FinAccess Survey: Key insights into Kenya’s Financial Landscape

The FinAccess surveys delve beyond macro statistics to assess how the benefits of financial sector growth are distributed across the population.Kenya’s financial sector continues to show strong growth, significantly contributing to the country’s GDP.

They examine whether financial services provide high-quality, affordable, and relevant solutions and explore who benefits from these services. The surveys also investigate how well Kenya’s financial sector supports its population in managing day-to-day needs, coping with shocks, and investing in the future.

They question whether the sector is bridging economic and social inequality or widening the divide.

These core questions have been central to the FinAccess surveys since their inception in 2006. Seven nationally representative household surveys have been conducted,  most recently in 2024.

Over the years, new frameworks and tools, such as the Financial Health Index introduced in 2016 and an expanded sample in 2021 to include all 47 counties, have enhanced the survey’s value.

The 2024 FinAccess Household survey has gone a step further, focusing more on the quality of the financial services and the impact they have on consumers.

It has an improved framework for measuring financial literacy based on the Organisation for Economic Co-operation and Development (OECD) standards to enable country comparisons. It has also refined consumer protection and market conduct measurement by constructing an index reflecting the level of consumer protection for  financial services from demand side.

The survey includes a new module on the People With Disabilities (PWDs) and enhanced module on how the general populace are using financial solutions to cope with Climate Change risks from demand side.

Being a countrywide survey involving all facets of the financial sector, conducting a FinAccess Household Survey is an expensive exercise in terms of people, time and finances. It is therefore a collaborative effort led by the Central Bank of Kenya, in partnership with the Kenya National Bureau of Statistics and Financial Sector Deepening (FSD) Kenya.

Other partners who came on board to provide technical and financial support include; Alliance for Financial Inclusion (AFI), domestic financial sector regulators, Kenya Deposits Insurance Corporation, Kenya Mortgage Refinance Company (KMRC), International Fund for Agricultural Development (IFAD), UN Women, Equity Bank, and Safaricom.

This is good for sustainability of the surveys by bringing on board new ideas, pooling resources together and expanded use cases of survey datasets.

Below are the key findings from the 2024 survey:

1. Financial Access: Formal financial access increased from 83.7percent in 2021 to 84.8percent in 2024, driven by digital technology, which nearly closed the gender gap in formal access.
2. Exclusion: 9.9 percent of Kenyan adults remain financially excluded, with rural youth forming nearly half of this group (45.5percent). Key barriers to exclusion include the inability to afford a phone (64.1 percent) and lack of Identity Card (51.5 percent).
3. County Comparison: Kiambu, Nairobi, Kirinyaga, Nyeri, Isiolo, and Mandera are the most included counties. On the flipside, Turkana, West Pokot, Elgeyo Marakwet, Trans-Nzoia, Migori, and Narok are the most excluded.
4. Providers: Uptake of brick-and-mortar bank accounts and SACCOs has notably increased but digital services recorded mixed results. Mobile money, mobile banking, and Fuliza moderated in growth ; while digital MFIs, including ‘buy now pay later’ (hire purchase) have recorded increased uptake following the regulation of DCPs.
5. Insurance, Pensions, and Securities: The use of NHIF has declined, possibly due to the ongoing transition to SHIF; NSSF usage has slightly increased due to the lifting of the NSSF Act in 2013. The use of securities has also increased with the introduction of apps.
6. Payments: 52.6percent of Kenyans now use mobile money daily, more than doubling, from 23.6percent in 2021, indicating increased digitilization in payments.
7. Savings and Credit: While credit usage has risen to 64.0percent, the population of savers has declined to 68.1percent for the first time since 2009.
8. Hustler Fund: The government’s Financial Inclusion (Hustler) Fund has seen rapid uptake, with 28percent of the population borrowing from the Fund. The Hustler Fund is more popular in urban areas with higher-income populations who are formally or informally employed.
9. Debt Distress: Debt distress is a major challenge, with 16.6percent of borrowers completely defaulting on their loans (did not pay at all) compared to 10.7percent in 2021.
10. Consumer Protection: System downtime is a major issue faced by consumers; users of MFIs and digital apps also suffer from unethical practices and hidden charges. 9.8percent of mobile money users reported losing money.
11. Financial Literacy: 42.1percent of the population is considered to have high financial literacy as they were able to answer all the three questions on inflation, interest rates and risk diversification correctly.
12. Financial Health: Financial health remains low, with 18.3percent of Kenyans financially healthy compared to 17.1percent in 2021. There was an improvement in the percentage of Kenyans able to manage day-to-day and cope with shocks, but a significant decline in those able to invest in the future.
13. Green Finance: 34percent of the population reported some form of green investment, with solar equipment and tree planting being key among these. The main sources of finance were personal income, social networks, and savings.
14. Persons with Disabilities: Financial inclusion for Persons with disabilities (PWDs) averaged 77.9percent which is lower than national average of 84.8percent. Only 7percent were found to be financially healthy.

Overall, the survey findings indicate that Kenyans continue to access a diverse range of services, with a notable increase in the use of innovative digital solutions like ‘buy now pay later,’ alongside traditional services such as brick-and-mortar banks and SACCOs.

The narrowing gaps in financial access across various demographics indicate progress in addressing inequalities, especially in gender, where the gap is now less than 2percent.

However, significant disparities persist across counties, and exclusion among rural youth remains a concern. Additionally, ongoing consumer protection issues and rising debt stress are worrisome. Improving financial health must be a central priority for policy and innovation in the coming years.

Policymakers, researchers, innovators, development partners and other key stakeholders can leverage on these datasets to address their varying needs in pursuit of their mandates.