In developing markets, it's super common for families to be borrowing money and saving money at the exact same time.
March 25, 2026
Original Paper
Savings and Credit Uptake in Kenya: A VAR Analysis
SSRN · 6343859
The Takeaway
This finding challenges the traditional economic view that people only borrow when they run out of savings. In Kenya, researchers found a bidirectional loop where getting a loan actually stimulates people to save more, and having savings makes them more likely to take a loan, flipping the standard 'save first, then spend' logic on its head.
From the abstract
In Kenya, the relationship between credit uptake (loans) and savings is complex. This study examines the relationship between credit uptake, measured by domestic credit to the private sector as a percentage of GDP, and saving rates, expressed as gross domestic savings as a percentage of GDP. Utilising methodologies such as Granger causality, cointegration, and vector autoregression (VAR), the findings reveal bidirectional causality between credit supply and saving rates. This near convergence in