Financial access in Kenya has helped fight poverty in the country, Central Bank of Kenya (CBK) has said.
CBK deputy governor Sheila M’mbijiwe said the country is ranked third in the continent after South Africa and Mauritius which emerged second and first respectively.
The deputy governor said that Kenya has a reason to celebrate as regards to financial inclusion. Kenyans are accessing finances through banks, mobile money transfer shops and agency banking.
“We have 75 percent financial inclusion which means 90 percent of Kenyans are within three kilometers of a financial access point,” said Ms M’mbijiwe.
The central bank official was speaking on the sidelines of a high-level financial inclusion forum being held in Nairobi. The forum has congregated various economic experts and financial regulators from across the world.
A report titled ‘Financial Regulations for Improving Financial Inclusion’ by the American think-tank Centre for Global Development was released at the same event.
The report shows that as recent as 2011, only 42 percent of adult Kenyans had a financial account of any kind. However, by 2014, according to the Global Findex database, that number had risen to 75 percent, including 63 percent of the poorest two-fifths.
This progress has been brought about by the digital revolution in the recent decades, which has led to the development of new financial services and new delivery channels.
According to the 2015 FinAcess Geospatial Mapping Survey, the number of service points which include mobile money transfer service kiosks, bank and insurance agents between 2013 and 2015 increased by 33 percent in Kenya.
The survey indicates that there are now 218 service points for every 100,000 people up from 162 outlets in 2013. The report said that the transformation has been facilitated by “improved infrastructure, technological innovation, institutional developments as well as financial system policy and regulatory reforms.”
In the backdrop of such progress, the CBK official said that access to basic banking services has seen substantial drops in poverty among Kenyans who were previously unbanked.
Despite the banking advances, she said that there is a need to address existing gaps in the access to financial services. She noted that urban areas had more successful financial inclusion stories than in the rural areas. Moreover, women have less access than men.
On his part, the former CBK governor Njuguna Ndung’u, said financial inclusion is a key policy instrument for addressing the widespread poverty in developing countries.
In spite of the tremendous growth, the report released at the conference noted that poor regulations hinder the progress of financial access.
“Poor regulation is one of the major obstacles to financial inclusion. Others include lack of good infrastructure, weak institutions and poor cooperation, and unstable economic and political conditions,” read part of the report.
Image credit: Flickr/Rosenfeld Media