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Surviving 2020: Lessons on Resilience from Kenya’s Covid Diaries

For this project, BFA and FSD Kenya conducted four rounds of interviews over the phone with about 200 respondents from the Kenya Financial Diaries between March and December to understand how ordinary Kenyans were affected by the COVID-19 shock. After a period of severe stress in June, most households recovered to modest levels of stress with incomes allowing for survival, but still well below pre-Covid levels.

While nearly all families were stressed throughout the study, by September, there was an increasing divergence in the sample with higher-income, diversified households taking advantage of low wages to make new investments and some of our worst hit households—often salary-dependent workers who lost jobs—seeing their fortunes continue to deteriorate.

Formal relief measures played only a small role in household resilience. Instead, households coping best with the shock benefited from diversified informal income streams catering to local demand, resilient forms of social finance (through shopkeeper credit, rent arrears, savings groups, and domestic remittances), and low-investment, low-expectation subsistence agriculture.

FSD Kenya
We support the development of financial inclusion in Kenya. Our work ranges from direct investment in market innovations to research and policy analysis. Everything we do seeks to harness financial solutions to meet the needs of lower income households and smaller scale businesses – to help them to manage scarce resources and invest in the future. In short, our aim is to make financial markets work better for the poor.