Discussion Paper No 298 of 2022 on Enhancing Household Savings Behaviour through Mobile Money Fintech Innovation

Abstract

Savings are important for households and the sustainability of the economy. They reflect on the ability of a household to cope with cyclical incomes. This study analyses the factors that determine mobile money savings by households across the country in an effort to come up with strategies to enhance the same. The study used data from the Kenya National Financial Access Household Survey (2021) in the analysis. The findings of show that mobile money savings increase with age, individual financial goals, perception of financial information safety and confidentiality, and urbanization. Mobile money savings were higher in urban areas relative to rural areas. Financial literacy and access to relevant information and knowledge play a critical role in enhancing mobile money savings behaviour among households and individuals. Based on the results, most of those who save through mobile money are youths and adults in their prime working age, 36 years to 60 years, at 44 per cent and 34 per cent, respectively; and those earning an income of less than Ksh 25,000 per month. Further, a significant proportion of women are not saving using mobile money. The study recommends the promotion of financial literacy education programmes to the youth and the women to empower them to save.