Kenya has made significant progress in expanding access to financial services, but having access to an account or financial product does not necessarily mean a household is financially secure.
The more important question is whether a household can withstand a sudden loss of income, such as missing two consecutive salaries, without being forced to borrow, delay essential payments or sell assets. This is a more useful measure of financial resilience than simply looking at balances held in bank accounts.
Kenyans save through a wide range of channels, including banks, mobile wallets, Saccos, chamas, money market funds and pension schemes.
Therefore, bank account balances alone do not provide a complete picture of household savings.
At the same time, not all savings are equally accessible. Money set aside for retirement, for example, may not be readily available to meet immediate expenses such as rent, food, school fees or medical bills.
The finding by FinAccess that only 18.3 per cent of adults are financially healthy highlights this gap.
Financial wellness should increasingly be assessed by looking at whether households have sufficient accessible savings to meet essential expenses for at least two months without borrowing or falling behind on payments.
When households have little financial breathing room, long-term savings can also come under pressure.
Voluntary pension contributions and personal retirement schemes are often among the first expenses to be reduced when families face rising costs or income disruptions because immediate needs take priority.
This creates a difficult trade-off between short-term survival and long-term financial security.
One way of addressing it is to build an emergency fund in an accessible savings account or a money market fund while maintaining regular pension contributions.
The goal should not only be to get more Kenyans into the formal financial system, but to ensure they have enough financial cushioning to withstand shocks while continuing to build wealth for retirement.
