Financial Exclusion in Kenya: An Analysis of Financial Service Use

This report analyzes the impact of various socio-economic, demographic and geographic factors on access to financial services in Kenya. It is based on data from the FinAccess Survey 2006.

The report states that factors affecting access to financial services extend beyond those related to income, wealth and education. It highlights the need for policymakers to identify major barriers to accessing particular services, and to consider how to enable poor people to overcome these barriers. Findings include:

• Employment and main source of income is a key influence on financial inclusion;Men, the elderly and educated people are more likely to use formal financial services, while women are more likely to use informal services;
• Proximity to banks does not influence usage of services;
• Rural people are more likely to use Savings and Credit Cooperatives;
• Owning a car, TV or mobile phone increases likelihood of using formal services;
• Characteristics of market segment using formal services are easily identifiable;
• Informal services contribute the major share to financial inclusion.

The report concludes with policy recommendations to promote financial inclusion.