Kenya Financial Diaries

BFA, funded by FSD Kenya, undertook a comprehensive financial diaries study in Kenya. Over the course of one year, BFA designed a sample study for the low income population segments in Kenya which included the use of research instruments, provision of an implementation plan, presenting data and analyzing the collected data. Through elaborate analysis of the financial diaries data, BFA accomplished an in-depth understanding of financial behaviors and needs across a representative range of low-income population segments in Kenya, to inform market expansion, specifically the branchless models.

Getting change back at local shop


Problem Statement

A major gap in the ability of formal financial services to deliver value for low-income families is a general lack of information and understanding of their preferences, behaviors and needs. To address this gap, FSD Kenya in partnership with Bankable Frontier Associates and Digital Divide Data undertook a Financial Diaries study between 2012 and 2013.


The Solution

The Financial Diaries track the cash and non-cash monetary inflows/outflows of an individual or household in order to better understand their economic behavior. The Kenya Financial Diaries tracked the cash flows of 298 low-income Kenyan households, visiting the households every two weeks for 18 months. Information about income and spending habits, including wage data, day-to-day expenses, capital expenditures for businesses, and schooling costs were collected. By observing people’s financial behavior, the study provided a picture of how people use financial resources to open opportunities for themselves and to cushion themselves from the blows of shocks.


Findings and Key Takeaways

  • Households face both low incomes and high levels of volatility in earning and spending
  • Incomes are pieced together from multiple sources
  • With low incomes and high levels of uncertainty, the poor are more active money managers, not less
  • The financial management strategies of low-income Kenyans place a lot of emphasis on creating elasticity in the budget