KENYA Savings & Investment Monitor 1st Edition Results released February 2014 Fieldwork conducted in Q4 2013

of metro working

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Kenyans

Will be an annual tracking study to look at trends

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Face-to-Face interviews

Conducted by an independent house: TNS in Kenya

SAMPLE DETAILS

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Kenya Savings & Investment Monitor

Sample Details (450 respondents) 

All respondents were required to be employed (full or part time) and were involved in making household financial decisions, and were required to have at least one financial product in own/joint name. 51% were male and 49% female.

Age

Area

%

%

18 – 24 years

17%

Nairobi

67%

25 – 34 years

57%

Mombassa

20%

35 – 49 years

23%

Eldoret

6%

50 – 64 years

3%

Nakuru

7%

TOTAL

Personal Monthly Income

100%

TOTAL

%

Household Monthly Income

100%

%

Ksh 1 – 9 999 pm

21%

Ksh 1 – 9 999 pm

13%

Ksh 10 000 – 19 999 pm

46%

Ksh 10 000 – 19 999 pm

30%

Ksh 20 000 – 49 999 pm

26%

Ksh 20 000 – 49 999 pm

34%

Ksh 50 000 + pm

7%

Ksh 50 000 + pm

23%

TOTAL

100%

TOTAL

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100%

Sample Details (450 respondents) (cont.) Marital Status

%

Employment

%

Single, never married

47%

Work for someone

46%

Married or living with a partner

50%

Self Employed

53%

Divorced, separated/widowed

3%

TOTAL

100%

Highest Level of Education

%

Primary School

8%

Some High School/High School Complete

35%

Some Tertiary

57%

TOTAL

100%

TOTAL

Private vs Public employment

100% %

Private Sector

88%

Public Sector

7%

Parastatal

5%

TOTAL

  

100%

35% of mothers consider themselves to be “SINGLE” 49% have people (other than spouses/partners and children) that rely on them for financial support 59% have children who are dependent on them

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Savings & Investment VEHICLES USED

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Savings & Investment

VEHICLES USED Vehicle

%

Demographic Skews

Savings Account

68%

Chamas or Savings & Credit Corp.

48%

Medical Aid/Cover

29%

Medical Insurance

27%

RA

27%

Savings club with family & friends

25%

Cheque/Current Acc

21%

Nairobi 24%, Mombassa 10%, incidence increases with income

Pension/Provident Fund

16%

Incidence increases with age, 28% for 50 – 64 years, Male 20%, Female 12%, Nairobi 20%, Mombassa 8%, incidence increases with income

Transmission Acc

14%

Cash Savings (not banked)

11%

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Lowest incidence for 50 – 64 years (31%), Male 44%, Female 51%, incidence highest for Ksh 50 000+ pi pm (68%)

Incidence increases with income

Highest incidence for 50 – 64 years (24%)

Savings & Investment

VEHICLES USED (cont.) Vehicle

%

Education Policy/Plan

11%

Banked Cash Savings

10%

Life Assurance

6%

Accident Cover

6%

Grocery Scheme

6%

Company or stock market shares

4%

Funeral Policy/Plan

3%

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Demographic Skews Males 6%, Females 15%

20% for 50 – 64 years, 16% for Ksh 50 000+ pi pm

Property Ownership

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Property Ownership Incidence of owning property: YES NO

30% 70%

24% are paying off a home loan/bond

Repayment Pattern

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%

Generally pay only the minimum monthly instalment

26%

We struggle to meet monthly repayments

28%

We make regular lump sum payments into the bond over and above the required payments

10%

We pay extra into the bond every month

10%

Due to financial pressure, we have renegotiated the terms of the bond/home loan in the past year

12%

We used to pay extra in the bond, but can no longer afford to do so

2%

During the past year, we have advanced funds from home loan to pay other debt and/or expenses

12%

Incidence of owning property increases with . age and income: 52% for 50 – 64 years 46% for Ksh 50 000+ pi pm

Financial Situation & Savings Behaviour

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Satisfaction with overall HOUSEHOLD FINANCIAL SITUATION (rating out of 10)

Extremely Satisfied

9%

Rating of 9 - 10 out of 10

27%

Rating of 7 - 8 out of 10

30% 100%

Rating of 5 - 6 out of 10

34%

Mean score out of 10 = 5.5

Rating of 1 – 4 out of 10 Not at all Satisfied 13 Kenya Savings & Investment Monitor

Mean = 4.6 for Ksh 1 – 9 999 pi pm

Comparison of current financial situation to a year ago Better than it was a year ago About the same as it was a year ago Worse than it was a year ago

44% 35% 21%

Expectation of financial situation in next 6 months Will get better Will stay the same Will get worse

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67% 27% 6%

Current savings behaviour Saving more than I was a year ago Saving about the same as I was a year ago Saving less than I was a year ago

27% 26% 37%

Saving less: 47% in Mombassa, 32% in Nairobi

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Confidence in making good Savings & Investment Decisions Extremely Confident

24%

Rating of 9 - 10 out of 10 Rating of 7 - 8 out of 10

35% 100%

Rating of 5 - 6 out of 10

Mean score out of 10 = 6.9

30% Rating of 1 – 4 out of 10 Not at all Confident

11%

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38%

Mean = 6.4 for 50 – 64 years, Mean = 6.2 in Mombassa, 5.8 in Nakuru Mean = 5.9 for Ksh 1 – 9 999 pi pm Mean = 7.9 for Ksg 50 000+ pi pm

Savings Objectives

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Savings Objectives WHAT ARE YOU SAVING FOR? (cont.) Saving Objective

%

Demographic Skews

Childrens education

43%

Emergency Expenses

36%

To buy a specific item

36%

Deposit on a home

29%

Male 33%, Female 24%, Nairobi 30%, Nakuru 57%, incidence increases with income

Medical Expenses

26%

Incidence increases with income

For my own education

21%

Incidence decreases with age, Male 26%, Female 17%, Incidence increases with income

To buy food

17%

Mombassa 25%, Eldoret 57%, highest incidence for Ksh 1 – 9 999 pi pm

To do home improvements

12%

Incidence increases with age, Males 9%, Females 16%

For retirement/ old age

12%

Incidence increases with age and income

To buy a car/vehicle

11%

Incidence increases with income

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Incidence increases with age, Nakuru 64%, Nairobi 38%

Savings Objectives WHAT ARE YOU SAVING FOR? (cont.) Saving Objective

%

To provide for my family if I die

10%

For Christmas/end of year expenses

8%

For large household appliances

8%

To pay off debt

6%

For funeral expenses

6%

For other special occasions

6%

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Demographic Skews Incidence increases with age

Financial Goals

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Financial Goals for next 5 years Build a house/Invest in own property

32%

Invest in my own business

39%

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Buy a car

9%

Complete/furt her my education

7%

Provide for childrens education

5%

Attitudes to Financial Risk

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Attitudes to Financial Risk Would you rather save and invest money where……

The returns are guaranteed, but are very low and may not beat inflation

25%

There is potential (no guarantee) for moderate growth and interest, with some risk of losing money

There is potential (no guarantee) for very high growth and interest, but the risk of losing money is higher

48%

19%

“None of these options, I prefer not to invest my money at all.” – 8% 23 Kenya Savings & Investment Monitor

42% for Ksh 50 000 + pi pm

Attitudes to Work and Life

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Attitudes to Work and Life

Statements

% Agree

Demographic Skews

Community Support  Community support is very important to me

81%

95% in Eldoret, 69% for Ksh 50 000+ pi pm

Dependency  My children should look after me when I am old

60%

84% for 50 – 64 years, 53% Nairobi, 90% Mombassa

25%

52% in Eldoret, 48% in Nakuru

45%

69% for 50 – 64 years, 39% Mombassa, 35% for Ksh 50 000 + pi pm

59%

Males 58%, Females 66%, 48% for Ksh 50 000+ pi pm

68%

94% in Eldoret

68%

83% for 18 – 24 years, Males 77%, Females 65%, 83% in Mombassa, 58% in Eldoret, 88% for Ksh 50 000+ pi pm

 The government will look after me if I am unable to take care of myself Confidence in the Nigerian Economy  I feel confident about the Nigerian Economy Work – Life Balance  I really struggle to find a good balance between my work and my life General Risk Taking  I like to take risks in life Being Techno-Savvy  I like to own products that are the most technologically advanced 25 Kenya Savings & Investment Monitor

Attitudes to Financial Affairs

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Attitudes to Financial Affairs Statements

% Agree

Demographic Skews

Organising/Planning of Finances  My finances never seem to be properly organised

35%

 I actively plan my finances 5 to 10 years ahead

45%

 Dealing with personal finances is stressful

58%

 The world of financial services leaves me confused

50%

Buying on Credit and Debt  In today’s society there is no alternative but to get into debt

46%

Incidence decreases with income, 68% for 50 – 64 years, Males 43%, Females 53%, 52% Nairobi, 66% Nakuru

 Buying on credit is part of my life and I couldn’t make ends meet without it

38%

Males 35%, Females 44%, 58% Nakuru

 I try and avoid debt wherever I can

74%

66% for 50 – 64 years, 93% Eldoret

Financial Risk Taking  The only way to improve your financial position is to take a few risks

73%

83% for 18 – 24 years, 95% Eldoret, 85% for Ksh 50 000+ pi pm

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Incidence increases with age, 53% Nakuru, 46% for Ksh 1 – 9 999 pi pm 59% for 50 – 64 years, Males 51%, Females 42% Incidence increases with age, 52% for18 – 24 years, 65% for 50 – 64 years, 72% Mombassa

Attitudes to Financial Affairs (cont.) Statements Financial Guidance/Advice  I am not always sure who to turn to when it comes to my finances

% Agree

Demographic Skews

45%

Males 41%, Females 51%, 58% for Ksh 1 – 9 999 pi pm

 I would like financial advice, but it is hard to find somebody you trust to give it to you

55%

Incidence increases with age, 69% Mombassa

 I seek advice from family and friends when making financial decisions

62%

Lowest incidence for 50 – 64 years (51%), 77% Mombassa

“Money Talk” at home  Money is something we just don’t talk about in my family

25%

Highest incidence for 50 – 64 years (72%), 54% Nakuru

Saving for the future  Saving for the future is not a priority in my life right now

22%

Incidence highest in Nakuru (34%)

 I consider myself a spender, not a saver

23%

Highest incidence for 50 – 64 years, 45% Nakuru

 I have enough money left for savings after covering all my expenses

35%

Incidence increases with income, 50% for 50 – 64 years

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Attitudes to Financial Affairs (cont.) Statements Saving Priorities  I feel that death, funeral and disability cover are more important to me and my family than retirement savings

% Agree

Demographic Skews

34%

Incidence declines with income, 52% Nakuru

 Saving for education is more important to me than saving for retirement

69%

77% for 18 – 24 years, 38% for 50 – 64 years, Males 68%, Females 75%

 I am worried that I will not have enough money for my retirement

49%

69% for 50 – 64 years, 62% Nakuru, 60% for Ksh 1 – 9 999 pi pm, 38% for Ksh 50 000+ pi pm

Financial Paperwork  I find the language used in financial paperwork confusing

56%

47% for 18 – 24 years, 69% for 50 – 64 years, 65% Nakuru, 70% for Ksh 1 – 9 999 pi pm

A “hunger” to learn more about saving  I am constantly trying to become my knowledgeable about financial matters

76%

Lowest incidence for 50 – 64 years (58%), Males 85%, Females 72%, 95% for Ksh 50 000+ pi pm

 I want to learn more about how to save

83%

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98% Eldoret, 97% Ksh 50 000+ pi pm

Debt

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Incidence of Types of Debt

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Types of Debt

%

Credit card/s

14%

Personal loan from a financial institution

11%

Home Loan

8%

Informal Loan

6%

Personal loan from a micro lender

4%

Car/vehicle finance

2%

Store/Shop accounts

1%

Overdraft Facility

1%

Highest incidence in 35 – 49 years Incidence increases with income, 32% for Ksh 50 000+ pi pm

Retirement Savings

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Satisfaction with overall FINANCIAL READINESS/PROVISION FOR RETIREMENT (rating out of 10)

Extremely Satisfied

12%

Rating of 9 - 10 out of 10

20%

Rating of 7 - 8 out of 10

35% 100%

Rating of 5 - 6 out of 10

Mean score out of 10 = 5.5

34% Not at all Satisfied 33 Kenya Savings & Investment Monitor

Rating of 1 – 4 out of 10 Mean = 3.7 in Eldoret Mean score increases with income (6.3 for Ksh 50 000+ pi pm)

Planned

Retirement Age

40 – 49 years old 50 – 59 years old 60 – 64 years old 65+

3% 33% 33% 13%

Don’t know

18%

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Expectation to work for pay when retired

YES NO

37% 63%

Why? “I enjoy working and want to remain stimulated” “I will need the money”

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32% 68%

Awareness of value of savings in Retirement Fund (includes RA, Pension Fund, Provident Fund, etc.)

YES NO Do not have a retirement fund (62% in Eldoret, Incidence declines as income increases)

21% 56% 23%

Of those that do have a retirement fund, 28% claim that they are aware of the value of their savings, while 72% are not aware!

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Financial Guidance/Advice

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Primary source of personal finance, savings and investment information Primary Source

%

TV

27%

Word of Mouth

22%

Internet

16%

Radio

9%

Bank Consultant

6%

Newspapers

6%

Financial advisor/broker at financial institution

4%

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Demographic Skews 58% for 50 – 64 years

23% for 18 – 24 years

Internet Access & Purchasing Online

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Internet Access HOW? Cellphone/mobile phone Laptop Desktop computer Tablet/iPad I don’t not access the internet

59% 21% 30% 11% 31%

56% would consider buying a financial product online

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Kenya Savings & Investment Monitor