They acknowledge the financial support of the Financial Sector Deepening Trust, Kenya for this research. They are particularly grateful to Graham Brown for technical advice and to James Copestake, David Ferrand, Christoph Kneiding and anonymous reviewers for comments on earlier versions. Errors and omissions remain their responsibility.
Inclusive Financial Markets: Is Transformation Under Way in Kenya?
Article first published online: 12 OCT 2012
© The Authors 2012. Development Policy Review © 2012 Overseas Development Institute.
Development Policy Review
Volume 30, Issue 6, pages 719–748, November 2012
How to Cite
Johnson, S. and Arnold, S. (2012), Inclusive Financial Markets: Is Transformation Under Way in Kenya?. Development Policy Review, 30: 719–748. doi: 10.1111/j.1467-7679.2012.00596.x
- Issue published online: 12 OCT 2012
- Article first published online: 12 OCT 2012
- first submitted October 2010; final revision accepted March 2012
- financial access;
- financial inclusion;
- mobile money transfer;
Policy emphasis on financial-sector development has shifted away from microfinance and towards the development of ‘inclusive financial markets’. But, for inclusion to take place, policy must address barriers to access. This article analyses the socio-economic, demographic and geographical factors associated with financial-service use across formal, semi-formal and informal financial services in Kenya between 2006 and 2009, including the new and rapidly growing mobile-phone-based payments service – M-PESA. It finds that, despite an expansion of services, evidence of access barriers is now clearer than it was in 2006. However, there is some evidence that M-PESA is reversing age as a barrier to inclusion, but, as yet, it is more of a complement than a substitute for formal services.