Originally published: August 9, 2008
Source: Daily Nation
According to the Central Bank of Kenya’s 2007 Banking Supervision Department report, 38% of Kenyans have no access to financial services. The majority of them live in rural areas and for them financial services are either costly or rigid. Only 19% of Kenyans have access to formal financial services through commercial banks, building societies and postal banks.
Savings and credit cooperatives (SACCOs) and MFIs serve an additional 8% while 35% depend primarily on informal financial services such as Rotating Savings and Credit Associations (ROSCAs) and Accumulating Savings and Credit Associations. The report also indicates that access to financial services varies across the country and is highest in Nairobi, which has the largest number of bank branches.
The report adds that financial institutions seeking to work in rural areas face numerous constraints, such as poor infrastructure and low education levels. Products of many MFIs are also not well suited to seasonal or longer-term agricultural activities.