In April 2019, the 2019 FinAccess Household Survey revealed that Kenya had made extraordinary strides in financial inclusion. While FinAccess 2019 shows that financial inclusion has peaked at 83% among Kenyans, its findings also evoke poignant questions. For instance, does the high financial inclusion rate translate into an improved quality of life for the average Kenyan?
It is in this context that FSD Kenya and the Consultative Group to Assist the Poor (CGAP) have collaborated on a segmentation study to facilitate deeper insights into FinAccess 2019. The study seeks to better understand the profile, needs and ambitions of financially underserved segments in Kenya. The Centre for Financial Regulation and Inclusion (Cenfri) and 71point4 explored FinAccess and other data to identify key populations segments that display unmet financial needs and are strategically important for both policy objectives and economic growth.
Segmentation of FinAccess 2019 data identifies seven priority customer segments that have unmet financial needs, present viable business case for financial service providers (FSPs), and are strategically important for Kenya’s economic growth. These are:
- Regional market farmers;
- Local market farmers;
- Sophisticated businesses;
- Urban small and micro businesses;
- Urban wage earners;
- Public sector employees; and
- Urban aspirational youth.
These seven segments present opportunities for policy makers, regulators and financial service providers to step in and close the gaps between financial needs and product usage. They also hold the potential to provide key traction to Kenya’s Vision 2030, the Big Four Agenda and the Sustainable Development Goals (SDGs).
Through this study, FSD and its partners hope to contribute to market development by providing actionable information to actors that will shape the future of Kenya’s financial sector, key among them policymakers and regulators, industry players, researchers, analysts and consumer groups.