New survey shows more Kenyans use digital financial services

Use of mobile money, mobile banking and digital apps has risen substantially with the latter having over two million users.

The 2019 FinAccess Household Survey launched on Wednesday further said that the use of Saccos, microfinance institutions and traditional banking has, however, gone down.

The survey was jointly conducted by the Kenya National Bureau of Statistics (KNBS), Central Bank of Kenya (CBK) and Financial Sector Deepening (FSD) Trust- Kenya

Speaking during the launch, CBK Governor Dr Patrick Njoroge said globally financial inclusions services have become an increasing source of valuable data and information that support evidenced-based policy.

The survey, he noted, will provide data that tracks progress and dynamics of financial inclusion landscape and provide data to various stakeholders, policy makers, private players and researchers.

“We take the global gold medal in financial inclusion. In Africa we are number three after Seychelles and South Africa with 95% and 90% respectively. We are making progress and direction is clear and swift,” he said.

However, the CBK governor noted that the two countries are not rural based like the Kenyan economy and so in terms of challenges of a rural based and agriculture based economy we are way ahead of other economies and this is remarkable .

He noted FinAccess survey which is the 5th in a series covered four dimensions namely access, usage, quality and impact.

The survey, he explained has new information on financial health and livelihood, perception and financial literacy and consumer protection which are key even for the regulators as it does not measure the aspect of quality and impact of financial inclusion.

“We have been saying the dynamics of Kenyan economy is largely driven by micro, small and medium enterprises and this survey continues with related questions on this, “ he said

He named the digital financial services showing strong growth due to mobile banking, saying that they have transformed Kenya.

The digital financial numbers are quite amazing, Dr Njoroge said noting that digital services have been taken lightly and yet other countries have been looking at our products and wanting to transform their digital banking and creating centres in their own countries.

Dr Njoroge added that according to the survey, Kenyans financial access has risen to 82.9% up from 75.3% and 26.7% in 2006 when the first survey was done.

This, he added, is significant and a remarkable jump in over a decade and this number is despite age, education, gender, residence and income gap, which is quite robust

According to the survey, only 11% of Kenyan adult population is completely excluded from financial production or institutions and this the government explained is good considering it was much larger at 41.3% back in 2006.

“This 11% if indirectly accessed through friends it comes to around 9%,” he said adding that this is quite interesting since most traditional marginalized regions are the ones who recorded the highest declines of excluding adults .

“North Eastern recorded a decline of 47.2%, upper eastern region 24.6% and coastal areas 18.6%, “ the governor said.

When it comes to financial services, Dr Njoroge said number of Kenyans using more than one type of financial service and products both formal and informal increased to 73.7% in 2019 compared to 18.8% in 2006.

Even as we continue to appreciate the survey, and what it does to aiding policy making , the Governor said that certain constants remain and thus to continue strengthening the measurement of financial inclusion landscape in terms of access and usage while incorporating new dimensions of a needs based framework that measures the relevance of financial services and products .

Dr David Ferrand of FSD said there has been evolution of fin access survey since inception as it tries now to develop a much deeper understanding.

This year’s survey, he noted, has put a strong emphasis on the role of finance in meeting the need and contribution to financial health of Kenyans that it provides.

He noted that Kenya has also retained its leadership in the continent in expanding access especially in the digital financial revolution.

However, Dr Ferrand said the qualitative research says that much as people continue to adopt formal financial instruments they play a limited role in peoples livelihoods.

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Kenya National Bureau of Statistics Director General Zachary Mwangi Chege said Kenya has made progress in fostering financial inclusion with the latest survey providing a 13-year perspective of financial landscape.