Survey reveals Kenyans’ savings pain

 

About a third of Kenyans would exhaust their savings within a month of losing regular income with more finding it impossible to save in the difficult economic times.

This is based on a survey by digital lending firm Tala that shows while 33 percent of its digital loan customers indicate they would be unable to stretch their savings beyond a month, those saving regularly are reducing.

In its Money March report, Tala noted that 13 percent of its survey respondents indicated they would exhaust their savings within a week, and 43 percent between a month and six months.

“About a third (33 percent) of consumers would struggle to stretch their savings beyond a month if worst came to worst — consumers are generally not capable of saving more than a month’s equivalent of their expenditure,” the report notes.

Read: Survival of the fittest for Kenyans amid prices pain

Those who would exhaust their savings within a week increased from seven percent in March last year to 13 percent in the review period.

The report observes that Kenyans with the ability to save money that would sustain them beyond six months have come down from 23 percent in 2022 to 17 percent this year.

The report sought to understand the impact of the cost of living on Kenyans and how they are using credit in the wake of hard economic times. It was compiled based on responses from slightly more than 1,400 Kenyans.

“Customers are struggling, it’s still a very tough time for Kenyans. For the first time we are seeing a declining proportion of customers who are in full-time employment,” said Annstella Mumbi, Tala’s general manager.

The Money March report notes that Kenyans indicating they have been saving regularly have come down to 35 percent from 49 percent last year.

Those who save when they have money left over after expenses increased from 36 percent to 42 percent over the same period.

The report, however, observes that more Kenyans (75 percent) remain optimistic that their financial situation will improve in the next six months, with some 12 percent expecting the situation to worsen.

Most Kenyans cited the high cost of living that has raised their expenses beyond their incomes. Seasonal expenses such as school fees, income delays and slow business are some of the biggest financial challenges they experienced in the last six months.

“With about 7 in 10 of consumers claiming that their financial situation has not improved, this points to the conclusion that they are generally going through several financial challenges, top of which is ‘cost of living expenses’,” the report states.

BY BUSINESS DAILY