An Inclusive pension model for Kenya’s informal sector with late entries and early exit rates
| dc.contributor.author | Lagat, Cherono Asumpta | |
| dc.date.accessioned | 2023-06-08T10:40:48Z | |
| dc.date.available | 2023-06-08T10:40:48Z | |
| dc.date.issued | 2019 | |
| dc.description | Submitted in partial fulfillment of the requirements for the Masters of Science in Mathematical Finance at Strathmore University | |
| dc.description.abstract | The purpose of this study is three-fold: first, we develop 1'1 pension model that uses preretirement mobile phone airtime expenditures to accumulate the pension fund. Secondly, we · calculate the exit and entry rates into the comprehensive pension scheme. Finally, we determine the expenditure patterns experienced post-retirement and use these patterns to advise on the daily amount required to be charged per minute above the current rate in order to facilitate a comfortable post-retirement life. The data utilized in this study was retrieved from various secondary sources. Inflation and interest rates data -were retrieved from Kenya's Central Bank database. The entry and exit data into informal pension schemes was retrieved from Eagle Africa the administrators of Mbao Pension scheme the largest informal pension scheme in Kenya. The mortality rates were retrieved from the World Health Organization and the life expectancy from ·world Atlas, Lancet and World Life Expectancy. Pre-retirement data was retrieved from November 2013 from an integrated survey on land ownership and tenure, provision, access and control of basic services, asset ownership, financial resources, evictions and demolition of houses, as well as thirty-two key informant interviews with informal small-scale service provider’s facilitated by Strathmore University. The inflation and interest rates were forecasted using ARIMA (1,9,5)-GARCH (0,1) model while the backward entry and exit data points were simulated in R. Our results show that an unemployed Kenyan spends approximately KShs. 2, 000.37 a month considering inflation this amount will translate KShs. 4, 025.45 to maintain the same life style post-retirement assuming the person joins the scheme at 18 and exits at the age of 55. Given the expenditure pre-retirement of this group of people, it will require them to be charged KShs. 3.41 per minute above the current rate in order to raise an amount sufficient to sustain their lifestyle post-retirement. | |
| dc.identifier.uri | http://hdl.handle.net/11071/13307 | |
| dc.language.iso | en | |
| dc.publisher | Strathmore University | |
| dc.title | An Inclusive pension model for Kenya’s informal sector with late entries and early exit rates | |
| dc.type | Thesis |
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