Inclusive Financial Markets: Is Transformation Under Way in Kenya?



This article is corrected by:

  1. Errata: Erratum Volume 32, Issue 5, 639–642, Article first published online: 11 August 2014

  • 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.


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.