Data Hub

Kenyan youth: We save, run businesses and are in farming

A majority of Kenyan youth invests their savings in business and agriculture
A majority of Kenyan youth invests their savings in business and agriculture, a new survey shows, providing a hint about the financial habits of the largest portion of the country’s population. FILE PHOTO | NMG 

A majority of Kenyan youth invests their savings in business and agriculture, a new survey shows, providing a hint about the financial habits of the largest portion of the country’s population.

An estimated 53 percent of the youth invested in business while 47 percent channelled money into farming, according to a study by Geopoll.

Other favourite investment points for the youth in Kenya are land buying (19 percent), and the stock exchange and real estate at nine and eight percent respectively.

The survey covered six nations: Kenya, Uganda, Tanzania, Nigeria, Ghana and Ivory Coast and covered youth aged between 18-24 and 25-35.

Business and farming are gaining traction among youth in Kenya and other parts of Africa, pushed by higher returns, new technology and mechanisation.

From servicing farm machinery to operating equipment for processing, packaging and distribution, mechanisation would “open up a lot of business opportunities for young people”.

Campaigns by non-state organisations have particularly helped to draw the youth to farming to help correct the continent’s struggles with rising hunger, unemployment and migration.

“An average of 42 percent across the countries studied reported investing in business, and the farming category was not far behind with a 34 percent average,” the poll said.

However, the study did not indicate which businesses were getting much attention of the polled population. It also did not clarify that some investors are in agribusiness.

The popularity of the investment channels, however, have key nuances to note on a country-by-country level.

Tanzania was by far the most engaged country in business investments at 63 percent, and one of the lowest engaged in farming at 26 percent.

Ghana was also much more engaged in business investments than farming at 38 percent and 13 percent respectively, yet this is not the same story showed in all of the countries studied.

The study was conducted between July and September.

“Kenya, Nigeria, and Côte d’Ivoire leaned slightly toward business investments but also had almost as many people report investing in farming. Uganda’s results show the same as Kenya, Nigeria, and Côte d’Ivoire but Uganda leans toward farming as the most popular investment category”.

Uganda and Kenya tied at 47 percent in farming, the survey shows.

In another revelation of the financial habits of Kenyan youth, the Geopoll survey showed that an impressive one in every three save regularly despite the well known economic challenges.

Thirty-four percent of Kenyan youth respondents said they save frequently, pointing out that “they almost always set aside money as savings”.

Overall, 73 percent of the study reported saving ‘almost always’, ‘sometimes’ or ‘every once in a while’, indicating “Kenyans are trying to save regularly”.

Kenya’s savings performance outweighs youth in Ghana and Côte d’Ivoire who register 22 percent each.

Of these, 38 percent indicated they save “whatever is left over after spending on items that they had planned to spend on”, while the remaining had similar response rates.

The survey showed that 39 percent of Kenyan youth have consistent income, mostly from employment, self-employment, and parents.

The largest average share of monthly spending went to food at 23 percent, followed by school fees and education at 11 percent. Non-food household items, rent, and clothing are all tied at seven percent of monthly spending.

Airtime came in last, an indication that youth share of monthly expenses used for phone credit, is a significant portion of funds when compared to other essential items.

In Africa, cash was by far the most popular payment method, garnering 62 percent of payment types in the polled countries.

Cash was most popular for groceries at 86 percent, transportation (86), non-alcoholic beverages (82), and beauty products (81).

Overall, cash was used for small and regular purchases, while other methods like mobile money are used more for digital purchases.

The study shows that Kenyan youth mostly use their mobile money for gambling and betting and PayTV averaging 82 percent, 71 per cent for home internet.

In Africa, mobile money had a 28 per cent average use rate across the categories and countries.

The study indicates that only 14 per cent of debit and credit cards are used for paying video streaming, 10 percent for insurance premiums, five percent for betting, and zero for nicotine spends.

Debit and credit cards were only used for 10 percent of payments overall, which demonstrates their low usage in Africa.

Video streaming payments were the most popular category for debit or credit card use, followed by insurance premiums.

Debit and credit cards were least used for groceries, transportation, clothing, and nonalcoholic beverages.

In Kenya, bank deposits top payment categories for school fees at 44 percent, insurance premiums (25), housing (23), and savings (22).

School fees also tops priority list of youths in Uganda at 43 percent, and Tanzania at 35 per cent.

Bank accounts were the most popular savings platform overall while mobile money accounts came in second.

Overall, reasons for savings were distributed as follows: emergency at 18 percent, future use (17 percent), education (11), and accumulation of money (7 percent).