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Ways to avoid debt webs

Maya Hayakawa 

Borrowing money has never been easier in this digital age. Today accessing a short-term loan is as easy as a touch of a button. With one click, you can now access anything from Sh100 to millions of shillings. Many assume that debt is only dangerous when it is in large amounts.

However, the truth is, borrowing small amounts can be just as dangerous.  One must be careful not to develop an addiction out of it in order to stay in control of their finances. Here are a few tips on the do’s and dont’s of digital credit.



This is rule number one. If you can in any way avoid borrowing money, this would be the best choice. However, if you are unable, and must borrow, do make sure you pay back what you owe within the stipulated time. You need to plan yourself financially well in advance. If it means adjusting your next month’s budget to accommodate the extra expense then do so. Paying on time is important because it helps build your credit score. Having a good credit score is an indication that your finances are healthy, and most platforms increase your credit limit and reduce interest rates. Pay on time, and everyone is happy.


Borrow only if you absolutely must. Are you borrowing to buy a new pair of shoes, or perhaps so you can eat at that new restaurant everyone is talking about? If you are borrowing to meet your day-to-day expenses this is a clear sign that you are either not managing your finances well, or living beyond your means.

Prioritise what is important and borrow only for what is critical, perhaps only during emergency situations, or when you have no other alternative. If it is not a priority or emergency, then consider shelving it until when you are a bit financially stable.


It is important to live within your means. This requires you to be extremely honest about your financial situation. Often times we find there is a huge discrepancy between how much we earn and how much we want to earn. See how much you spend on a daily basis and measure it against the earnings.

If you find there is a gap, you need to either adjust your expenses by seeing what you can cut down, or find a way to increase your income to meet the needs. Borrowing money often is a sign that you are living way beyond your means, so if you are borrowing more often than not, then you need to watch out.


Establishing an emergency fund is often considered to be one of the most important steps towards taking control of finances. Having the fund could come in handy in helping weather through a financial crisis, rather than having to borrow.

Don’t wait for an emergency for you to start building such a fund.  An emergency fund could be the defining factor that stops you from being driven into debt.


Borrowing online is not the only option that you have. There are several ways that you can get some cash to help you get out of a financial fix. You could consider taking out a loan from a friend or family member.

This mode of borrowing might have an added advantage in terms of repayment plans and it could be a little bit more flexible than an online platform.

In the event you resort to getting a loan online, look at different platforms and what they offer. Choose what suits your needs best and make sure you understand fully how the service works to avoid any mishaps along the way.



A survey conducted by the Kenya National Bureau of Statistic showed that 14 per cent of the respondents were repaying multiple loans from more than one provider at the time of the survey. This translates to 800,000 Kenyans who are juggling multiple loans.

For one this isn’t good for your credit score. It gives an indication that you are not good at managing your finances and that definitely is not an impression you want to leave.

You also don’t want to spread yourself out too thin. Servicing one loan is already challenging enough, are you sure that you want to add a couple more to that? This could be a disaster waiting to happen; I would avoid it all together.


People borrow money for various reasons. Some are for understandable reasons, while others are pure mistakes like borrowing to refinance a debt. When you borrow money to refinance a debt, you are going deeper into debt. You are basically paying another creditor just to keep up with your dues.

Keep yourself in this vicious cycle, and you will find yourself trapped in debt and piling interest charges and losing out on money that could have gone to your savings. Clear pending debt before taking out a new one.


Savings are there for a purpose. They are there to help meet financial goals. It is important to stick to your plan, if you really want to have whatever it is that you’re saving for. Know that every time you dig into your savings to pay off a debt, you are eating into the funds for whatever you were saving for, and therefore could derail your plans in making it happen.


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