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Kenya – Financial Access Study

This study conducted by the Steadman Group in Kenya explores the outreach of financial service providers, financial access, and the usage of savings, credit, money transfer, and insurance products. It also examines the role of informal groups, technology, and youth in financial access. The study analyzes data on bank account usage by province, characteristics of the banked and unbanked populations, and the usage of various financial products.

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Kenya – Financial Access Study

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  1. Kenya – Financial Access Study Performed by the Steadman Group

  2. Methodology • Distribution of the samples (individuals aged 16 and over) • Sampling based on the CBS NASSEP IV sampling frame • Drawn from all 69 districts • Random selection of cluster, household and individual • Sample size achieved of 4,218

  3. Results overview • Outreach of financial service providers • Financial access strand • Usage of savings, credit, money transfer and insurance • Informal groups • Technology • Youth

  4. Outreach of financial service providers

  5. Financial Access Strand

  6. Bank Account Usage by Province

  7. Most of the banked work: for a wage in a large establishment in their own business Most of the unbanked get income by producing food crops transfers from family / friends Financial access bymain source of income

  8. Majority of the banked: are male have secondary education or higher own a mobile phone Most of the unbanked: are female . more likely to have little education have no access to a mobile phone Characteristics of the banked / unbanked

  9. Usage of savings products

  10. Usage of credit products

  11. Usage of money transfer services • Transfers within Kenya • Mostly informal using family / friend or matatu • Transfers outside Kenya • Mostly formal using transfer agencies or a bank account

  12. Usage of insurance products *multiple responses were spontaneously mentioned by interviewees

  13. Informal groups • Typical group activities – • Give one member all monies collected in one round • Raise money for emergencies • Raise money for funerals • Lend money to members when they need it

  14. Mobile phone usage

  15. Youth – 16/17 year olds Source of income • 5% with formal services • 2% with indirect access through guardian • One in three earn a living in agriculture

  16. Analysis of the Data

  17. Supply: banking services follows formal economy…

  18. Supply bank penetration is driven by the size of the market

  19. Informal finance: Formal and informal finance are not substitutes

  20. Informal finance Banked and unserved use of informal credit and savings equally

  21. Financial “Exclusion”Factors: • Cost / Affordability • Low incomes / cash balances (not worth banking • Access barriers (opening / minimum balances) • Transactions costs (transport, time) • Availability of Informal (cheaper) alternatives • Shopkeepers / suppliers: credit • Friends, family, savings, credit, insurance, remittances. • Matatu / buses: remittances • Unavailability (Northeastern)

  22. Increasing outreach &demand: • Cost cutting innovations to make affordablebanking services commercially viable • Cellular phone banking • Alternatives, low cost outlets, agencies. • Product innovation e.g. over the counter savings products. • Promoting SACCOs outside formal employment / cash crop agriculture • Promoting payments / savings oriented MFI’s.

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