Nyeri County has the highest number of people saving their money, according to Financial Sector Deepening Kenya's (FSD Kenya) recent analysis of FinAccess 2021 data on savings and financial literacy.
The report covering the first two quarters between January and June 2023, revealed that Nyeri residents had a saving rate of 83.7 per cent despite having low financial literacy levels of 49.9 per cent.
Nyeri was followed closely by Murang'a County, where residents saved actively at the rate of 81.5 per cent. The Governor Irungu Kang'ata led county, however, had a low financial literacy level of 30.6 per cent.
The top five counties with the highest saving culture included Trans Nzoia (79.8 per cent), Nyamira (78.1 per cent) and Kajiado (78 per cent).
"There seems to be a positive correlation between financial literacy and certain key demographics. For instance, individuals with higher education levels (tertiary level) and those in the working class (26-45 years old) have higher formal savings and greater financial literacy," the report read in part.
However, this trend does not hold true for other demographics, such as the county level. Bomet, which has the highest financial literacy levels at 70 per cent of adults, does not have a correspondingly high formal savings rate, standing at 62.5 per cent.
On the other hand, Nyeri and Murang’a have the highest formal savings rates in the country, at 83.7 per cent and 81.5 per cent, respectively, but their financial literacy rates are not as high, at 49.9 per cent and 30.6 per cent, respectively, the report added.
According to the report, Kisii County had a saving rate of 77.3 per cent, 77.2 per cent in Kirinyaga, 76.3 per cent in Embu and 74.8 per cent in Kiambu.
Nairobi and Siaya counties closed the bracket of top saving areas with 74 per cent and 72.7 per cent, respectively.
However, Bomet was ranked top in counties where people had the highest financial literacy of 70 per cent. Despite Nairobi having an average saving culture, it emerged second (69.8 per cent) in counties with a high financial literacy rate.
Nakuru had 67 per cent, Nyandarua 66.2 per cent and Kericho 62.8 per cent completing the set counties with high financial literacy.
FSD observed that people save primarily for day-to-day expenses, emergencies, and education.
"Savings also play a critical role in businesses as a source of start-up capital and for day-to-day operations. Therefore, whether one is financially literate (as defined by the metric used in FinAccess) or not, the need to set aside money for specific reasons is evident among Kenyans," FSD stated.
Due to the saving culture, FSD established that loan uptake had reduced.
