The proportion of Kenya’s population with active financial savings dropped for the first time since 2009 to stand at 68.1 percent this year, a new study shows, breaking a 15-year growth trend on the back of biting economic hardships.
The savings rate has been on an upward trajectory since 2009 when it stood at 51.5 percent of the population, before jumping to 58.4 percent in 2013, and subsequently to 66.4 percent in 2016. The savings rate in the country stood at 69.9 percent and 74 percent in 2019 and 2021, respectively—marking a phase of steady growth over the years.
The latest findings of the Financial Access (FinAccess) Household Survey by the Central Bank of Kenya (CBK), the Kenya National Bureau of Statistics (KNBS) and the Financial Sector Deepening Trust (FSD) Kenya show that 90.5 percent of the respondents cited prevailing financial constraints as their main reason for halting savings. An estimated 18.2 percent of those polled cited loss of income for the ended savings.
Credit uptake, on the inverse, has been on a sustained growth curve since 2013 when it stood at 28.6 percent, eventually hitting 64 percent in 2024 which marked a jump from 60.8 percent in 2021.
The household survey indicates that the country’s savings culture is primarily driven by immediate needs, with a strong emphasis on day-to-day expenses.
“The majority, 35.6 percent, save for day-to-day needs, followed by 27.7 percent who save for emergencies. Education needs accounted for 9.9 percent of savings, while 12.6 percent save for retirement,” reads the report.
“Business-related savings were reported by 8.1 percent, while 10.1 percent saved simply for safekeeping. A smaller portion, 4.1 percent, save with the goal of purchasing land or property, or for house improvement.”
According to the findings, formal institutions are the preferred means for savings and loans in Kenya, with 51.9 percent of Kenyans saving and 46.3 percent borrowing through formal channels.
Women are more likely to use informal savings avenues at 29.5 percent compared to men who make up 17.3 percent, in a trend attributed to women’s rampant involvement in informal financial networks such as savings groups commonly known as chamas which offer enhanced flexibility and social support.
The FinAccess findings rhyme with the latest data from the Sacco Societies Regulatory Authority (Sasra) which in September revealed that the number of dormant members in savings and credit cooperative societies (Saccos) grew 18.6 percent to 1.45 million during the year ended December, on the back of deeper job cuts and squeezed pay in Kenya’s softening economy.
The data showed that 226,893 members in deposit-taking and non-withdrawable deposit-taking saccos became dormant last year, adding to the 1.22 million that a year earlier failed to contribute or borrow on their accounts.
