The report which points to deteriorating financial health among Kenyans against an increase in the uptake of formal financial services shows only 45 per cent of individuals are balancing income and expenses every day.
According to the report, while financial inclusion has hit a high 83.7 per cent as of 2021 from 75.3 per cent in 2016, financial health has hit a low 17.1 per cent from 39.4 percent in the same period.
Only three of 10 Kenyans or 28.3 per cent are able to cope with emergency spending needs while only four in 10 Kenyans have the ability to make future investments.
The report describes financial health as the extent to which someone is able to meet all their current commitments and needs and have the resilience to maintain this in the future.
Further, the report breaks down factors related to Kenyans ill-health including costly banking and digital payments, lack of knowledge on financial management and credit & debt.
“According to FSD Kenya, digital loans in Kenya are the most recurrently used loan behind social network and money-lender loans, Moreover, those with existing loans are over-indebted or struggling to pay,” notes the report.
The low penetration of insurance, savings and investment products has also been tied to the deteriorating financial health of Kenyans.
Insurance products have been viewed as costly and out of reach while many Kenyans lack money to save from irregular income while others cite the lack of suitable products to save and invest in small sums.
Deloitte recommends accelerating the interoperability of payment systems to cut transaction costs and consumer financial laws to manage Kenyans indebtedness as part of the cure to the financial ill-health.
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