Kenya leads African peers in financial access - report
By Nicholas Waitathu | March 17th 2014
By Nicholas Waitathu
Kenya: Kenya has taken a great leap forward to enjoy better financial access compared to her peers in the continent. The country claims the second highest level of financial inclusion only after South Africa.
Kenya’s percentage of the population who use more than one financial service has also increased significantly, from 19 per cent in 2006 to 46 percent in 2013 according to the FinAccess 2013 survey.
The study indicates that the percentage of the population living within a 3-km distance of a financial access touch point is 58.7 per cent in Kenya. This is at a time when in Uganda it is at only 44.1 per cent, 42.7 per cent for Nigeria and 28.3 per cent for Tanzania.
Strength and vibrancy
“These developments are a testimony to the strength and vibrancy of our banking sector and have contributed to Kenya’s financial development,” said Central Bank of Kenya Governor Njuguna Ndung’u, during the launch of the FinAccess National Survey 2013 Report in Nairobi last week.
The report, he said reveals that diverse range of financial services and products to citizens have strengthened.
Launching the report, Prof Ndung’u explained that Kenya have greater access to mobile financial services providers compared to the banks. Much of this progress, he added, has been achieved through the extension of mobile money and bank agents that help increase the coverage of the population.
“In terms of financial access touch points per 100,000 people, Kenya has 161.7, Uganda 63.1, Tanzania 48.9 and Nigeria 11.4 per cent,” Ndung’u noted.
“For example, only 21 per cent of Kenyans live within 3- km of a bank branch compared to 59 per cent who live near an agent. This accounts for 23.64 million people compared to only 21.2 per cent representing 8.57 million living near a bank branch,” he added.
The survey results revealed that the proportion of the adult population that use different forms of formal financial services rose to 66.7 per cent in 2013 compared to 27.4 per cent in 2006.
Similarly, the proportion of the financially excluded adult population has declined to 25.4 per cent in 2013 from 39.3 per cent in 2006.
According to the survey, this is a vindication of policy strategies and reforms by the government as well as financial sector players’ initiatives and innovations.
More people, especially the under-served and un-served segments, now access and use financial services and products by different providers.
Equally, the proportion of the population using informal financial services has declined to 7.8 per cent (in 2013) from 35.2 per cent in 2006 and 26.8 percent in 2009.
The survey notes that Kenya has 5.4 million adults (out of 18.5 million) who use banks while 5.2 million use informal services.
Additionally, it noted, 11.5 million adults currently use mobile financial services, which has become the most widely used type of financial service in Kenya.
Governor Ndung’u said CBK has taken measures to increase the efficiency and stability of the financial system that include the encouragement of price transparency in financial services and government reforms designed to strengthen the legal, regulatory and supervisory framework.
The survey reveal that Kenya’s financial inclusion landscape has undergone major change. The proportion of the adults using various forms of formal financial services has risen to 66.7 per cent in 2013 from 41.3 per cent in 2009.
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