77% of Kenyans targeted by digital fraud as income growth slows, report shows

The findings highlight the growing risks facing consumers as digital financial services become more widely used/AI ILLUSTRATION

Nearly eight in 10 Kenyan consumers reported being targeted by digital fraud in the three months to May 2026, even as fewer households recorded income growth and financial pressures mounted, a new report shows.

The Consumer Pulse Study for the second quarter of 2026 by TransUnion found that 68 per cent of respondents encountered fraud attempts but avoided becoming victims, while another nine per cent were targeted and lost out to fraudsters.

The findings highlight the growing risks facing consumers as digital financial services become more widely used, alongside mounting pressure on household budgets.

Smishing, vishing and phishing emerged as the most common fraud schemes. Smishing, which involves fraudulent text messages designed to obtain personal information, was reported by 41 per cent of consumers. Vishing, involving fraudulent phone calls, affected 40 per cent, while phishing through emails, websites, social media posts and QR codes was reported by 39 per cent.

The report also found that 23 per cent of respondents were unaware of any fraud attempts directed at them.

Despite the high number of reported attempts, most consumers who encountered fraud avoided becoming victims. The share who successfully avoided fraud attempts, however, declined from 71 per cent in the second quarter of 2025 to 68 per cent in the latest survey.

The proportion who fell victim to fraud improved slightly, dropping from 10 per cent to nine per cent over the same period. Gen Z consumers remained particularly vulnerable, with 12 per cent reporting that they had been victimised.

Consumers strengthen digital security

The report found that many Kenyans were taking steps to protect their personal information and online accounts, although some remained unsure how to respond to cybersecurity threats.

Among consumers notified that their personal information or online account details had been compromised, 57 per cent changed the password on the affected account, while 54 per cent updated passwords on other accounts. Another 46 per cent checked their accounts for unauthorised activity.

More broadly, 72 per cent of consumers had changed their passwords as a precaution during the 60 days preceding the survey. Half had enabled passwordless login options or multi-factor authentication, while 36 per cent had checked their credit reports for possible fraudulent activity.

However, a significant minority had taken no action to improve their cybersecurity.

Among those who did nothing, 58 per cent said they were unsure what steps to take, while 27 per cent felt overwhelmed by information about cybersecurity concerns. A further 23 per cent said they were unwilling to spend money on cybersecurity or identity protection services.

The findings point to a gap between awareness of digital fraud and consumers’ ability or willingness to take practical steps to protect themselves.

Digital engagement continued to increase, with 46 per cent of consumers conducting at least half of their transactions online, up two percentage points from a year earlier. Confidence in artificial intelligence also remained high, with 64 per cent believing it would have a positive long-term impact on their lives.

Income growth slows as household budgets tighten

Beyond digital fraud, the study found that Kenyan households faced mounting financial pressure, with fewer consumers reporting income increases and declining optimism about future earnings.

Only 30 per cent of households reported an income increase in the three months preceding the survey, down 12 percentage points from the same period in 2025.

The decline was mainly attributed to reduced salaries, job losses and weaker business activity. Reduced salaries were cited by 27 per cent of respondents, job losses by 24 per cent, while business closures or declining orders accounted for 23 per cent.

Expectations about future earnings also weakened. Although 78 per cent of consumers expected their income to increase over the following 12 months, this was five percentage points lower than a year earlier. Optimism declined most notably among Gen Z respondents.

The share of consumers able to pay their bills and loans in full remained at 61 per cent. However, the proportion of Gen Z consumers unable to meet their financial obligations rose by seven percentage points to 54 per cent, reflecting the pressures facing younger households.

Consumers have responded by cutting spending and seeking additional sources of income.

Among those unable to meet their bills and loan repayments in full, half planned to make partial payments, while another 50 per cent intended to supplement their earnings through temporary or gig work. A further 28 per cent planned to use savings or borrow from friends and family.

The pressure has also affected household spending decisions. More than half of consumers, at 55 per cent, reduced discretionary spending in the previous quarter. These cuts included expenses such as dining out, travel and entertainment.

Another 36 per cent cancelled or reduced digital services, including wireless, cable television and internet subscriptions, to preserve cash.

Looking ahead, 53 per cent expected to reduce discretionary spending, while 48 per cent planned to cut back on major purchases such as appliances and vehicles. Another 40 per cent anticipated reducing retail spending.

The report also found that only 36 per cent of households increased their emergency savings, down from 46 per cent in the second quarter of 2025. The proportion prioritising faster debt repayment fell to 32 per cent from 40 per cent a year earlier.

The findings come amid rising inflation, which increased from 4.4 per cent in the first quarter to 6.4 per cent in the second quarter of 2026, according to the report. Higher imported fuel prices, transport costs and global energy prices were cited as factors eroding consumers’ purchasing power.

Credit access improves, but borrowing remains costly

Despite the pressure on household finances, the report found that access to credit remained important to consumers.

Although 73 per cent regarded access to credit as very important, only 40 per cent believed they had sufficient access, an improvement from 36 per cent a year earlier.

However, demand for new credit weakened. The share of consumers expecting to apply for new credit or refinance existing facilities over the following 12 months dropped to 57 per cent from 69 per cent in the second quarter of 2025.

Personal loans remained the preferred borrowing option, with 53 per cent of prospective applicants planning to use them. Interest in mobile loans increased to 45 per cent, while 27 per cent planned to use buy now, pay later services.

The high cost of borrowing remained the main obstacle. Among consumers who abandoned plans to apply for credit or refinance existing facilities, 41 per cent said the cost was too high.