Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
The low preparedness for retirement has been pegged on several factors such as high cost of living, not having enough income to save, lack of saving discipline and lack of financial advice/FILE

Finance

Why Kenyans are no longer saving in banks – Survey

35 percent of Kenyans do not save in banks due to lack of finances, while 15.5 percent of individuals lack a regular income to engage in saving/FILE

NAIROBI, Kenya, Aug 20 – Lack of money to save and lack of regular income are the leading reasons why the percentage of Kenyans saving in banks is declining.

According to the Financial Sector Deepening (FSD) survey, 35 percent of Kenyans do not save in banks due to lack of finances, while 15.5 percent of individuals lack a regular income to engage in saving.

“Of the twenty-two (22) reasons surveyed for non-use of a bank account, eight (8) reasons emerged top with a total response rate of 88.3 percent. Lack of money to save, inability to maintain an account and lack of regular income were the top three reasons cited, in total accounting for 70 percent of response rate,” read the survey.

Other reasons include long distance to nearest bank, lack of trust, financial literacy limitations, among others, although not significant.

This is even as mobile banking account usage increased by 8 percent in 2019, while the use of traditional bank accounts declined by an average of 2.1 percent during the same period.

Rapid adoption of mobile banking accounts usage was more among the male/urban users at 8 percent growth rate, although adoption among the female/urban mobile banking accounts usage was just 1 percentage point below, at 7 percent growth rate.

This may reflect closure of bank branches by some banks and rapid uptake of technological solutions by young people.

“There are two main challenges customers cited in the use of a bank account which include Automated Teller Machine (ATM) or card machine not working and being levied with unexpected charges,” reads the survey.

The ATM/ card machine not working was more pronounced in the urban areas and among the female users while the unexpected charges were more cited by male and rural users.

The report comes at the backdrop of increased traditional accounts declined from 31.7 percent in 2016 to 29.6 percent in 2019, mobile banking accounts usage increased to 25.3 percent in 2019 from 17.5 percent in 2016.

Advertisement. Scroll to continue reading.

It further indicates that Growth in mobile banking account usage is mainly driven by young people below the age of 35 years.

 

1 Comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...