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The Impact of the Global Financial Crisis on the Kenyan Retirement Benefits Industry

22 Pages Posted: 18 May 2011  

Nzomo Mutuku

Retirement Benefits Authority

Date Written: June 30, 2010


The global financial crisis of 2007/2009 was triggered by the collapse of an asset price bubble in the housing market in the United States particularly in the sub-prime mortgage market. The collapse was soon followed by a credit crunch which was in turn followed by a liquidity crisis, a solvency crisis and eventually a global recession.

Developing country economies were initially insulated from the crisis due to their limited integration in the world financial markets. Eventually developing countries were also drawn in, initially through first round effects as a result of portfolio outflows and declining capital markets and then through second round effects when the crisis impacted on the real economy.

The retirement benefits industry in Kenya, though a long term industry, is not immune to the crisis and has certainly been impacted by both first and second round effects. This paper seeks to identify the key impacts of the crisis on the Kenyan retirement benefits industry and to identify short run mitigating policy strategies as well as long run policy measures to cushion the industry from future crisis.

Keywords: Financial crisis, Pensions, Kenya, Retirement Benefits, Long term savings

JEL Classification: O16, G23

Suggested Citation

Mutuku, Nzomo, The Impact of the Global Financial Crisis on the Kenyan Retirement Benefits Industry (June 30, 2010). Available at SSRN: or

Nzomo Mutuku (Contact Author)

Retirement Benefits Authority ( email )

P.O. Box 57733
Nairobi, Kenya, NAIROBI 00200

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