Banking:KBA,CBK targets youths on saving culture and Financial Literacy

The Kenya Bankers Association (KBA) is working with the Central Bank of Kenya (CBK) to encourage a saving culture among Kenyans.

The  youths with approximately 75 percent of Kenyans being under 35 years old are being targeted on the programme.CBK Governor Patrick Njoroge stressed the crucial role of financial literacy in promoting economic growth and stability.

” Financial literacy is not only about understanding money; it is about understanding oneself and the impact of financial decisions on one’s future. By empowering the youth with knowledge on how to handle their finances in an effective way, we are building a resilient and prosperous nation,” he said.

In 2021, a report by EFG Hermes showed that Kenya’s savings rate, which is calculated as the difference between income and consumption as a percentage of GDP, stood at 13 percent. This figure is considerably lower than the African average of 17 percent.

In comparison, neighboring countries Uganda and Tanzania have surpassed the 20 percent mark, despite having lower per capita incomes.The report identified several factors contributing to the country’s poor savings culture.

The the country’s high spending power, particularly among young people who closely follow international trends, leads to increased consumption and limited savings.

The influence of consumerism and the desire to keep up with global lifestyle trends may contribute to a lack of focus on saving for the future.

With the campaign, KBA CEO Habil Olaka noted it will help individuals make informed decisions on saving, banking, and finance management, boosting the country’s economy.

“As an industry, we recognize the challenges faced by a big number of the public, and especially the youth in managing their finances effectively.We believe that by fostering financial literacy, we are empowering individuals to secure their financial future and contribute to the overall economic well-being of our country,” he said.