A vast majority of Kenyans are financially unhealthy despite the country enjoying high levels of financial inclusion, a report has revealed.

A report by the GSM Association (GSMA) dubbed The State of The Industry Report on Mobile Money 2023, says only 24 per cent of Kenyans are financially healthy despite 83 per cent of Kenyans being financially included.

It paints a gloomy picture of the financial situation in the country and corresponds to the current situation characterized by a high cost of living brought about by drought, inflation and other local and global factors.

“Financial inclusion does not necessarily lead to an immediate improvement in financial health,” says the report.

Mobile money account

GSMA’s report says 93 per cent of Kenyan men own a mobile phone, 94 per cent of whom own a mobile money account as of 2022.

The situation is almost similar for women where 88 per cent own a mobile phone, with 92 per cent of these owning a mobile money account as of 2022. Despite slightly more men owning mobile phones than women, mobile money awareness is higher among women (100 per cent) than men (99 per cent). Despite an increase in mobile money usage, consumer financial health has declined, particularly in low- and middle-income countries, according to the GSMA report. To remedy the situation, the government of Kenya has included financial health as a goal in its national financial inclusion strategies.

With financial health now a focus area, Mobile money providers may need to design products that serve consumers’ financial needs and ensure they remain financially healthy.

“This can be achieved through a partnership-based approach that aims to improve consumers’ financial competence and literacy through financial literacy training,” says the report.

Financial health is a term used to describe the state of one’s personal monetary affairs. There are many dimensions to financial health, including the amount of savings you have, how much one is putting away for retirement, and how much of one’s income is spent on fixed or non-discretionary expenses.