2019 FinAccess Household

Survey Key Findings

Key Findings

Summary

Questions & Answers

Presentation Flow

2

Key findingsAccess Usage Quality Impact

3

Expanding Access

4

Financial Access Journey: 2006 - 2019

26.7

40.4

66.7

75.382.9

41.3

32.7

25.4

17.411

32.1

26.8

7.8

7.26.1

2006 2009 2013 2016 2019

Acce

ss L

eve

l (%

)

Formal Excluded Informal

Access to formal financial services and products has expanded

significantly among Kenyans…

5

More Kenyans now access formal financial services and products…

15

21.6

32.7

42.2

43.9

4

14.7

33.2

32.7

38.6

7.7

4.1

0.8

0.4

0.4

32.1

26.8

7.8

7.2

6.1

41.3

32.7

25.4

17.4

11

%

%

%

%

20

06

20

09

20

13

20

16

20

19

Formal Prudential Formal Non-prudential Formal Registered Informal Excluded

6

Access gaps still exist, but narrowing…

12 148 9 6

12

27

20 1714

48

55

6154

32

0

20

40

60

80

100

2006 2009 2013 2016 2019

Access R

ate

s G

aps (

%)

Sex Residence Wealth Quintile

7

Financial inclusion gaps narrowing, but…

2016

Formal inclusion Exclusion rate

8

Mobile money is the story behind expanding

financial inclusion…

9

Kenya’s financial inclusion ranks higher across the continent…

1

0

48.7

49

58

65

68

73

82.9

90

95

14.6

15

20

7

21

5

6.1

3

2

36.8

36

22

28

11

22

11

7

3

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Nigeria-2018

Cameroon-2017

Uganda-2018

Tanzania-2017

Rwanda-2016

Namibia-2017

Kenya-2019

South Africa-2018

Seychelles-2016

Formal Informal Excluded

Deepening Usage

1

1

More Kenyans use a wide menu of financial services and products…

14

13

.1

1.7 4

.9

3.2

0.0

32

.4

20

.5

9

3.4

3.3 3.7

27

.9

36

29

.2

11

3.5

17

.8

1.9

61

.6

27

.7

38

.4

12

.9

3.6

23

.2

12

.5

71

.4

41

.4

0.6

40

.8

11

.3

1.7

27

.9

12

.2

79

.4

30

.1

8.3

BANK SACCOS MFIS INSURANCE

( INCL.NHIF)PENSION MOBILE

MONEY

INFORMAL

GROUP

D IGITAL

LOANS APPS

2006 2009 2013 2016 2019

Mobile banking: 2016 = 17.5% 2019 =

25.3%*

1

2

Digitalization raising transactions frequency…

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

Daily Weekly Monthly once in 3

months and

above

Daily Weekly Monthly every 3

months and

above

2016 2019

Fre

quency o

f use (

%)

Axis Title

Bank account SACCOs Mobile bank account Mobile money MFI Informal Groups

1

3

More is preferred to less…

39.8

36.1

26.9

22.6

15.3

18.8

31.2

47.8

60

73.7

41.3

32.7

25.4

17.4

11

2006

2009

2013

2016

2019

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?…

22

.7

23

.2

22

.8

24

37

.9

22

.7

33

.3

39

.1

36

.3

17

.5

34

.1

19

.7

36

.4

11

.4

33

.7

10

.2

25

.5

3.7

24.9

6.3

31

.7

17.5

29

.6

25

.3

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…

39

.4

21

.7

36

.9

30

.2

24

.5

13

.5

22

.6

20

.6

21

.8

10

.5

19

.7

16

.2

48

.8

29

.5

44

38

.4

31

.7

17

.5

29

.6

25

.3

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…

36.4

30.9

13.2

0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0

ATM or Card Swipe machinenot working

Unexpected charges

Poor service received at abranch/agent/customer care

35.1

19.3

15.5

0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0

No money to Save

Can't Afford to

No regular Income

Top challenges cited in bank account usage (%)

Top reasons for non-use of a bank account

1

8

Use of Informal Groups still strong – but challenges abound...

Top challenges in informal Groups Usage (%)

Informal Groups Usage by number

Challenges 2016 2019

Chang

e

Dishonesty or default by

members 12.0 48.7 36.7

Theft or fraud by a

committee member 6.2 25.6 19.4

Theft or fraud by a non-

group member 3.7 7.4 3.8

Bad investment of funds 2.9 5.1 2.2

3%

8%

19%

70%

Use 1

group

Used more than 3

groups

1

9

Savings moderated but Credit uptake picked up from 2013...mainly digital

Top Reasons for not saving (%)Savings and Credit Uptake (%)

Use 1

group

35.537.8

28.6

34.2

50.4

52 51.5

58.4

66.469.9

20.0

30.0

40.0

50.0

60.0

70.0

80.0

2006 2009 2013 2016 2019

Credit/Loans Savings2.3

2.4

5.1

8.7

19.0

38.3

42.3

Do not want to keep a minimum

balance

I don’t need to save

I only save when I need to

There’s nowhere to save my money

I use my money for investments not

for savings

I don't have enough money to save

Requires a regular income

2

0

Cost/affordability and preference influence product/service use...

Key Reasons for non-use of a financial provider/product (%)

Use 1

group

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

2

1

Use of insurance, pension and investments products vary overtime...

Use of Insurance, pension and investments providers (%)

Use 1

group

11.6

10.3

3.2

3.23.7

10.912.5 12.2

4.95.8 6.1 6 5.5

4.2

15.6

21.2

26.1

2.72.9

9.6

11.7

11.4

0

4

8

12

16

20

24

28

2006 2009 2013 2016 2019

Investments Pension (excl.) Insurance (regulated by IRA) NHIF NSSF

• 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 (%)

Use 1

group

• Cash used

widely for daily

expenses,

monthly bills

payments, fee

payments,

remittances, and

purchase of

assets

0.0

8.0

16.0

24.0

32.0

40.0

48.0

56.0

64.0

72.0

80.0

88.0

96.0

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

pay monthly bills

Pay school fees

Paid Government

Paid Pension

Paid Daily Expenses

Sent/Gave money inside Kenya

Sent money outside Kenya

Received money from inside

Kenya

Received money from outside

Kenya

Paid for Assets

2

6

Mobile money usage quite widespread amid emerging challenges...

Purpose of having mobile money

Use 1

group

Challenges in using mobile

money

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...

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

Proportion of adults mentioning a financial need (%)

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

Effectiveness on the use of selected solutions (%)

Both financial and non-financial solutions are used widely in addressing a financial need…

3

3

Financial Health and

Livelihoods

3

4

Financial health worsened in 2019 ….

38.2

27.534.3

23.8 24.9

51

Improved Remained thesame

Worsened

2016 2019

3

5

0

10

20

30

40

50

60

70

Ability to Manageday-to-day

Ability to cope withshocks

Ability to invest inlivelihood and future

Financially HealthyAdults

2016 2019

Financial Status (%)

Financial Health Dimensions (%)

Overall

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

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!

Financial advice gaps exist…

3

8

Sources of financial advice by Residence (%) Sources of financial advice by Education (%)

Formal education greatly impacts choice of

financial advice …

3

9

Perception on Betting/Gambling (%) Perception on Betting/Gambling as a good Source of Income (%)

About 70% of Kenyans perceive betting not to be a

good source of income, but 20% have a positive

view …

4

0

Easing Consumer Protection Concerns….

Consumers loss of money by institutions: 2016 - 2019 (%)

4

1

Consumer Protection Concerns….

Loss via Mobile money: 2016 - 2019 (%) Challenges experienced on financial services used (%)

4

2

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.

4

3

Questions & Answers

4

4