Financial inclusion up 75 pc on mobile money, survey shows

Three out of every four Kenyans have access to formal financial services through commercial banks, registered microfinance institutions and mobile money, a new World Bank survey shows.

According to the survey conducted last year but whose results were released Tuesday, financial inclusion in Kenya has risen to 75 per cent from 42 per cent in 2011 when the last poll was conducted.

The main reason for the jump in financial inclusion is the widespread use of mobile money which requires formal registration of account holders similar to what is done in a commercial bank.

In sub-Saharan Africa, those included in the formal financial sector amount to 34 per cent, up from 24 per cent in 2011.

“In 2014, 75 per cent of adults reported having an account, up from 42 per cent in 2011. This growth has been driven primarily by mobile money accounts,” the report said.

The breakdown of overall accounts ownership showed that 16 per cent of Kenyan adults report having a financial institution account only, 39 per cent said they had both a financial institution and mobile accounts, while 19 per cent had a mobile money account only.

“Kenya leads the world in mobile money penetration and shows how mobile accounts can increase financial inclusion, especially among the poor and the women,” said the Bretton Woods organisation report.

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The survey was conducted to assess the level of financial inclusion in terms of the extent to which households and businesses have access and can effectively use financial services that are provided responsibly and sustainably in a well-regulated environment.

“Financial inclusion is critical in reducing poverty and achieving inclusive economic growth. When people can participate in the financial system, they are better able to start and expand businesses, invest in their children’s education, and absorb financial shocks,” said World Bank’s consultant Dorothe Singer.

Ms Singer presented the results at a breakfast meeting held at the Nairobi Serena Hotel. The survey was done globally involving 150,000 people in 143 countries.

Gender gap

The survey on Kenya found that the gap in inclusion between men and women has not narrowed significantly. Seventy-one per cent of women have an account compared to 79 per cent of men, up from 39 and 46 per cent respectively in 2011.

“The study found there is a persistent gender gap of eight percentage points. This is in line with a persistent global seven percentage point gap in account ownership and a persistent nine percentage point gap in developing economies,” the report added.