Financial sector urged to address population needs for economic growth

In a bid to enhance financial inclusion and spur economic growth, stakeholders in the financial services sector have been urged to prioritise the needs of the populace when developing products and services.

This call to action was made during the launch of the ‘Chora Plan’ (Plan Your Money) financial literacy campaign.

Central Bank of Kenya Governor, Dr. Kamau Thugge, emphasised the pivotal role of the finance and insurance sectors in driving Kenya's economic growth, yet pointed out that more can be done.

"It is imperative that the financial services we provide cater to the needs of customers. They should address day-to-day necessities, help cope with financial shocks, and enable investments in future goals," Thugge stated.

He challenged financial institutions to assess if their offerings truly meet the financial health needs of Kenyans, particularly those at the bottom of the pyramid.

Thugge also encouraged financial service providers to rationalise their costs, enhance customer service, improve transparency, and raise awareness about emerging fraud tactics, including social engineering and identity theft.

"By equipping Kenyans with the necessary knowledge and skills to make informed financial decisions, we are not only empowering individuals and businesses but also laying a strong foundation for a more resilient and prosperous economy," he added.

The Central Bank of Kenya (CBK) is committed to creating a sustainable framework for ongoing financial literacy efforts.

The Chora Plan campaign, organised by the Kenya Bankers Association (KBA) in collaboration with CBK, aims to empower individuals and businesses with the knowledge needed for informed financial decisions, thereby enhancing financial stability and economic growth.

This year’s theme, ‘Strengthening Financial Health Through Financial Literacy,’ has garnered support from a variety of partners including VISA, Kenya Deposit Insurance Corporation (KDIC), Kenya Mortgage Refinance Company (KMRC), PesaLink, and AfricaNenda.

KBA Chairman and NCBA Group Managing Director, John Gachora, lauded the initiative, saying, "This program is a transformative step towards creating a financially literate society. By focusing on practical financial education in areas such as banking, insurance and pension services, we can help individuals and businesses make better financial decisions that benefit them and the broader economy."

KBA Acting CEO, Raimond Molenje, highlighted the low levels of financial literacy in Kenya compared to neighbouring East African countries.

"We are excited to launch the Chora Plan program, together with our partners. Kenya’s financial literacy levels are very low as compared to even some of our neighbours in the East African region, which is quite a shame bearing in mind that we pride ourselves as the leading economy in the region," Molenje stated.

"As the banking sector, we understand that we have a role to play to change this situation, well aware that financial literacy is the cornerstone for economic empowerment."

Visa Country Manager, Eva Ngigi, underscored the importance of financial literacy, comparing it to basic skills taught in schools.

"Just like reading and writing is taught in schools, financial literacy is an important skill to have to grow the competency amongst the younger generation. Innovation is in Visa's DNA," Ngigi stated.

"Through gamified methods, we are making financial education engaging and accessible to all. We aim to provide everyone with the tools to make informed financial decisions and this includes programs for school-going children."

Echoing this sentiment, Hellen Chepchumba Chepkwony, CEO of KDIC, remarked, "The campaign will help us achieve our long-awaited mandate to empower individuals with the knowledge and skills to make informed financial decisions. KDIC's role in financial literacy is complementing the CBK to ensure stability and ensure deposit education is imparted on borrowers and the public to maintain financial stability."

Gituku Kirika, CEO of PesaLink, reinforced the industry's commitment to customer empowerment.

“As an industry, we are committed to helping customers make smart financial decisions. By watching transaction fees and planning, customers can save money and improve their banking experience," Kirika stated.

"PesaLink’s goal is to empower bank customers in Kenya with the knowledge and tools they need to manage their finances efficiently. With PesaLink, sending money has never been easier or more cost-effective."

The Chora Plan campaign addresses the urgent need for financial education in Kenya, where a 2021 Global Financial Literacy Survey revealed that only 38 per cent of the population is financially literate.

Despite economic growth, low savings rates and high financial illiteracy continue to impede the financial well-being of many Kenyans.

The campaign aims to bridge this gap and promote a culture of informed financial decision-making across the nation.