Kakamega, Kenya – The National Social Security Fund (NSSF) is making a concerted effort to encourage a culture of savings in Kenya, with a particular call to action for the citizens to register for voluntary retirement schemes.
According to Kenya News Agency, Vicky Webuye, the Western Regional Director for NSSF, expressed concern about the low levels of savings among Kenyans, especially in the informal sector. The event was a platform to stress the importance of saving for retirement, an aspect often overlooked by the working population.
Webuye pointed out the peculiar situation in Western Kenya, where the savings rate is significantly lower compared to other regions. She attributed this to a prevalent reliance on children to support their parents in old age, which she noted as a deterrent to joining voluntary schemes like the NSSF. This attitude, according to her, not only prevents individuals from securing their future through regular retirement income but also perpetuates poverty levels.
Highlighting a widespread misconception, Mrs. Webuye mentioned that many young people delay saving for retirement under the false assumption that such financial planning should be a concern for older individuals only. She took the opportunity to clarify that under the NSSF Act, contributions can be made by any individual, regardless of formal employment status.
She also put forth the advantages of saving with NSSF, mentioning that it offers the highest interest rate in the market and that members’ contributions are not taxed. Moreover, the NSSF, being a government entity, assures the safety of the members’ funds, with benefits starting from the age of 50.
This drive towards cultivating a savings culture is underpinned by findings from EFG Hermes Kenya, a non-governmental organization specializing in multiple financial services. The analysis by EFG Hermes shows that Kenya’s saving rate stands at 12 percent, which is below the African average of 17 percent. The report also compares Kenya’s savings rate with its East African neighbors, noting that Uganda and Tanzania have surpassed the 20 percent threshold despite having lower per capita incomes.
These statistics aim to reinforce the NSSF’s message and spur a behavioral shift among Kenyans towards better financial security through savings.