2019 FinAccess Household Survey

Key Findings
 Presentation Flow

Key Findings

Summary

Questions & Answers

2
 Key findings
Access Usage Quality Impact

3
 Expanding Access

4
 Financial Access Journey: 2006 - 2019

Access to formal financial services and products has expanded

significantly among Kenyans…
82.9
75.3
66.7
Access Level (%)

41.3 40.4
32.7
32.1
25.4
17.4
26.8 11
26.7
7.2
6.1
7.8
2006 2009 2013 2016 2019
Formal Excluded Informal

5
 More Kenyans now access formal financial services and products…

Formal Prudential Formal Non-prudential Formal Registered Informal Excluded

2019

43.9 38.6 0.4 6.1 11

2016

% 42.2 32.7 0.4 7.2 17.4

2013

% 32.7 33.2 0.8 7.8 25.4

2009

% 21.6 14.7 4.1 26.8 32.7

2006

% 15 4 7.7 32.1 41.3

6
 Access gaps still exist, but narrowing…
100

80
Access Rates Gaps (%)

55
60 61
48 54
40
32
27
20 20 17
12
14
12 14 8 9
0 6
2006 2009 2013 2016 2019
Sex Residence Wealth Quintile

7
 Financial inclusion gaps narrowing, but…
Formal inclusion Exclusion rate

2016

8
 Mobile money is the story behind expanding financial
inclusion…

9
 Kenya’s financial inclusion ranks higher
across the continent…

Seychelles-2016 95 2 3
South Africa-2018 90 3 7
Kenya-2019 82.9 6.1 11
Namibia-2017 73 5 22
Rwanda-2016 68 21 11
Tanzania-2017 65 7 28
Uganda-2018 58 20 22
Cameroon-2017 49 15 36
Nigeria-2018 48.7 14.6 36.8
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Formal Informal Excluded

10
 Deepening Usage

11
 More Kenyans use a wide menu of
financial services and products…
Mobile banking: 2016 = 17.5% 2019 = 25.3%*

79.4
Traditional Banking: 2016 = 31.7% 2019 = 29.6%

71.4
61.6

41.4
40.8
38.4

36
32.4

30.1
29.2

27.9

27.9

27.7
23.2
20.5

17.8
13.1

12.9

12.5
12.2
11.3
14

11

8.3
9

4.9

3.7
3.6
3.5
3.4

3.3

3.2
1.9
1.7

1.7

0.6
0.0
B A NK SACCO S MF I S I NSUR A NC E P ENSION M OB ILE I NFOR M A L D IG ITA L
(I NC L .NHI F ) M ONEY G ROUP L OA NS A PPS

2006 2009 2013 2016 2019

12
 Digitalization raising transactions frequency…
90.0

80.0
Frequency of use (%)

70.0

60.0

50.0

40.0

30.0

20.0

10.0

0.0
Daily Weekly Monthly once in 3 Daily Weekly Monthly every 3
months and months and
above above
2016 2019
Axis Title

Bank account SACCOs Mobile bank account Mobile money MFI Informal Groups

13
 More is preferred to less…

2019 15.3 73.7 11

2016 22.6 60 17.4

2013 26.9 47.8 25.4

2009 36.1 31.2 32.7

2006 39.8 18.8 41.3

One type of financial service Two or more types of financial services none (excluded)

14
 More adults use a mix of formal and informal
services and products to meet their growing and
complex needs…

15
 Young people driving mobile banking. What
is the future of traditional banking?…

39.1
37.9

36.4
36.3

34.1
33.7
33.3
31.7

29.6

25.3
25.5

24.9
23.2

22.8
22.7

22.7

24

19.7
17.5
17.5
11.4

10.2
6.3
3.7

Traditional banks Mobile bank account Traditional banks Mobile bank account
2016 2019

18-25yrs 26-35yrs 36-45yrs 46-55yrs >55yrs Overall

16
 Mobile banking usage dominates traditional
banking…
48.8

44
39.4

38.4
36.9
31.7

30.2
29.6
29.5

25.3
24.5

22.6
21.7
21.8

20.6
19.7
17.5

16.2
13.5
10.5

Traditional banks Mobile bank account Traditional banks Mobile bank account
2016 2019

Male Female Rural Urban Overall

17
 Challenges and reasons for non-use of bank
account vary…
Top reasons for non-use of a Top challenges cited in bank
bank account account usage (%)

Poor service received at a

No regular Income 15.5 branch/agent/customer 13.2
care

Can't Afford to 19.3 Unexpected charges 30.9

ATM or Card Swipe

No money to Save 35.1 machine not working 36.4

0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 0.0 10.0 20.0 30.0 40.0

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 Use of Informal Groups still strong – but
challenges abound...
Informal Groups Usage by number
Used more than 3 groups
3% Top challenges in informal Groups Usage (%)
8%
Challenges 2016 2019 Change

Dishonesty or default by
members 12.0 48.7 36.7
19%
Theft or fraud by a
70% committee member 6.2 25.6 19.4

Theft or fraud by a non-

group member 3.7 7.4 3.8

Use 1 group Bad investment of funds 2.9 5.1 2.2

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 Savings moderated but Credit uptake picked
up from 2013...mainly digital
Savings and Credit Uptake (%) Top Reasons for not saving (%)
80.0
69.9
Requires a regular income 42.3
70.0 66.4
I don't have enough money to save 38.3
58.4
60.0
52 51.5 I use my money for investments not
19.0
for savings
50.0
50.4
There’s nowhere to save my money 8.7
40.0

37.8 I only save when I need to 5.1

30.0 35.5 34.2
28.6
20.0 I don’t need to save 2.4
2006 2009 2013 2016 2019 Do not want to keep a minimum
2.3
Credit/Loans
Use 1 group Savings
balance

20
 Cost/affordability and preference influence
product/service use...
Key Reasons for non-use of a financial provider/product (%)
Banks Sacco Mobile Money Mobile banking
Financial situation/ affordability 76.7 9.9 0.5 1.1
Service charges 1.3 1.2 37.7 13.7
Convenience/Service quality 2.0 6.3 1.0 0.7
Risk of use 1.2 1.6 2.2
Preference 11.5 27.5 21.4 64.3
Eligibility & Identification requirements 3.2 2.8 16.4 5.3
Literacy 2.1 3.4 0.6 3.1
Trust 0.7 15.1
Account/ device 18.3 5.7

N/A 0 - 20%
21 - 49% 50% and above
Use 1 group

21
 Use of insurance, pension and investments products vary
overtime...
Use of Insurance, pension and investments providers (%)
28 Investments Pension (excl.) Insurance (regulated by IRA) NHIF NSSF

24 26.1

20 21.2

16 15.6
12.5 12.2
10.9
12 11.6
11.7
9.6
8 10.3 11.4

5.8 6.1 6 5.5

4.9
4 3.2
3.7
2.7
4.2 2.9 3.2
0
2006 2009
Use 1 group 2013 2016 2019

• Reasons vary for these trends

22
 Use of insurance mainly influenced by ability to pay
policy premiums...

Top Reasons for lack of Insurance policy (%)

Use 1 group

23
 Mobile money device increasingly driving insurance
policy premiums payment channels...
Channels for Paying Insurance policy premiums (%)

Use 1 group

24
 Lack of investible funds and little knowledge are
inhibitors to investment in securities...
Top Reasons for not investing in securities (%)

Use 1 group

25
 Despite rapid digitalization, Cash still remains the most
dominant mode of making payments...
Cash dominates all other transaction devices (%)

96.0
pay monthly bills 88.0
• Cash used
80.0
Pay school fees
widely for daily
72.0
Paid Government
64.0
expenses,
Paid Pension
56.0
monthly bills
Paid Daily Expenses
48.0 payments, fee
Sent/Gave money inside Kenya 40.0 payments,
Sent money outside Kenya
32.0 remittances, and
24.0
Received money from inside purchase of
Kenya 16.0
Received money from outside
assets
Kenya 8.0

Paid for Assets 0.0

Bank Transfer Mobile money account cash Pay bill/Till No.
Use 1 group

26
 Mobile money usage quite widespread amid emerging
challenges...
Purpose of having mobile money Challenges in using mobile money

Use 1 group

27
 Relevance: Goals, Needs and Financial Solutions

28
 Major priority goal among Kenyans is education
and putting food on the table…
Major priority goal by sex and residence (%)

29
 More Kenyans are faced with financial needs
towards investment goals, managing shocks and
meeting day-to-day expenses...
Proportion of adults mentioning a financial need (%)

• Consumers choose
financial services and
products based on
their needs, which are
reflected in their use
of available solutions
either formal and/or
informal

30
 Kenyans’ socio-economic status and livelihood resilience
largely influenced by how they meet their needs…
Needs by wealth quintiles (%) Needs by livelihood sources (%)

31
 Financial solutions vary with the need…
Financial solutions used towards meeting financial needs

NOTES
Social networks = Borrow from friends and family
Personal = Sell assets/livestock/poultry, get additional work, cut back on expenses
Formal = Use savings or borrow from formal institutions such as banks/MFIs/ SACCOs, excluding insurance
Informal = Borrow or savings from informal providers such as shylocks, Chama, employers, shopkeeper, secret hiding place

32
 Both financial and non-financial solutions are used
widely in addressing a financial need…
Effectiveness on the use of selected solutions (%)

33
 Financial Health and
Livelihoods

34
 Financial health worsened in 2019 ….
Financial Health Dimensions (%)
70
Financial Status (%)
51
2016 2019
60 38.2
34.3
27.5 24.9
23.8
50 Overall
40

30 Improved Remained the Worsened

same
20
2016 2019

10

0
Ability to Manage Ability to cope with Ability to invest in Financially Healthy
day-to-day shocks livelihood and future Adults

35
 Being in formal employment and or running
business impacts financial health…
Financial health by livelihood in 2019 (%

36
 Perceptions on Consumer
Protection and Financial Literacy

37
 Financial advice gaps exist…
Sources of financial advice (%)

• respondents relying on
their own knowledge was
39.6% compared to 34.7%
who relied on family and
friends for financial
advice…huge opportunity
for financial advisors!

38
 Formal education greatly impacts choice of financial
advice …
Sources of financial advice by Residence (%) Sources of financial advice by Education (%)

39
 About 70% of Kenyans perceive betting not to be a
good source of income, but 20% have a positive view
…
Perception on Betting/Gambling (%) Perception on Betting/Gambling as a good Source
of Income (%)

40
 Easing Consumer Protection Concerns….
Consumers loss of money by institutions: 2016 - 2019 (%)

41
 Consumer Protection Concerns….
Loss via Mobile money: 2016 - 2019 (%) Challenges experienced on financial services used (%)

42
 Summary and Conclusions
• Digital transformation via mobile banking and digital apps space raises
cyber security, credit risk and consumer protection concerns.

• Cash is a still the dominant mode of payment for agriculture and business

• Majority of Kenyans feel that their financial status has worsened, implying
reduced ability to use financial services and products to manage their daily
needs, cope with shocks and achieve future goals.

• Promotion of financial literacy is important in addressing emerging

consumer protection concerns.

• Fraud accounted for the highest incidences of loss of money on mobile

money platforms, thus becoming a source of new emerging risks.

43
 Questions & Answers

44