Kenya tops the world in financial inclusion, with latest reports giving the country a rating of up to 86 per cent above global heavy weights like Brazil.
According to the 2017 Brookings Financial and Digital Inclusions Project Report released early this week, the country emerged top among 26 countries that provide easy access to financial services to under-served people, beating Brazil, South Africa and Nigeria who scored 79, 78 and 74 per cent respectively.
The analysis was based on four dimensions of financial inclusions which saw Kenya achieve an 89 per cent score on country commitment, 89 per cent on mobile capacity, 94 per cent on regulatory environment, and 78 per cent on adoption of mobile money services.
The study came on the heels of the Oxford Business Group’s banking inclusion report which showed that 75 per cent of Kenya’s population live within a three kilometre radius of a financial institution.
The report shows that although commercial banks operating in Kenya have declined from 43 in 2015 to 41 this year, the country is way ahead of other leading economies in the continent like South Africa and Nigeria who have higher population. Only 22 commercial banks are operating in Nigeria against a population of 180 million while South Africa has 19 commercial banks serving 55 million people. Kenya’s population currently stand at 44.2 million.
‘’The figure is impressive given that much of Kenya’s population is dispersed, with lower urbanization rate of 25 to 30 per cent compared to Ghana and Nigeria who have close to 50 per cent but lower financial inclusion rate,’’ the report noted.
The country’s financial inclusion has been on an upwards trend, rising from 59 per cent in 2013 to 73 per cent in 2015 when the country had 1,523 bank branches. The inclusion rate rose to 75 per cent this year on the back of increased agency banking services. According to the report, the country had 40,224 agents linked to 17 commercial banks by March last year, conducting 79 million transactions valued at Sh442.2 billion.
Additionally, Kenya has 13 micro-finance banks and 77 foreign exchange bureaus. The market has over 4,000 saving and credit cooperative societies (Saccos), 180 dully licensed by the Sacco Societies Regulatory Authority.
‘’The banking sector in Kenya has over the time effectively rode on the M-Pesa revolution which was pioneered in the country to bring services closer to people. The rate can only go higher considering the growing internee and mobile phone penetration,’’ said the report.