Hospital bills are leaving a growing number of Kenyans struggling to keep up with loan repayments, prompting insurers and lenders to rethink how borrowers can be protected from unexpected medical expenses.
Industry players say the rising cost of treatment is becoming a major financial shock that is affecting households long after patients leave hospital.
Banks and insurance firms say more borrowers are turning to credit to settle medical bills, only to find themselves unable to continue servicing their loans once the financial pressure sets in.
The sector says serious illness is now emerging alongside death as one of the biggest factors affecting loan repayments, with healthcare costs placing a heavy burden on household incomes.
Medical fundraising has also become more common, with WhatsApp groups increasingly filled with appeals for contributions to help families raise money for treatment and emergency hospital bills.
According to Jubilee Health, more than one million Kenyans experience catastrophic health expenditure every year, forcing many households to depend on savings, loans or borrowed money to pay for medical care.
“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.
The growing concern comes as many Kenyans continue to face limited access to affordable and quality healthcare, while health insurance coverage remains low across the country.
Even as the government continues implementing Universal Health Coverage (UHC) reforms, the cost of treatment and access to essential medical services remain out of reach for many families.
Principal officer and insurance portfolio lead at Safaricom Bryan Nyutu said insurers must design products that meet customers' needs while remaining affordable.
“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.
Industry stakeholders said the rising cost of healthcare remains one of the biggest challenges because most Kenyans still pay directly for treatment due to low insurance coverage.
Figures from Amref Health Africa show that only about 19 per cent of Kenyans have health insurance, leaving the majority to meet medical expenses from their own pockets. The result is that many families are pushed into financial hardship after seeking treatment.
To address the challenge, Jubilee Health says it is partnering with global insurtech Bolttech to integrate health insurance into financial products. The approach will allow lenders and other businesses to offer health cover as part of services customers already use instead of selling insurance separately.
Bolttech Africa general manager Bente Krogmann said the company is creating embedded insurance solutions for institutions that provide microcredit, enabling borrowers admitted to hospital to receive support for medical expenses while keeping up with 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 will first allow lenders, retailers, digital marketplaces and other businesses to integrate health insurance into their digital platforms through application programming interfaces (APIs).
Jubilee Health says embedding insurance into lending and other daily financial services will help borrowers withstand unexpected medical expenses while reducing the risk of falling behind on their loan repayments.