The real interest rate is that part of the interest rate which is not absorbed by inflation. And if we look at real interest rates, the current situation is not that unusual. Real interest rates in Germany between 1974 and 1981 and between 1989 and 1994 were almost always negative – it just felt different because the interest rates on paper were positive.
The Financial Diaries give us an opportunity to consider these issues of stability, efficiency and inclusion in a very different light, through the eyes of low income Kenyans, and in many ways it shows us that those goals for financial sector are really quite intertwined.