April 2020

01Apr

Kenya’s retirement benefits eroded by coronavirus

Pension managers in Kenya project depressed growth of retirees’ funds due to the coronavirus pandemic that has negatively impacted the financial markets. About 17.5 per cent of retirees’ money was invested in quoted securities at the Nairobi Securities Exchange as at December 2019. This amounted to $2.1 billion, up from $1.8 billion in 2018. In its 2019 industry report, the Retirement Benefits Authority (RBA) said: “The growth in the retirement benefits sector is projected to drop in the...

April 1, 2020
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March 2020

25Mar

Kenya. Covid-19 test to our social protection system

As the world grapples with the Covid-19 global pandemic, the government has set in motion a raft of measures designed to not only arrest the spread of the coronavirus disease in Kenya but also ameliorate its negative financial and economic impact on the population. Read also Kenya’s Pezesha wins CATAPULT: Inclusion Africa 2020 bootcamp Many governments in the developed world are at different stages of deploying a variety of financial and social assistance mechanisms to help its citizens and business...

March 25, 2020
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23Mar

Kenya’s Pezesha wins CATAPULT: Inclusion Africa 2020 bootcamp

Thirteen Africa-focused fintech startups took part in CATAPULT: Inclusion Africa 2020, which helps companies focusing on financial inclusion to scale. Developed by the LHoFT Foundation, the programme provided selected startups with access to a tailor made program with intensive mentoring, coaching, peer-to-peer learning and dedicated workshops. It culminated in a bootcamp, with Kenya’s Pezesha, a peer-to-peer micro lending marketplace that connects lenders with high quality, underserved, low income borrowers, named overall winner. The other selected startups included three from...

March 23, 2020
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February 2020

25Feb

Kenya. RBA in fresh bid to protect early retirees from spending their pension savings before the age of 55

Pensions regulator RBA has embarked on a fresh bid to block employees retiring early from accessing half of their employer’s pension contribution. The Retirement Benefits Authority wants the law allowing employers to keep pensioner’s contributions until they are 55-years-old to be implemented. Read also Nigeria. Investing pension funds: Worries, prospects by stakeholders Through Legal Notice No88 of 2019, the National Treasury sought to amend the Retirement Benefits (Occupational Retirement Benefits Schemes) Regulations 2000, to effect the changes. Read...

February 25, 2020
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January 2020

22Jan

IMF warns of Kenya’s pensions time bomb

The International Monetary Fund (IMF) has warned of a ticking time bomb in Kenya’s pension sector as the gap between retirement dues and actual savings continues to grow wider. Kenya, which in 2009 opted to delay the implosion by raising the retirement age for civil servants from 55 to 60, is now facing pension obligations that have ballooned to Sh2.6 trillion — about 30 percent of GDP. This is much higher than what Kenyans pay as taxes. The country’s...

January 22, 2020
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November 2019

22Nov

Kenya. Pension crisis as 50,000 government staff retire

The retirement of about 50,000 civil servants is burdening taxpayers after the pension bill jumped by 63.03 percent or Sh10 billion in the first four months to October as the Treasury raised the red flag over the rising expense. Read also Less than 10pc Kenyans to retire comfortably on pension Treasury data shows that public pension expenses stood at Sh27.8 billion in the four months to October compared to Sh17.06 billion a year earlier — making it the fifth largest...

November 22, 2019
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19Nov

Less than 10pc Kenyans to retire comfortably on pension

Less than a tenth of pension schemes are providing sufficient benefits to comfortably sustain members in retirement, an actuarial consulting firm says, revealing the pain retirees undergo despite making lifetime savings while employed. According to the survey done by Actuarial Services East Africa (Actserv), retirees in defined benefit schemes have it worse than their counterparts in contributory schemes. The firm measured the adequacy of benefits using a ratio of income after retirement to income immediately before retirement, with an...

November 19, 2019
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October 2019

16Oct

Kenya. Pensions uptake low as returns increase

The country’s pension penetration remains at a 15 per cent low despite returns growing at an average 10.7 per cent annually over the past six years. According to a report by Cytonn Asset Managers the retirement benefits assets under management in the pension funds industry grew eight per cent to Sh1.2 trillion as of December 2018. The report shows fund managers are still relying on traditional, low-risk assets such as government securities and equities which cumulatively accounted for 56.7...

October 16, 2019
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September 2019

27Sep

Linking financial services and social protection for resilience: lessons from Kenya

Climate-related shocks and stresses threaten people and communities around the world, compounding existing poverty and vulnerability and undermining long-term development. National and international actors are searching for new and better ways to help people deal with increasing climate risks and, in turn, support long-term resilience. One potential way of doing this is to facilitate access to, and use of, adequate financial services such as savings, loans and insurance in underserved communities. The role of social protection (SP) programmes in helping...

September 27, 2019
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13Sep

Kenya. Treasury to introduce risk policy for financial markets

•The micro-prudential banking policy is expected to mitigate risks likely to emerge during downturns in key sectors including banks, pension schemes, insurance and capital markets to safeguard capital and liquidity adequacy. •According to National Treasury CS Ukur Yatani, the banks should assess the market to ensure that competition viewed as a sign of market dynamism, does not pose as a potential source of new risks that will have adverse consequences in the future. The National Treasury is formulating...

September 13, 2019
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