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Beyond financial inclusion

Redefining financial services for financial health in Kenya

Financial inclusion is just the tip of the iceberg. Though a powerful force, it only focuses on access, usage, and quality of financial products and services. There is a need to expand the focus beyond financial inclusion to financial health to ensure that more contact with formal financial services has positive outcomes for the lives of all those included.

This two-part report is about financial inclusion and financial health in Kenya. The first part elaborates on why financial inclusion matters and zooms in on the positive changes that formal financial inclusion has brought to Kenyans. The second part elaborates on why financial health matters, the key challenges Kenyans face in using the available financial services, and recommendations for financial services industry players to boost financial health.

Key Takeaways

  • Financial inclusion: Formal financial inclusion in Kenya doubled over the last decade, primarily driven by mobile phone proliferation and the increased popularity of mobile money services. Today, millions of previously excluded and underserved Kenyans use formal financial services daily through their mobile phones. Interventions are, however, necessary to ensure Kenyans use formal financial services more efficiently to lead a better quality of life.
  • Financial health: Over the last five years, financial health in Kenya deteriorated, even as access to and usage of formal financial services increased. Most Kenyan adults still face challenges that limit their ability to manage present and future needs. Incumbents, fintechs, regulators, and policymakers need to take comprehensive action to shift the dials on personal finance. Mobilizing ecosystems, designing solutions, and measuring financial health are crucial in driving the desired change at scale.

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