Here’s how Business Owners will benefit in a Savings Culture

A recent analysis by EFG Hermes shows that most Kenyans saving rate is below the continent’s average. In the long-term, the Kenya National Savings Ratio is projected to trend around 11.70 percent in 2021, according to trading economics econometric models. Compared to the neighboring countries such as Uganda and Tanzania, their saving rate is higher than Kenya. Experts label this reports to be attached to many factors including high rate of spending by the youthful SMES emulating the western culture. However there are so many missing links, practices that Kenyans need to be embrace in order to improve their saving culture.

Saving culture.

In an article written by the Star Newspaper, “Kenyans’ saving culture poorest in East Africa” which carried some of its facts from the popular show, EFG Hermes shows, Kenyans have been placed on spotlight for their poor saving culture.

According to the Star newspaper, Kenya’s saving rate as of August is at 13%, which is way below Africa’s average of 17%.

This comes barely a week since CrystalPerk Mombasa magazine released its issue of August where Ms. Wanjiku Wambugu – Founder Ecobiz Sacco was featured.

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According to Ms. Wambugu most Kenyans don’t know where to start when it comes to savings, a state that leads them to misuse what they hold, hence destroying the individual GDP.

“Every Kenyan carries his own GDP. It depends on the behaviour of a person that makes difference in the economy, most spend a lot, some don’t,” noted Ms. Wambugu.

A state that concurs with EFG show report, according to the report, Kenya’s poor saving culture is attributed to a high spending power, especially by young people who follow international trends closely, thanks to the technological advancement in the country.

“Kenyans are well connected to the world, thanks to both high mobile phone and internet penetration. Most young people tend to copy expensive lifestyles in the west, hence high spending power,” the report said.

It added that saving culture is natural at a tender age but most families in the country shy away from the subject.

“There is a huge disconnect between parents and their children. Very minimal mentoring and financial literacy. Kenya lack cultural identity, hence copying the west,” the report continued.

You Only Live Once (YOLO)

According to the Star newspaper, modernization has been among the key drivers of poor saving culture. As many youths crumble with the tune of ‘You only live once’ abbreviated as YOLO, there has been nothing done to save them from the breaking future.

This, among other factors including high poverty rate, is perhaps the reason why 80 per cent of the country’s population lack a saving plan, according to the Kenya National Bureau of Statistics.

The relationships

The report further showed a correlation between saving culture and happiness. Nordic countries such as Finland, Switzerland, Norway, Iceland and Denmark with a high saving rate are leading in the global happiness index.

The Star shows that as of last year according to the UN survey, Kenya was ranked at 121 out of 156 countries in terms of happiness. It noted that the happiness index in the East African nation was just 4.583 out of the scale of 10.

The five Nordic countries had happiness indices above 70 per cent, with Finland leading at (7.842), Denmark (7.620) Switzerland (7.571), Iceland (7.554), Netherlands (7.464) and Norway (7.392).

The National Economic Survey report by the Central Bank of Kenya (CBK) indicates that SMEs constitute 98 percent of all business in Kenya.

While the youthful generation is having challenges in securing the jobs they intended to have after graduation, a good number has already sorted in expanding their business potential and that’s the reason the Kenyan economy is growing exponentially.

Why Kenyans have a poor saving culture.

Nabila Hatimy, a reporter for Radio Africa group attests to the report with what is happening to the ground by many Kenyans. According to her, to say the situation is discouraging would be to whitewash it.

“This situation is downright devastating because I know I might not be able to reach the same target before the year ends. The fact of the matter is that Kenyans do not carry the innate aspiration to save. Kenyans are survivors. We barely make ends meet on what we make; we are forced to seek other sources of income just to afford the basics from month-end to month-end,” said Hatimy.

She further explains that, most Kenyans lose a lot in saving by attending to the bills considering the high living standards currently experienced in Kenya. She says that, an average Kenyan spends about 1/3 of his income on rent (specific to urban settlements) and the rest is divided into utilities, house help salaries, transport, Internet costs, phone bills, groceries, tuition and personal loans. Before he/she knows it, the person is running at a deficit.

“With mobile loans being so accessible to every device holder, the temptation to cash in on a loan is so easy, especially on a dry midmonth day.”

There so many variables that surround the poor saving culture. Lack of early mentorship for children in money matters has been the core problem among many Kenyans. While most parents focus on spoiling their kids with posh items they end up lamenting their position in life way later when the kids are grown, why, because of the poor money background. The fact remains that most Kenyan parents are not taught, neither do we teach our children, the proper ways to save and invest money from an early age.

Culture has also ruined the savings thirst too. While most people work to fend their families, we are often burdened with the initiative of taking responsibilities of our families forgetting there is life to live. According to Hatimy, we are burdened with the responsibilities of ageing parents, struggling siblings as well as other members of the extended family who we are somehow indebted to.

How Kenyans can improve their saving culture.

Stereotypic advisories will cloud the SME sector in Kenya which is arguably the biggest percentage of the job – providing arena in the country.

As economist’s loud savings to be the biggest security for any potential entrepreneur, there are so many links and behavioral traits abandoned in Kenya that need to now be cultivated in order to improve the saving culture in Kenya.

Cultivating the habit of savings is a very important one; this habit can help you in many aspects of life. A good saver can save out funds for business, a good saver is debt free, a good saver has already made a right and bold step to financial freedom, a good saver can reach certain goals that can’t be ordinarily attained with the limited revenues he gets.

Cultivating a savings culture is always ideal, but is never easy. Savings entails starving yourself off certain wants and pleasures, and that takes a lot of discipline. Many people want to save, many people wish they could save, but just few save at the end of the day.

There are certain ways you can cultivate a savings culture.

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Partners begin from banks, shareholders, investors, microfinances, consultancy groups among others. These groups often have reliable ways to help foster growth and help in savings plan evaluation. With accounts such as Kuza Biashara account and Stawisha from CrystalPerk businesses can see their profits rising, rising and rising, an accommodative advantage to budget well for savings and fix some to desirable expenses.


The first major step to savings is assessing your financial health; this would help you know the direction you’re headed and how to get there. You need to have a clear picture of your income and expenses, you need to know what takes the bulk of your money, and also try to ascertain whether you’re spending more than you earn. When you have this figured out then you can move to the next step.


Having a budget would help guide you on what you ought to spend your money on and what you shouldn’t. With a budget, you would know your needs and wants and have a clear picture of how to cut down on spending on your wants. Wanting to satisfy your wants would make you unable to save. A budget would help you plan better, save better and cut down unnecessary expenses.


Your spending habits would determine if you would be a successful saver or not. Keep track of your daily lifestyle and what you spend your money on. After assessing where your money goes, look for ways you can minimize how much you spend.


Emergencies happen all the time; this is something we have no control over, and the best way to handle emergency is to save, so you won’t be left out of the dark. Set about 5% of your income monthly to save for emergencies, so you wouldn’t be left in the dark when the situation arises. Your emergency savings should be different from your normal savings.


Having your mind geared towards saving would help you save better. Also, if you notice you still have money left at the end of the month, rather than spend it unwisely, the best bet is to save it. This would help you reach your goal faster.


The best way to save is by setting a fixed percentage to be saved monthly. This way, when your income increases, your savings would increase as well.


Friends are important, but when you have friends that won’t let you save, it’s best to minimize the way you see them. Gatherings and friends that prompt you to spend money won’t only kill your savings but might even push you to spend above your earnings.

These tips would help you imbibe a savings culture, and you cannot overemphasise the power of savings. With so much approval of individual behaviors being at the core of poor saving culture, Kenyan businesses can now walk head high as the SME market continues to dictate the National returns (GDP).

Mombasa, Kenya.

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