Kenya’s financial inclusion landscape has experienced a considerable and positive transformation during the 2006-2013 period.

Its financial system increasingly offers a more diverse range of financial services and products to citizens, and covers a broader geographical area that extends beyond the nation’s borders. These advances have strengthened the banks and created a wider market, according to Central Bank of Kenya (CBK) Governor Prof. Njuguna Ndung’u.

“These developments are a testimony to the strength and vibrancy of our banking sector (and have) contributed to Kenya’s financial development,” said Governor Ndung’u, who delivered the remarks during his keynote address at the Launch of the FinAccess National Survey 2013 Report on 31 October 2013 in Nairobi.

The survey results revealed the proportion of the adult population that use different forms of formal financial services has risen to 66.7 percent in 2013 compared to 27.4 percent in 2006. Similarly, the proportion of the financially excluded adult population has declined to 25.4 percent in 2013 from 39.3 percent in 2006.

According to the report, this is a vindication of policy strategies and reforms by the government as well as financial sector players’ initiatives and innovations. More people, especially the under-served and unserved segments, now access and use financial services and products by different providers.

“Equally and more striking, the proportion of the population using (informal) financial services has declined to 7.8 percent (in 2013) from 35.2 percent in 2006 and 26.8 percent in 2009,” said Governor Ndung’u.

The report went on to highlight that 5.4 million adults (out of 18.5 million) use banks while 5.2 million use informal services. Additionally, it noted 11.5 million adults currently use mobile financial services, which has become the most widely used type of financial service in Kenya.

Governor Ndung’u also covered the various steps CBK has taken to increase the efficiency and stability of the financial system. Specific examples included the encouragement of price transparency in financial services and government reforms designed to strengthen the legal, regulatory and supervisory framework. He closed his remarks with the observation that Kenya still has room to progress since approximately 25 percent of the population remain excluded from financial services.

On the African continent, Kenya has risen to claim the second highest level of financial inclusion after South Africa. The percentage of the population who use more than one financial service has also increased significantly from 19 percent in 2006 to 46 percent in 2013. This indicates nearly half of the population uses various combinations of services to meet their different financial needs.

The FinAccess 2013 survey is a product of the Financial Access Partnership — a public-private sector partnership between CBK, an Alliance for Financial Inclusion (AFI) member institution, and Financial Sector Deepening (FSD) Kenya.