Kenya's health care burden is driving many people to borrowing and in-turn contributing to high loan defaults, according to insurance and banking experts
According to insurance firms and lending institutions, the high medical expenses could easily derail clients' ability to service credit.
Concerned insurers and lenders now exploring new ways of shielding clients saying severe health-related costs are increasingly disrupting borrowers' finances.
Medical emergencies has now joined loss of life as a major reason for struggling to
repay loans.
They noted that medical bills fundraising calls are now a common feature in many WhatsApp groups alongside posts asking for contributions to paybills for a needy case or emergencies.
According to Jubilee Health, more than one million Kenyans experience catastrophic health expenditure every year, forcing many households to rely on savings, borrowing or credit to pay hospital bills.
"We are seeing that in the past, the biggest disruption to paying back your credit was loss of life. But now catastrophic health expenditure begins to be a factor," said Jubilee Health chief executive officer Njeri Jomo said.
Low insurance coverage and access to affordable, quality healthcare remains a major concern in Kenya, where many citizens face significant financial barriers to receiving essential medical services.
Despite the government's commitment to Universal Health Coverage (UHC) and ongoing reforms, affordability and accessibility continue to hinder the realization of equitable healthcare for all.
Principal officer and insurance portfolio lead at Safaricom Bryan Nyutu called for the need for products that are not only of high quality but also affordable, highlighting the delicate balance between maintaining standards and ensuring accessibility for the average Kenyan.
"You must have sufficient data for that customer for you to understand them get their right product, find them in the right place and look at their affordability," said Nyutu
According to the stakeholders one of the key challenges is the rising cost of healthcare services, which many Kenyans must pay out-of-pocket due to limited health insurance coverage.
With only about 19 per cent of the population insured, according to Amref Health Africa, a vast majority rely on direct payments at the point of service, which often leads to high health expenditures, pushing families deeper into poverty.
In an effort to tame the trend, the insurer now says it is working with global insurtech Bolttech to embed health insurance into financial products, allowing lenders and other businesses to offer cover as part of their existing customer journeys rather than as a separate purchase.
Bolttech Africa general manager Bente Krogmann said the insurer is developing embedded insurance solutions for institutions that provide microcredit, enabling borrowers who are hospitalised to receive financial support for medical expenses without disrupting their loan repayments.
"There is a lot we can learn from Southeast Asia, where some of the biggest successes in embedded insurance have been in health. The key lesson is that protection can be embedded into almost any everyday transaction, the goal is to meet people where they are with simple, relevant products that can be explained and accessed seamlessly," said Krogmann.
The partnership with bolttech will initially enable businesses to including lenders, retailers, digital marketplaces and other service providers to integrate health insurance directly into their digital platforms through application programming interfaces (APIs).
The insurer said embedding insurance into lending and other everyday financial services could improve financial resilience by cushioning borrowers against unexpected medical costs while reducing credit risk for lenders.
The move comes as insurers seek new distribution channels beyond traditional corporate health cover, targeting retail customers and the millions of East Africans who remain uninsured. Jubilee estimates the region has a potential health insurance market of about 200 million people, but fewer than two million are currently covered.
