Why Kenyans are no longer saving in banks – SurveyAugust 20, 2019
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.
It further indicates that Growth in mobile banking account usage is mainly driven by young people below the age of 35 years.