The Central Bank of Kenya has cited the low uptake of identification documents by the youth and retrogressive cultural practices restricting women as the key threats to Kenya growing its financial inclusion rate beyond the current levels.
Findings in the 2021 FinAcess Survey found that the level of financial access rose by 0.8 percentage points to 83.7 percent between 2019 and 2021.
Speaking in a web forum organised by the International Monetary Fund (IMF) on Friday, CBK governor Patrick Njoroge said that the regulator had anticipated that inclusivity would jump by a bigger margin in the period, but the impediments facing youth and women slowed this down.
Young people attaining the age of 18 failed to get identity documents as most were homebound due to the Covid-19 pandemic, hence they continued to use the phones registered in their parents’ names—which did not qualify them to be considered financially included.
“There are two major impediments in this. The first is social norms, particularly for women who are not allowed to have cell phones or mobile wallets of their own—it’s registered in the name of the husband. That qualifies as being outside of the system because you don’t have an identity of your own,” said the governor.
“This ID issue is significant. During Covid-19, it turns out that the youth were just at home and there was no pressure on them to go get their IDs…hence our numbers were not as significant as we expected.”
The rapid growth in Kenya’s financial inclusivity prior to 2019 was majorly driven by the wide adoption of mobile money—mainly Safaricom’s M-Pesa platform— that brought many who were previously unbanked into the formal financial system.
Financial inclusivity stood at s 26.7 percent in 2006, but after the introduction of mobile money in 2007, this rose to 82.9 percent in 2019 and 83.7 percent in 2021.
The dynamism of the mobile systems, which also allow merchant and bill payments on top of cash transfer services has also helped drive their usage, where they complement normal cash payments.
According to Dr Njoroge, retention of the financially included remains a key objective, with more affordable smartphones in order to benefit from the evolving digital financial ecosystem.
