Kenya scores high in financial inclusivity

Wednesday March 23 2016

A customer prepares to Lipa na M-PESA at an Uchumi Langata Hyper counter on January 27, 2015. Safaricom and MTN Uganda on Monday  signed a partnership deal allowing money transfers on their networks. PHOTO | DIANA NGILA

A customer prepares to use the Lipa na M-PESA service at an Uchumi counter in Nairobi on January 27, 2015. PHOTO | DIANA NGILA | NATION MEDIA GROUP NATION MEDIA GROUP

By BRIAN NGUGI
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Kenya is rated the third most financially inclusive country in Africa, the Central Bank of Kenya said on Tuesday.

CBK Deputy Governor Sheila M’Mbijiwe said the country is only outpaced by Mauritius and South Africa, which lead the continent in the second and first positions respectively.

“Kenya has real reason to celebrate as regards financial inclusion. To date Kenya has the third highest rating in Africa in financial inclusion after Mauritius and South Africa.

We have 75 per cent financial inclusion, which means that for 90 per cent of Kenyans they are within three kilometres of a financial access point,” said Ms M’Mbijiwe.

Access points could be brick and mortar banks, agency outlets or mobile money transfer shops.

The CBK official said the direct impact of the financial inclusion whose parameters are gauged by the ability of individuals to access basic banking services, has seen significant drops in poverty among previously unbanked Kenyans.

INEQUALITIES

Ms M’Mbijiwe, however, said despite the banking gains secured there is need to address inequalities in access to financial services across the country.

“Going forward, there are challenges that we need to look into. We need to look at the equity at which financial inclusion has occurred. In the urban areas, it is more successful than the rural areas and also women have far less access compared to men,” said Ms M’Mbijiwe.

The deputy CBK governor spoke on the sidelines of a high level financial inclusion forum being held in Nairobi and which has brought together a wide range of economic experts and financial regulators from around the world.

Speaking at the conference, former CBK governor Njuguna Ndung’u - under whose eight-year reign the bank regularised use of innovative financial technologies such as mobile money transfer service M-Pesa - said financial inclusion is a key policy instrument to tackling widespread poverty in developing countries.

A report released at the conference by the American think-tank Centre for Global Development titled Financial Regulations for Improving Financial Inclusion singled out regulation as a hindrance to deepening financial access.