Two Steps Back: How Low Income Kenyans Think About and Experience Risk in their Pursuit of Prosperity

This paper explores how low income respondents in Kenya Financial Diaries experience and prepare for risks in their lives. It considers ways in which risk reduction and management interventions could reduce their vulnerability in important ways. The analysis draws on data and insights from the Kenya Financial Diaries project, which tracked 300 households’ cash flows, contextualized in their larger life histories, and supplemented with a specific risk related survey. Key highlights for risk management among low income people include:

• Low income people should make tradeoffs between investing and risk management;
• Linking payments to provider treatment directly can enable better monitoring of diagnoses and prescriptions to check for adherence to protocols;
• To make insurance work, customers should be made to feel that their investments deliver value in the present, not just if and when tragedy strikes sometime in the future;
• Interaction with healthcare providers should be such that it is translated into a learning experience for patients helping them take greater control of their own preventive health care;
• Government’s efforts to extend access to preventive care and the reach of social safety nets can provide low-income people with more predictable futures around which it is much easier to plan.