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 38.6 0.4 11 6.1 43.9 2016 32.7 0.4 17.4 % 7.2 42.2 2013 33.2 0.8 25.4 % 7.8 32.7 2009 14.7 4.1 32.7 % 26.8 21.6 2006 4 7.7 41.3 % 32.1 15 6
Access gaps still exist, but narrowing… 100 Access Rates Gaps (%) 80 55 60 61 54 48 40 32 27 20 20 17 12 14 14 12 9 8 6 0 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 90 3 7 South Africa-2018 82.9 6.1 11 Kenya-2019 73 5 22 Namibia-2017 68 21 11 Rwanda-2016 Tanzania-2017 65 7 28 58 20 22 Uganda-2018 49 15 36 Cameroon-2017 Nigeria-2018 48.7 14.6 36.8 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Formal Informal Excluded 1 0
Deepening Usage 1 1
More Kenyans use a wide menu of financial services and products… Mobile banking: 2016 = 17.5% 2019 = 79.4 25.3%* 71.4 61.6 41.4 40.8 38.4 32.4 36 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 3.4 3.5 3.6 3.3 3.2 1.7 1.7 1.9 0.6 0.0 B ANK SACCO S MFI S I NSURANCE P ENSION M OBILE I NFORMAL D IGITAL (I NCL .NHIF) L OANS A PPS MONEY GROUP 2006 2009 2013 2016 2019 1 2
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 1 3
More is preferred to less… 15.3 2019 73.7 11 2016 22.6 60 17.4 26.9 47.8 2013 25.4 36.1 2009 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) 1 4
More adults use a mix of formal and informal services and products to meet their growing and complex needs… 1 5
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 1 6
Mobile banking usage dominates traditional banking… 48.8 44 39.4 38.4 36.9 31.7 30.2 29.5 29.6 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 1 7
Challenges and reasons for non-use of bank account vary… Top challenges cited in bank Top reasons for non-use of a account usage (%) bank account Poor service received at a 13.2 No regular Income 15.5 branch/agent/customer care 30.9 Unexpected charges Can't Afford to 19.3 ATM or Card Swipe machine 36.4 No money to Save 35.1 not working 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 1 8
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% Chang 2016 2019 e Challenges Dishonesty or default by 19% 12.0 48.7 36.7 members 70% Theft or fraud by a 6.2 25.6 19.4 committee member Theft or fraud by a non- 3.7 7.4 3.8 group member Use 1 2.9 5.1 2.2 Bad investment of funds group 1 9
Savings moderated but Credit uptake picked up from 2013...mainly digital Savings and Credit Uptake (%) Top Reasons for not saving (%) 80.0 42.3 Requires a regular income 69.9 66.4 70.0 38.3 I don't have enough money to save 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 5.1 I only save when I need to 35.5 30.0 34.2 28.6 I don’t need to save 2.4 20.0 2006 2009 2013 2016 2019 Do not want to keep a minimum 2.3 balance Credit/Loans Savings Use 1 group 2 0
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 2 1
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 10.3 11.4 8 6.1 6 5.8 5.5 4.9 4 3.7 3.2 2.7 3.2 2.9 4.2 0 2006 2009 2013 2016 2019 Use 1 group • Reasons vary for these trends 2 2
Use of insurance mainly influenced by ability to pay policy premiums... Top Reasons for lack of Insurance policy (%) Use 1 group 2 3
Mobile money device increasingly driving insurance policy premiums payment channels... Channels for Paying Insurance policy premiums (%) Use 1 group 2 4
Lack of investible funds and little knowledge are inhibitors to investment in securities... Top Reasons for not investing in securities (%) Use 1 group 2 5
Despite rapid digitalization, Cash still remains the most dominant mode of making payments... Cash dominates all other transaction devices (%) 96.0 • Cash used pay monthly bills 88.0 80.0 Pay school fees widely for daily 72.0 expenses, Paid Government 64.0 monthly bills Paid Pension 56.0 payments, fee Paid Daily Expenses 48.0 payments, 40.0 Sent/Gave money inside Kenya remittances, and 32.0 Sent money outside Kenya 24.0 purchase of Received money from inside Kenya 16.0 assets Received money from outside 8.0 Kenya Paid for Assets 0.0 Bank Transfer Mobile money account cash Pay bill/Till No. Use 1 group 2 6
Mobile money usage quite widespread amid emerging challenges... Purpose of having mobile money Challenges in using mobile money Use 1 group 2 7
Relevance: Goals, Needs and Financial Solutions 2 8
Major priority goal among Kenyans is education and putting food on the table… Major priority goal by sex and residence (%) 2 9
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 3 0
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 3 2
Both financial and non-financial solutions are used widely in addressing a financial need… Effectiveness on the use of selected solutions (%) 3 3
Financial Health and Livelihoods 3 4
Financial health worsened in 2019 …. Financial Health Dimensions (%) Financial Status (%) 70 51 2016 2019 60 38.2 34.3 27.5 24.9 23.8 Overall 50 40 Improved Remained the Worsened 30 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 3 5
Being in formal employment and or running business impacts financial health… Financial health by livelihood in 2019 (% 3 6
Perceptions on Consumer Protection and Financial Literacy 3 7
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