The number of Kenyans with more than Sh100,000 as savings in their bank accounts has come down for the first time in more than 13 years. That is indicative of the cash flow problem being faced by the country, which is causing considerable hardships to the ordinary people. Affected by job cuts and modest economic activity, the country is in a difficult economic trajectory.
Central Bank of Kenya (CBK) data will be released next month. It is expected to show that savers with more than Sh100,000 in their bank accounts dropped to 1,450,000 last year, down from 1,583,000 in 2017. This sin the first fall since 2006 when the regulator began making public such deposit data. The reasons for slackness in saving are mainly low exports and corporate profitability followed by job cuts and creeping inflation.
Bankers complain that deposits with them from the high net worth depositors have taken a massive haircut and there is no sign of reviving the saving proportion to the earlier level. This had a chain reaction in the decline/deceleration of credit off-take from the institutional sources. Also, there are reports that banks have denied loans to individuals and small firms on account of the loans going high risk due to the poor repaying capacity of the borrowers.
