Real Interest Rates and the Mobilization of Private Savings in Africa A Case Study of Kenya

"The objective of this paper is to test the hypothesis that real interest rates have a significant positive impact on financial and non financial saving in Kenya, which in turn support a higher level of investment. This is done by examining the propositions that private aggregate and financial savings in Kenya increase significantly with real deposit rates, and that the increase in financial savings is reflected in increased credit flow to the private sector. There is no consensus in the literature on the impact of real interest rates on aggregate saving. "