The next big thing in banking

• You could soon apply for a loan in a supermarket and get it through your mobile phone on your way to the village

Mobilising savings

With agriculture contributing to 23.9 per cent of Kenya’s national Gross Domestic Product (GDP), 60 per cent of the total export earnings and 80 per cent of Kenyans deriving their livelihood from farms, it is not difficult to see how increased funding in rural economy will change the country’s overall economic wellbeing.

For those in towns, it would mean that remittances to rural areas decreases, as the rural population, which is currently highly dependent on those in urban areas, become self-reliant. Less remittance means more disposable income that can be invested in economic activities that can bring meaningful return.

It is not just the effort to ease poverty level that will win in this drive, the government’s effort to mobilise savings will get a boost.

In the same paper by Ms Kibaara, Tegemeo Institute says that in one of the studies “rural folks have a higher demand for a safe haven for their money rather than for credit or borrowing.”

By figures, cumulative saving per member averaged to Sh19,000 while amount borrowed loan averaged only Sh7,215. Only 38 per cent of the clients were interested in obtaining loans.

wkangaru@nation.co.ke