Objective-driven saving key to business growth, says financial adviser

Hezekiah Kariuki, director at Together As One Microfinance speaks during an event at Safari Park Hotel, Nairobi / HANDOUT

Prudent saving with a clear development goal is one of the safest ways for investors and business owners to secure funds for future growth, financial adviser Hezekiah Kariuki has said.

Kariuki, a director at Together As One Microfinance, said savings should be guided by specific objectives rather than being set aside without a defined purpose.

According to him, saving without a clear plan increases the risk of funds being diverted to emergencies or becoming inaccessible if a savings institution encounters difficulties.

"A saving culture must be development-driven, with clear targets and timelines within which an objective should be achieved," said Kariuki.

He was speaking during a financial literacy forum held at Rainbow Resort in Ruiru. Kariuki cited financial discipline and a focus on development goals as key factors in achieving objective-based savings.

He noted that keeping money in financial institutions for long periods without clear timelines could expose savings to the effects of inflation and other risks, including the collapse of financial institutions. Kariuki said the country's difficult economic environment has affected both the saving culture among citizens and business operations.

He acknowledged that lending institutions, including those in the microfinance sector, have also been adversely affected by the challenging economic conditions.

"We in the lending sector have found ourselves in very difficult times. Some borrowers are unable to repay loans as agreed, and in some cases lenders are forced to seek legal redress to recover funds. This sometimes results in court cases, although that is not our preferred outcome," he said.

To survive the tough business environment, Kariuki advised traders to focus on one business venture and build it successfully rather than spreading their efforts across multiple ventures.

He also urged traders to conduct due diligence before choosing financial institutions in which to save, noting that some investors have suffered losses when financial institutions ceased operations.

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