A common man appeal would be the best tactic here since it is relatable , for instance , the public vaccination of mama mboga in the estates or matatu touts at the bus stations . To build early vaccine confidence and literacy , it is crucial to maintain the right balance between educating individuals about the importance of universal vaccine coverage and avoiding any suggestion of coercion .
Nudging for Tax Compliance
Effective tax collection is crucial for the good functioning of the financial system of a country . Nobody likes paying taxes , and as they say , only taxes and death are guaranteed in life . Even the good book , the Bible , encourages us to give to Caesar what is Caesar ’ s .
Right now , it is that season again when we are required by law to file our annual tax returns , the deadline being June 30th . Communication notices from the country ' s tax collector leave one in awe . The notices are usually full of threats . Consider this one : If you do not pay your due taxes , you will be penalized X amount .
Contrary to the current practices , communication from tax collection agencies should make paying taxes feel gratifying and trigger voluntary compliance . They should paint a clear picture of where tax collected goes to , for example , a recently built road that eases transportation , a new school built by taxes , a new level five hospital , free
To build early vaccine confidence and literacy , it is crucial to maintain the right balance between educating individuals about the importance of universal vaccine coverage and avoiding any suggestion of coercion .
Did you know that insurance uptake in Kenya is only 4 %? Why is insurance penetration extremely low in our country yet we are faced with a lot of insurable risks ? One reason is the lack of trust in insurance companies by customers . This is characterized by nonpayment of claims or tiresome processes and time taken before a claim is paid .
education etc . Such messaging would trigger honest individual to pay up their taxes because they know the impact of their tax contributions .
Here is an example of how nudging can improve tax compliance : ‘ Thank you , Geoffrey , for paying your tax on time . The money that was collected from you and others last year has enabled us to complete the Level 5 hospital in your county at cost of KES 400 million . The hospital is fully equipped with a bed capacity of 500 .’
Such messaging will encourage any taxpayer to pay up their taxes when they are due . As a result , the number of people paying their fair share of taxes will also increase and ultimately , we will receive more money for development projects across the country .
Nudging in Credit Repayment
Mischievous borrowers treat credit as gifts and borrow with no intentions of paying it back . This leads to huge losses by lenders , an increase in non-performing loans and ultimately increases the cost of credit . Consequently , some lenders have resorted to some uncouth collection tactics to recover their money , for instance , texting key people in one ’ s contact list to compel and shame loan defaulters . Lenders rely on credit reports which show how you went about repaying your past borrowings . Thus , building a good credit report makes access to credit easy .
The most popular nudge employed by credit collectors is waivers on interest . This is an expensive method to the lenders in the long run but promises quick repayments and reduces bad debts . This is applicable mostly with Higher Educations
Loans Board and County government land rates .
The presence of Credit Reference Bureaus in the credit market has also served to deter serial defaulters from playing their tricks on lenders . CRBs serve as registry whereby all lenders submit information on the performance of credit contracts making it easy for lenders to determine the character of borrowers . Borrowers with good credit records are rewarded with easy access to loans and borrowers with poor records have an uphill task when it comes to credit access . As a borrower you are entitled to an annual Free Credit report for you to know what information has been submitted to the bureau by Lenders about you .
Nudging in Insurance
Did you know that insurance uptake in Kenya is only 4 %? Shocking , indeed . But why is insurance penetration extremely low in our country yet we are faced with a lot of insurable risks ? One reason is the lack of trust in insurance companies by customers . This is characterized by nonpayment of claims or tiresome processes and time taken before a claim is paid .
In Kenya , insurance companies operate under a lot of mystery . There is a lot of misleading information that circulates among friends and relatives on the negative side of insurance . This discourages subscription and thus impacts negatively on the uptake and penetration of insurance products . However , good marketing strategies whose implementation tactics are weaved with nuggets of nudge theory will make potential customers knowledgeable . This in turn will create trust .
Many insurance salespeople sell fear ( negative reinforcement ) rather than
40 MAL42 / 21 ISSUE