By the numbers (Part 2): Estimating market sizes for informal group savings in Kenya, Malawi and Zimbabwe

by 18th Mar 2016
Members of the Tusoy Youth Group savings and loan association in Embu, Kenya Members of the Tusoy Youth Group savings and loan association in Embu, Kenya

As outlined in my previous blog, with so many people in all three countries preferring informal saving methods to banking, how large are these markets? How much total capital do they possess? And what can we learn from this?

Informal savers, in numbers

Let’s begin by putting the proportions outlined in my previous blog into population figures. Note that all of these figures are based on 2014 censuses.

  • In Kenya, 39.9% of adults represents 10,359,927 people.
  • In Malawi, 28% of adults represents 2,556,685 people.
  • In Zimbabwe, 17.8% of adults represents 1,582,991 people.

Table showing informal savers in Kenya, Malawi and Zimbabwe 

Across the three markets, the total number of savers using a group or another outside informal method is roughly 14.5 million. How much capital do they have collectively?

Calculating collective capital

For the sake of simplicity and a lack of specifics surrounding methodology and savings figures, we will make the following two assumptions:

  1. All those “saving with a group or a person outside the family” have the same individual savings levels as those in organised savings groups; and
  2. The small sample of publicly-available data on programme-based savings groups reflects the capital savings of those in the entire category.

For more accurate estimates to be made, more detailed data collection and publication of project figures must be made in the financial services sector and by savings-programme facilitators. Nonetheless, based on the available data, the market size calculations are as follows:

Table showing market size of savers in Kenya, Malawi and Zimbabwe


Based on the publicly-available figures from the Savings Groups Information Exchange, the average savings per savings group member in Kenya are US$ 18.98. If we project that amount out to the total number of Kenyans who save in a group or outside the family (10,359,927), the total savings capital is US$ 196,631,412.


Based on the publicly-available figures in Malawi from the Savings Groups Information Exchange, the average savings per savings group member in Malawi are US$ 20.05. Projected out to the national population of informal savers in this category (2,556,685), we can estimate a total of US$ 51,261,534.


Based on 2016 programme figures for Zimbabwe published in the Savings Groups Information Exchange, the average total savings per savings group member are US$ 31.54. If we scale this figure up to the total number of adults saving in a group or outside the family (1,582,991), we calculate US$ 49,927,536 of funds in this category.

The estimated total funds circulating informally via external or group savers in Kenya, Malawi and Zimbabwe is US$ 297,820,482.


There are several key insights to be taken away from these analyses and projected estimates.

First, measuring financial inclusion by account ownership does not accurately correlate with account usage. Based on the World Bank data, a large proportion of savers with bank accounts are not using them to protect their personal finances. This trend persists across Kenya, Malawi, Tanzania and Zimbabwe, and likely in other African countries as well. Measuring usage is a more reliable way to understand whether formal financial services are meeting the financial needs of the rich and the poor.

Second, accurately estimating market sizes for informal savers requires more reporting and transparency from facilitating organisations. More information on databases such as the Savings Group Information Exchange can help financial service providers gauge the market size and potential and conduct cost-benefit analyses of targeting informal savings markets. Without more figures, targeting these groups will continue to be perceived as high-risk despite the large, growing amounts of capital found there.

Third, there is a cross-market trend of saving money which, from 2011 to 2014, significantly outpaced savings group and formal banking growth. The precise savings methods are currently unspecified, therefore a more thorough analysis of saving, especially for low-income savers, would bring more insight about this trend.

Fourth and finally, in population terms, saving money in savings groups or with someone outside the family is rapidly outpacing formal financial account usage. These savers collectively hold tens of millions of dollars, possibly hundreds of millions in larger countries, which circulate informally yet systematically. Across the three markets covered in this blog, the average saver in this category saved US$ 20.54, and they collectively hold almost US$ 300 million.

As the financial services industry grows increasingly complex, most notably in Africa, the time for banks to commit to serving these groups is now. The economic potential held within informal savings groups is no longer a secret, and therefore can no longer be ignored.

Read By the numbers (Part 1): Comparing financial inclusion and savings habits in Kenya, Malawi and Zimbabwe.

Nathan Randall

Nathan Randall was formerly a Financial Inclusion and Linkages Analyst for CARE Access Africa based in Dar es Salaam, Tanzania. He supported CARE’s efforts to link savings groups with banks in Kenya and Tanzania, collecting and analysing data from rural savings groups and financial services providers to evaluate linkage performance and help improve our models. Nathan holds a Bachelor’s Degree in International Business from Carleton University in Ottawa, Canada, and is a current participant in the Aga Khan Foundation of Canada’s International Youth Fellowship Program.