Think back to 2006: Ellen Johnson Sirleaf was sworn in as the first woman to lead an African nation; one U.S. dollar was worth seventy Kenya Shillings; 47% of Kenyans lived in “poverty”, and Kenya’s first financial access survey took place, known as FinAccess 2006.
“I was a relatively new mum and all I could think of was getting enough money to support my son,” recalls Geraldine Makunda, FinAccess Project Manager at FSD Kenya. “Mobile phones had just hit the market on a large scale and we had not thought of mobile financial services in any manner. Most transactions were in cash and the alternative would be a cheque but I didn’t use a cheque book then.”
Wasike Nambuwani, a Research Specialist at the Centre for Insights into Financial Inclusion (CiFi) at FSD Kenya, was a graduate dreaming of a well-paid job. Conducting money transfers meant either lengthy travel, persuading a friend to act as a carrier pigeon, or buying a postal order.
Asked whether he expected as much progress as we’ve seen between then and now, he says: “It’s an absolute no! Not with the structural rigidities associated with the traditional banking model then, and lack of incentives to innovate.”
Kenya has made undeniably extraordinary progress in increasing financial access, a core objective of Kenya’s development blueprint, Vision 2030. Knowledge has been key to its success. The 2006 FinAccess household survey provided baseline measurements. The second, third, and, now, fourth surveys have tracked progress and documented changes, from which stakeholders have drawn invaluable lessons.
The 2016 survey which will be released on Thursday 18th February is of particular significance as it will provide us with the first ever ten-year perspective on financial inclusion in Kenya.
In 2013, 25% of Kenyans were financially excluded, down from 39% in 2006. Has formal financial inclusion in Kenya now pushed past the three-quarters mark? The results will be presented by leading experts in the field in Nairobi on Thursday morning.
Mobile money to M-Shwari
Now think back to 2013. M-PESA was, of course, ubiquitous. In an interview about the findings of the 2013 FinAccess survey, Amrik Heyer, Head of Knowledge at FSD Kenya, told CNN that Kenya had made great strides of progress: financial inclusion had gone up to 67%, putting Kenya in second place on the continent, with gains mostly driven by mobile financial services. However, she said, Kenya was “not quite where we want to be in terms of full financial intermediation.”
Heyer went on to say that intermediation was just beginning in Kenya, with the launch of M-Shwari in 2012 – a product few people had heard of. “That’s an exciting development because it means now we’ve got the reach of mobile and the full financial intermediation services of banks coming together,” she said.
Just three years later, one in five Kenyan adults are active M-Shwari users. The product has taken Kenya by storm, demonstrating how quickly the financial landscape in Kenya can change, and how crucial it is to understand the drivers of those changes. Knowledge gives us power to incentivise reform.
Look out for the 2016 FinAccess household survey results immediately after the launch. The full dataset will also be available on our website for download.