Patrick Njoroge: Improving financial services for the Kenyan population
Speech by Dr Patrick Njoroge, Governor of the Central Bank of Kenya, at the launch of the
FinAccess Geospatial Mapping Survey, 2015, Nairobi, 29 October 2015.
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I am delighted to join you today, to launch the key findings of the FinAccess Geospatial
Mapping Survey, 2015. The Survey was conducted by the FinAccess Management Team,
comprising of the Central Bank of Kenya (CBK), Financial Sector Deepening Trust (FSD),
and the Kenya National Bureau of Statistics (KNBS), with funding from the Bill & Melinda
Gates Foundation (B&MGF). The fieldwork was conducted by Brand Fusion Limited, a
Research House contracted by B&MGF. I wish to thank the Bill and Melinda Gates
Foundation for funding this Survey and all those who, in one way or another, participated and
made this Survey a success.
1. Policy Goal: One of the goals of Kenya's Vision 2030 is to foster greater efficiency
and delivery of financial services to a wider population. In order to achieve this, all
stakeholders and associated financial sector players, both in the private and public sectors,
have been working towards increasing financial inclusion through offering appropriate and
affordable financial products and services. There is more focus on low-income households
and Micro-, Small-, and Medium- Sized Enterprises, who are, as a whole, benefitting from
these positive and significant endeavours. The CBK in collaboration with FSD Kenya, KNBS,
and other key stakeholders has taken a leading role in fostering Kenya's financial inclusion
agenda. It has also taken the lead in improving the measurement of financial inclusion and
tracking its dynamics, thereby identifying evidence-based strategies to promote an inclusive
and stable financial system.
2. Existing Financial Inclusion Landscape: The promotion of financial inclusion has
been an area of focus of the Government over the past decade. Recent FinAccess Surveys
indicated that Kenya has made significant progress in fostering financial inclusion since the
first baseline survey in 2006. The three national FinAccess Household Surveys of 2006,
2009 and 2013 and the FinAccess Geospatial Mapping Survey, 2013 have clearly
demonstrated that Kenya's financial inclusion landscape has changed considerably over the
period 2006 - 2013. The proportion of adult population using formal financial services rose to
66.7 percent in 2013, from 27.4 percent in 2006, and 41.3 percent in 2009. The proportion of
the financially excluded on the other hand has been falling steadily from 39.3 percent in
2006, to 31.4 percent in 2009, and 25.4 percent in 2013. In a nutshell, Kenyans have
enjoyed better financial access over that period.
Kenya committed in 2012 at the G-20 Los Cabos Summit to achieve a higher level of
financial inclusion through targeted interventions and strategies. To this end, a range of
policies, strategies, products and technology-enabled delivery channels have been rolled-out
by the public and private sectors. Ensuring the success of these endeavours is key, as
financial inclusion is a vital component of sustained inclusive financial sector development,
thus contributing significantly to inclusive growth and poverty reduction. Our efforts towards
ensuring improved financial inclusion to majority of the Kenyan population have not gone
unnoticed. I am pleased to note that the Brookings Financial and Digital Inclusion Project
Report, 2015 ranked Kenya as the top-scoring country in financial inclusion world-wide. We
are, however, cognizant that enhanced financial inclusion anchored on dynamic innovations
brings forth some risks that we need to manage so that they do not negate the success so
far achieved.
3. Key Findings: The first FinAccess Geospatial Mapping Survey took place in 2013
and collected Geographical Information System (GIS) data on all the financial services
access touch points as well as some operational and transactional data through interviewing
the financial service providers. The current FinAccess Geospatial Mapping Survey, 2015,
whose results I am pleased to launch today, collected GIS data on both financial and
agricultural services access touch points as well as some operational and transactional data.
This Survey, therefore, provides an update of datasets collected in the baseline survey in
2013 and enhanced understanding of the financial inclusion landscape in Kenya and its
dynamics over time. In particular:
• The 2013 and 2015 GIS data provides a visual spatial distribution of the mapped
financial and agricultural services access touch points. Analysis of the survey data
provides better understanding of the financial inclusion constraints, potential
opportunities and evidence-based strategies to expand inclusion. The success of
these endeavours is well captured in the 2013 and 2015 Survey results.
• As the results to be launched shortly will show, the financial system is now offering a
wider range of financial services and products to more Kenyans, while covering a
wider geographical spread. Compared to the 2013 Survey, which captured
64,740 financial services access touch points, the 2015 Survey captured
91,186 financial access touch points and 27,684 agricultural services access touch
points, which represents a growth of 40.8 percent financial services access touch
points over a period of two years.
• The fieldwork interviews gave some interesting feedback, with some of the key
issues that emerged indicating instances of fraud. Mobile money service providers
reported the highest instances of fraud at 37 percent as compared to 10 percent of
bank agents. Counterfeit money was the greatest reported type of fraud amongst
service providers in forex bureaus and mobile money providers, while fake
identification was the highest reported type of fraud amongst insurance providers
and capital markets service providers.
• The results we are releasing today are derived from developments in the wider
economy, infrastructural facilities, technological innovations, institutional
developments as well as financial sector policy and regulatory reforms and financial
markets innovations. I am delighted that the sector now has such a useful
information resource at its disposal.
4. Uses: For policy makers and regulators, the application of GIS analysis to assess
the spatial distribution of financial service access points relative to population and other
parameters is clear. Such data can be used towards identifying the underserved
geographical areas and instituting strategies and interventions that will address the identified
bottlenecks to bring those populations who are otherwise excluded into the formal financial
system. On the other hand, for the private sector players, GIS data can be used to identify
opportunities for expansion as well as boosting their marketing strategies to be more
geographically targeted for maximum effectiveness. It will also help to create rapid feedback
loops about customer usage patterns and corridors of need. The analysis can also be used
to better understand fraud events, profile of access touch points and determine risk profiles
of clients. Moreover, the presentations will show that GIS analysis by private sector players
can comprehensively identify those agents where cash shortfalls are likely to manifest
themselves, and therefore, proactively build liquidity management infrastructure where it is
needed most.
At this point, let me invite you to learn from today's presentations and urge you to make use
of the opportunity offered and build-upon this information platform. The sustainability and
growth of GIS data collection and usage will be driven by on-boarding amongst you, both
public and private sectors stakeholders. Be assured that we in the FinAccess Management
Team in collaboration with B&MGF among other partners will champion such efforts and will
facilitate learning opportunities with you. This effort will facilitate modalities of self-reporting
GIS data as well as assisting you in capacity building towards usage of the datasets to inform
policy and business strategies. Already B&MGF has initiated a pilot in self-reporting of GIS
data in order to achieve sustainability and we welcome you all to participate.
Finally, I would like at this juncture to inform you that we have just concluded conducting the
fourth round of the FinAccess Household Surveys, 2015 and data cleaning is on-going. In
this regard, we shall be inviting you to the launch of the top-line findings early next year
around February 2016. We, therefore, urge you to diarise this activity as triangulation of
datasets from both FinAccess Geospatial Mapping Survey, 2015 and FinAccess Household
surveys, 2015 will provide deeper understanding of Kenya's financial inclusion landscape.
With these few remarks, I welcome you to this breakfast event and launch the Survey key
findings and wish you fruitful deliberations.
Thank You!