As the world continues to face multiple challenges that have economic implications, actors in the global financial system have been called upon to enhance financial inclusion as a means of mitigating the socioeconomic impacts of Covid-19.
Insecure livelihoods and lifestyles brought about by the pandemic have necessitated deliberate savings and investments in long-term projects; hence, financial resilience has become an indispensable element of post-pandemic recovery, especially among young people.
In Kenya, savings cultures and attitudes towards money have been far from robust and tend to be much influenced by political events, economic cycles and other external factors, over and above the disruptions occasioned by the Covid-19 pandemic.
The youth aged 35 and below, who constitute the greater percentage of the country’s population, are more often than not among the hardest hit by financial challenges such as unemployment and lack of investments.
Some of these conditions open up opportunities for predatory lenders and other risky behaviours such as gambling. As such, players in the financial sector across the globe continually develop programmes and campaigns targeting the youth in efforts to enhance their financial literacy.
One such programme is the Global Money Week marked annually in March. This year’s Global Money Week theme is, 'Plan your money, plant your future' – an allusion to the need to put sustainable finance at the heart of our decisions.
This is critical today, especially among young people who are driven by immediate consumption patterns and are therefore increasingly faced with indebtedness.
This year’s celebrations call for an introspective look at how we manage our incomes and expenses today, with clarity on how such actions might affect our tomorrow.
This situation is amply discussed in an EFG Hermes report, which shines a spotlight on this demographic as a contributing factor to Kenya’s poor saving culture rated at 12 per cent, way below Africa's average of 17 per cent.
The report notes that most young people tend to copy expensive lifestyles in the west and hence have high spending power. This has led to a situation where most young Kenyans have limited opportunities to save money and make investments for their future.
For a population that is at the centre of the country’s transformation in achieving socioeconomic development, it spells bad news considering that they are supposed to be key actors in driving economic growth.
The situation is dire for youth-specific groups such as women, persons with disabilities and those from low-income backgrounds who face more barriers when trying to access information on how to make good savings.
It is critical that we accelerate the process of learning and acquiring financial skills from a young age, to secure our individual futures and contribute to a stable future for our country.
Research suggests that young children value money more when they learn how to save it. In countries like Australia and New Zealand, where compulsory financial education has been part of the curriculum for several years, savings rates among children and young people have increased which points to a need for greater awareness regarding saving habits among these groups.
Embracing financial literacy practices from a young age will be key in unlocking the full potential of today's youth as the world recovers from the effects of the economic fallout from Covid-19.
Today's young and highly innovative digital generation is one that will undoubtedly revolutionise how we work, play, learn, communicate and conduct commerce. We want to align our effort with theirs and drive the vested interest of tomorrow's country leaders towards responsible finance today.
Managing director at Kenya Post Office Savings Bank (Postbank)
