans sought to understand how consumers earn, spend, save, borrow, and invest amid rising living costs and shifting financial behaviors.
About a third (30 percent) of Kenyans surveyed with full-time job said they had no side hustles, a rise from 20 percent last year.
The report further highlights that 92 percent of Kenyans noted the high cost of living has affected their household budgets and are cutting back on non-essentials while struggling to meet financial goals.
After spending on basic needs 57 percent of Kenyans have nothing left from their salaries, implying they live paycheck to paycheck.
The Money March report shows that 51 percent are coping with the high cost of living by starting a business while 46 percent are taking out loans; 38 percent from digital lenders and 8 percent from banks.
Some 59 percent of respondents say they have cut back on expenses.
“Over a third of consumers have increased borrowing. Loans are mainly used for business expenses, education (school fees), and daily expenses in an attempt to manage the rising cost of living,” added Tala in the Money March report.
