The latest Financial Access (FinAccess) Household survey shows that the saving rate dropped from 74 percent to 68.1 percent and nearly 60 percent of Kenyans are using the savings for repayment of loans and debts to avoid default. Savings is one way through which Kenya can build the necessary stock from which to finance its ambitious development programme as captured in the United Nations Sustainable Development Goals (SDGs), the African Union Agenda 2063, the East African Community Vision 2050, Kenya Vision 2030 and its Medium-Term Plans (MTPs), the Bottom-Up Economic Transformation Agenda (BETA) and the County Integrated Development Plans (CIDPs). Massive funds are needed to support sustainable development across the world, in African countries and Kenya in particular. To raise such amounts, Africa and Kenya will have to step up the mobilization and efficiency of both standard and innovative financing sources, including increased savings measures. Countries with higher rates of savings have had a faster economic growth than those with lower saving rates. Capital accumulation creates greater opportunities for production and the productivity of a country by providing an additional income stream for countries. The United Nations Conference on Trade and Development (UNCTAD) “Development and Globalization: Facts and Figures” of 2004 emphasizes that the main factor in increasing in-country capital is the increase of savings and that, in that regard, developing countries should prioritize programmes that promote domestic savings, in order for capital to be invested towards the most productive practices.
Effective savings can be done through savings and Credit Cooperative Societies (Saccos), which should have digital transformation visions and strategies to guide them in launching various operations to safeguard members savings. There is need to develop well designed, developed network, ICT infrastructure and architecture, in addition to establishment of poor governance and accountability trends with clear and regular systems audit covering finance, ICT, Risks, adoption of advanced technologies, existence and constant review of Business Continuity Plans (BCP) to handle cases of force majeure occurrences. Saccos should ensure that Kenya has a vibrant and competitive financial sector to drive our quest for adequate savings from which we can finance our national development needs. Basic developments models as espoused by early thinkers stated that savings = investments = developments. No country can develop without mobilizing enough resources domestically, and savings is one of the surest ways of ensuring that this can be done. Through savings, there is money accumulation process that can be used to finance development ventures that create employment and generate more wealth. The importance of saccos is shown by the fact that it has an asset base of more than Kenya shillings one Trillion and also employs some 2 million Kenyans directly and indirectly. Dr Giti is an urban management, public – private partnerships (PPP) and environment specialist. mutegigiti@gmail.com , @danielgiti
Dr. Daniel Mutegi Giti 