Poverty, distance cited as key hurdles to finance inclusion

Thursday, March 13, 2014 — updated on December 25, 2020 - 2 min read

CBK Governor Njuguna Ndung’u (left) with FSD Kenya director David Ferrand during the release of the results of the Geographical Information System (GIS) Special Mapping Project at the Hilton Hotel in Nairobi on Thursday. Photo/Diana Ngila

What you need to know:

Study reveals why affordable services continue to remain out of reach for the poor.

Poverty and distance are the biggest constraint to accessing financial services in Kenya, a new survey shows.

Currently, 77 per cent of Kenyans are within five kilometres of financial services, putting the country ahead of Uganda, Tanzania and oil-rich Nigeria where similar surveys have been done.

“This (survey) affords us more in-depth knowledge on how to address the challenges we face in expanding financial inclusion and ensure that the majority of our people access and use affordable, appropriate and sustainable financial services,” said Central Bank of Kenya Governor Njuguna Ndung’u.

The survey done by the Financial Sector Deepening Trust (FSD) and the Central Bank of Kenya (CBK), shows that most residents of Nairobi, Mombasa and Kirinyaga can access financial services within three kilometres.

Samburu, Tana River, Mandera and Turkana — Kenya’s poorest counties —had the least proportion of population within three kilometres of financial access.

The FSD surveys showed that within a distance of five kilometres Tanzania, Uganda, and Nigeria had between 35 per cent and 47 per cent of their populations within access of financial services.

Prof Ndung’u said the Geographical Information System (GIS) Special Mapping Project would help the private sector to know about market conditions and opportunities.

The study would also help track the impact of initiatives and products aimed at deepening access to financial services and poverty reduction.

The study found Kenya had 162 financial outlets per 100,000 people compared to 49 in Tanzania, 63 in Uganda and 11 in Nigeria.

In Nairobi and Mombasa the entire population fell within three kilometres of an access point but 9.1 per cent of the population in Nairobi was still excluded from any kind of financial services.

Isiolo and Nyeri had the same level of access of 35 per cent but only 21 per cent and 74 per cent of the population, respectively, used the services; bringing home the poverty factor.

“Access points are still biased towards the wealthy. Financial access points tend to be located away from areas of high poverty levels,” said the report.