Savings and investment firms are being challenged to develop affordable products that will increase uptake especially among consumers in the informal sector.
Speaking during 4th Economic Empowerment Conference organized by Abojani Investment, industry experts noted the negative effects the additional statutory deductions on housing and health is likely to have on disposal income especially from three million Kenyans with pay slips.
“Anytime you have something like a deduction, it affects the saving culture because savings depend on disposable income. If disposal income is affected it definitely affects savings. I think we can have a situation whereby we inject liquidity in the market by allowing people who are employed to have better income,” said Robert Ochieng, Abojani Investment Founder and Chief Executive Officer.
According to Ochieng, workers in the informal sector could offer alternative growth for financial institutions through awareness which will encourage uptake of products to meet their needs especially in post-retirement.
The firm which recently concluded a challenge saw 200 out of 800 members of its members achieved their goal of saving one million shillings within the year.
“On the good day build a surplus that you can cover for the bad days. It is important to know that the right time to start is when you have a source of income and just take a percentage of it. It could be 5pc, 10pc and it will work in your favour because time is the best friend for anyone looking at investing,” he added.
According to the World Bank Kenya’s national gross savings to gross domestic product shrunk to 10.pc in 2023 from 11.3pc the previous year.
“The issue of saving is very important. I always tell young people the best way to become wealthy is not to earn a lot of money. You become wealthy because you save the money you earn,” noted Dr Dan Gikonyo, Founder and Chief Cardiologist at Karen Hospital.
Among products consumers are being urged to explore include collective investment schemes such as money markets fund and equity fund and unit trusts.
“A lot of us as much as we may have regular or irregular income, we struggle to finance our children’s education. Some of those structures like an education trust, an education policy can support the growth of the education financing for the families,” added Peter Wachira CEO, ICEA Lion Trust.
The conference brought together at least 300 participants focused on encouraging a culture of saving to secure the future and support family stability.
