The financial landscape in Kenya is under scrutiny following the release of sobering statistics from a recent survey conducted by Old Mutual Group.

The survey reveals a troubling reality for many Kenyans, with approximately five out of 10 individuals, totaling 48 percent of the population, reporting feeling overwhelmingly or highly stressed by their financial situation. 

Among these respondents, informal sector workers earning less than Ksh20,000 per month appear to be particularly vulnerable, with 51 percent expressing significant financial stress. 

Building upon the findings of the Old Mutual survey, a recent poll conducted by Infotrak research firm further illuminates the depth of financial distress gripping the nation.

The poll indicates that a staggering 73 percent of Kenyans find themselves affected by financial difficulties. 

Within this group, 18 percent are in severe financial distress, while 55 percent are struggling to make ends meet. These statistics paint a concerning picture of the economic challenges faced by a significant portion of the population.

Delving deeper into the statistics reveals a complex web of financial pressures confronting Kenyans on a daily basis. One notable trend highlighted by the survey is the significant reduction in incomes experienced by the majority of the population, with 62 percent reporting a decrease compared to pre-pandemic earnings. 

Additionally, a sizable portion, 29 percent, report stagnant incomes, indicating a pervasive stagnation in financial growth across the board.

The correlation between income levels and stress underscores the challenges faced by individuals in different economic brackets.

For instance, those earning Sh20,000 or less per month encounter various hurdles, including heavy taxation, rising living costs, and low salaries. 

A report from 2021 found that 55% of small and medium-sized enterprises (SMEs) in Kenya paid an average salary of less than Sh20,000, exacerbating income disparities.

Additionally, a 2023 TIFA report revealed that only 3% of Kenyans earn above KES 50,001, highlighting the prevalence of low-income earners.

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Multiple factors contribute to the financial hardship faced by Kenyans, including rising living costs, heavy taxation, escalating fuel and power expenses, and increasing prices of basic commodities.

These economic pressures are compounded by challenges in accessing capital for public goods and services, further straining household budgets and exacerbating the overall financial burden.

The implications of such financial struggles extend beyond economic realms, permeating into mental health. Persistent stress and anxiety resulting from financial difficulties can have long-term ramifications on mental well-being.

To mitigate these effects, various strategies can be employed, including budgeting, expense reduction, and seeking professional financial advice. Additionally, promoting activities that alleviate stress, such as spending time in nature, engaging in hobbies, and maintaining physical health, can contribute to overall well-being.

The COVID-19 pandemic has exacerbated existing financial strains, with studies indicating widespread income loss and escalating food prices. In 2020, a significant portion of Kenya’s population experienced income reduction due to lockdown-induced economic downturns.

Subsequent surveys reveal the enduring impact, with a substantial 73 percent of Kenyans grappling with financial distress in 2024.

Furthermore, the emergence of the “sandwich generation” poses additional challenges to Kenyan families. This group, primarily composed of middle-aged adults between 35 and 44 years old, finds themselves sandwiched between caring for their children and aging parents while also planning for their own retirement. 

A large percentage, 75 percent, support children, and 58 percent provide financial assistance to elderly dependents. Furthermore, a significant portion of Kenyan adults, 46 percent, find themselves in the role of caregivers for both their children and parents, amplifying the financial strain experienced by this demographic.

Financially supporting multiple generations simultaneously places a considerable strain on these individuals, leading to increased stress, time constraints, and emotional tolls.

Balancing financial obligations while managing budget constraints requires careful planning and resource allocation. According to a 2024 survey, the average monthly income for Kenyans is Ksh20,123, highlighting the financial constraints faced by many households in the country.

The erosion of real income values due to inflation compounds the challenges faced by individuals and families, making it increasingly difficult to maintain purchasing power and meet essential needs. 

According to the African Development Bank Group, Kenya’s inflation is projected to be 5.9% in 2024, with food and energy inflation contributing to this figure.

This persistent decline in real earnings highlights the importance of proactive financial planning and education in mitigating the adverse effects of inflation on household budgets.

Efforts to address these challenges must encompass not only short-term relief measures but also long-term structural reforms aimed at promoting inclusive economic growth and resilience.

By fostering financial literacy, strengthening social safety nets, and enhancing economic opportunities, Kenya can work towards alleviating the financial strain plaguing its populace and fostering sustainable development.