Financial Literacy and Education

Financial Literacy and Education kbaadmin May 28, 2024

The Chora Plan (Plan Your Money!) Financial Literacy Program is an initiative by Kenya Bankers Association (KBA) and partners designed to promote economic growth and development by empowering individuals and businesses with the knowledge and skills necessary to make informed financial decisions in banking, insurance, and pension services.

The overriding goal of the program is to empower individuals and businesses in the economy through awareness on important financial concepts, which include budgeting, saving, investment, debt management, and planning. It also aims to create awareness and understanding of financial services processes and services available, including areas such as bank credit, insurance, and pension services access requirements.

The intended outcome of the initiative is to enable households and enterprises to realize financial stability and independence, ultimately leading to enhanced sustainable socio-economic growth, and better financial health across the economy.

Recognizing that financial literacy is a public good that benefits the whole economy, the program brings together stakeholders from the financial services sector (banking, pension, insurance, and the retail sector), including partnerships with consumer organizations, and Persons with Disabilities (PWDs) organizations.

The overall aim is to synchronize public education and awareness efforts, leveraging on the unique strengths of all the partners.

Levels of savings remain low in Africa, a situation that can be partly attributed to cultural, social, and political factors. However, studies have shown that financial illiteracy accounts for most of the continent’s poor savings culture across demographics.

In East Africa, Kenya lags significantly in its savings rate compared to Uganda and Tanzania. Kenya’s savings rate as of 2021 was estimated at an underwhelming 13 percent compared to Tanzania and Uganda, which are above 20 percent despite having a significantly lower per capita income.

According to EFG Hermes’ 2021 Global Savings Survey, 38 percent of Kenya’s population (estimated at 50 million people) is financially illiterate.

Further, according to the FinAccess Household Survey 2021, adult individuals in Kenya at the household level had a low-income level, a reducing savings rate, and high level of inability to pay debts.

This initiative seeks to coordinate sustained financial education and awareness to help increase financial literacy, which will in turn improve overall financial health in the population.