Are low-income workers financially irresponsible? Analysing financial literacy and over-indebtedness in Nairobi

Studies on financial inclusion place a strong emphasis on financial literacy and individual financial responsibility. Over-spending and over-indebtedness are often thought to be consequences of a lack of understanding of prudent budgeting, saving, and investment. Building on the critical accounting and everyday financialisation frameworks, this study challenges those claims. Using the FinAccess 2021 survey and interviewing 30 low-income workers in Nairobi, Kenya, we find indications that many are financially literate. In fact, participants report several strategic techniques to save on costs, such as splitting transactions on M-Pesa to avoid fees. Yet, as their income is low, these individuals often find themselves indebted for sustained periods, particularly for basic needs such as food and transportation. Furthermore, where individuals show signs of over-indebtedness, these seem to be consequences of structural and income constraints rather than a lack of understanding of money management practices. Our article critiques established understandings of financial knowledge by presenting new evidence on everyday financial practices in Nairobi. Our results suggest that financialisation of everyday life has spread to countries beyond the Global North and might have severe consequences for development goals.