According to a report by Old Mutual Group, the top reasons Kenyans are saving money are for children's education, start-up capital and emergency expenses.
These are followed by savings for real estate (better housing), business expansion, and a cushion for the family in case the breadwinner dies.
Up to 40 per cent of Kenyans are putting their savings toward their children's education, according to a survey called the Old Mutual Financial Services Monitor (OMFSM), which provides comprehensive insight into Kenya's financial landscape.
About 30 percent of my savings is for starting my own business, and 26 percent is for emergency expenses.
According to the report, the least common saving purposes include saving for Christmas, buying specific items, and buying weddings and funerals, at 2% to 1%.
This is because up to 90% (of Kenyans) are said to have no confidence in their retirement savings, and while many rely on raising their children, they do not expect the government to take care of them. This was done amid alarming numbers that some people are considering.
According to the report, more than 50% of Kenyans run small businesses, and 22% are “polyjobbers” (a term used to describe people who earn extra income alongside their day job), demonstrating a strong hustle mentality. ing.
But when it comes to retirement, only 26 percent of respondents say they are currently actively saving for retirement (the lowest of any market surveyed).
According to Old Mutual, nearly 90% of Kenyans are unsure whether they have enough retirement savings.
“Instead, many rely on the hope that their children will support them in old age, and only a minority count on government assistance,” the report says.
The report is based on direct interviews with people from different parts of the country.
The target population was people in both the informal and formal sectors in urban and peri-urban areas with a monthly income of Sh12,000 or more.
The report highlights that Kenyans' top economic priorities are income security, spending cuts and debt repayment.
The study revealed a significant prevalence of personal debt in the country. Nearly seven in 10 consumers use some form of personal loan, higher than other markets surveyed across the continent (Ghana, Namibia, South Africa).
High cost of living and limited disposable income are believed to be major obstacles to saving.
Nearly half of Kenyan consumers are under significant financial stress, with only one in 10 earning more than they did before COVID-19, the report shows.
