Nairobi — 70 percent of Kenyans experienced income declines in 2024, according to a new report by Old Mutual.
The report highlights that this has led to a growing emotional toll, with nearly half of the country's workforce reporting significant stress, including physical and mental health impacts.
The second edition of the Old Mutual Financial Services Monitor (OMFSM) surveyed urban and peri-urban Kenyans aged 20 to 59, earning Sh12,000 or more, representing about 63 percent of the country's working population.
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The findings underline the financial insecurity gripping the nation, with many residents expressing diminished confidence in the economy.
Despite optimism in 2023, the report shows a noticeable shift in attitudes, with many Kenyans now adopting a more neutral stance toward the economy.
Factors such as high living costs, rising food prices, unemployment, and a challenging business environment are cited as key contributors to the decline in economic confidence.
As a result, only 30 percent of respondents reported that their household incomes are sufficient to cover expenses, with money left over at the end of the month.
According to the barometer, this economic strain is prompting many to adopt more cautious spending habits.
People are downsizing their homes, opting for cheaper products and services, and cutting back on non-essential expenses like dining out, entertainment, and travel.
Additionally, many are turning to entrepreneurship to supplement their incomes.
The report reveals that 50 percent of Kenyans now own a business, with 30 percent of these ventures formally registered.
However, a concerning 84 percent of these businesses lack insurance, leaving them vulnerable to financial risks.
"The traditional ways of earning a living or managing household expenses are no longer sufficient," said Old Mutual CEO Athur Oginga.
"Small businesses, such as tutoring, food delivery, or selling second-hand goods, are becoming common, as many opt to bypass formal employment."
Despite the ongoing financial difficulties, Kenyans remain focused on their long-term financial security.
While 85 percent acknowledge the importance of saving for retirement, confidence in being able to save enough for retirement has dropped dramatically.
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Only 7 percent of those surveyed are confident about their retirement savings, a steep decline from 12 percent in 2023.
Nevertheless, the number of consumers saving for retirement has increased, rising from 26 percent in 2023 to 36 percent in 2024.
The primary methods of saving include employer pension schemes, savings groups, and personal investments, further exacerbating the resilience of Kenyans.
