One in six Kenyans is financially excluded, a new survey has revealed.
According to Twaweza Kenya, this represents 15 per cent of Kenyans who do not have a bank account, mobile money account, insurance product or loan from a formal financial institution (bank, MFI or Sacco).
Findings of the study also show that financial exclusion is slightly higher in rural areas (at 18%) compared to urban areas where it stands at 12%.
Women are the most excluded standing at 17% compared to men who represent 13%.
As regards the economic status, the poorest citizens are more likely to be financially excluded than the rich.
Differences by age group are smaller, but 11 citizens aged 55 or over, representing 22% are slightly more likely than younger citizens (14 to 15%) to be financially excluded, the research adds.
One in 20 citizens (4%) has a bank account, mobile money, insurance and a loan from a formal institution while one in eight (12%) have three such products.
According to the survey, 38 per cent (four in 10 Kenyans) have one financial product.
To bridge the gap, the survey recommends that more inclusive policy strategies and reforms by the government and financial sector players’ initiatives and innovations (private and public) can help to ensure that more people are included.
Particular emphasis should be placed on the segments of the population that have been historically excluded from the formal financial sector, often because of income levels, volatility of income, gender, location, source of income and level of financial literacy.
In addressing financial inclusion, the survey says the untapped potential of those individuals and businesses currently excluded from or underserved by the formal financial sector can be harnessed.
Other findings are as follows:
• Half of all Kenyan adults have a bank account, either alone or jointly with someone else, up from 14% ten years ago.
• One-third of Kenyans have borrowed money in the past five years. Three-quarters (75%) of Kenyan adults are users of mobile money services, up from 62% in 2013.
• The number of users of mobile money services in Tanzania has overtaken the figure for Kenya.
• M-Pesa is the dominant provider of mobile money services, with a market share of 98% of all users.
• Three-quarters of mobile money service users are satisfied with the cost of the services provided.
The survey involved 1,739 respondents from the Kenya Sauti za Wananchi panel and was conducted between September 23 and October 11, 2016.