Treasury Cabinet Secretary John Mbadi on Tuesday explained that Kenyans are financially illiterate, which is why they struggle to make money and achieve financial health.
Due to this illiteracy, Mbadi revealed that the financial health of Kenyans continues to decline despite the increase in the inflation rate.
Speaking while launching the 2024 FinAccess Household Survey Report, Mbadi revealed that 81.7 per cent, which represents 46 million Kenyans, are financially unhealthy facing challenges in managing daily expenses and investing for the future.
According to the report, only 18.3 per cent representing 10 million Kenyans are considered financially healthy in 2024 down from 39.4 per cent in 2016.
This represents a 21.1 per cent increase in the number of Kenyans who are financially unhealthy compared to the previous year.
Following the revelation of the report, Mbadi questioned who truly benefitted from the financial inclusions, especially after recent reports revealed a lower inflation rate of 2.8 per cent in November.
"This raises critical questions about who truly benefits from financial inclusion and whether current policies and innovations are addressing the needs of the people," Mbadi posed.
According to the Cabinet Secretary, many Kenyans are struggling to make more money because they are financially illiterate.
Mbadi has pointed out that Kenyans don't know where to take their money in investments, savings, and daily spending which explains why they are struggling to make more.
"Only 42 per cent of Kenya’s adult population is highly financially literate, while 41 per cent are classified as financially literate. This highlights a significant gap in understanding key concepts like the cost of borrowing, inflation’s impact on income, and risk diversification,” the CS explained.
To help Kenyans come out of financial illiteracy, Mbadi called on relevant stakeholders to prioritize financial literacy initiatives to ensure that Kenyans can make informed financial decisions.
According to a Kenya National Bureau of Statistics (KNBS) report, the rise is attributed to the increased prices of key commodities, particularly food and beverages, which saw a 0.6 per cent hike in October.
