One of the most impactful ways of empowering women and improving their livelihoods is by accelerating their adoption of formal financial services.
Known as financial inclusion, this ideal means citizens, including women, being able to access all formal financial products and services without any hindrance based on their gender, social, economic, or political considerations.
While informal devices, such as the ubiquitous Kenyan Table Banking and Chama (savings groups) are popular tools for achieving financial inclusion for women, formal products and services are preferred because of their anchor on better fiduciary structures and regulation.
Kenya is the most compelling theatre in the world where technology has been successfully harnessed to achieve financial inclusion among women and the entire population, and by extension, economic empowerment.
According to the FinAccess Survey of 2021, mobile money has played the biggest role in improving financial inclusion in Kenya over the years. Financial inclusion in Kenya currently stands at 84 per cent, having grown from 26.7 per cent in 2006. This means that out of every 100 Kenyans, at least 84 have access to formal financial services, thanks to mobile money.
The story of Kenya’s emergence as the cradle of mobile money, riding the crest of the nexus between banking and mobile telephone technology, started in 2007 when then Safaricom CEO Michael Joseph, armed with no more than raw ambition, and with no case study to pore over, embarked on the project of commercialising M-PESA. The rest is history.
Most Kenyans had their first interaction with formal finance through mobile money. To illustrate, as M-PESA grew from a mobile money transfer service to a full financial services platform offering services such as loans, savings and merchant payments, many leapfrogged to achieve financial inclusion. Inter-operability between mobile and bank accounts just served to close the loop.
Numbers eloquently tell a story of phenomenal growth. In the 11 months to November 2022, for instance, mobile money transactions grew by 15.2 per cent, compared to a similar period in 2021. The amount transacted grew from Sh6.24 trillion to Sh7.2 trillion over the same period. According to Communications Authority of Kenya data, active mobile money accounts doubled from 36 million at the end of October 2017 to 73.1 million at the end of 2022.
The Kenya Bankers Association’s Banking Industry Customer Satisfaction Survey 2022 shows that 67.8 per cent of consumers preferred mobile banking as a channel in 2022. Preference for human-assisted customer service rose from 12 per cent in 2021 to 16 percent last year, as people went back to banking halls.
Still, digital banking platforms – mobile and internet/online banking, have sustained their primacy as a key pathway to financial inclusion. There is work to be done to even out the disparities between the two genders when it comes to financial inclusion.
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-Ms Ngomeli is the Chief Operating Officer and Deputy CEO, Redhouse Group