For background on the Financial Inclusion Insights 2016 surveys, data, and reports please follow this link.  The full 2016 Kenya Annual Report can be found here. 

InterMedia’s recently released Financial Inclusion Insights (FII) 2016 Kenya Annual Report and Survey Data finds that financial inclusion in Kenya, while still expansive compared to the other FII countries in Africa and Asia, did not increase from 2015. Although there was no increase in the share of the population that holds a registered financial account, the FII data shows that existing customers are deepening their engagement with financial services, becoming active users and making use of a wider range of more advanced services.

More specifically, in 2016 almost 7 in 10 Kenyan adults were financial included, defined by FII as holding a registered account with a formal financial institution. Mobile money continued to drive access to financial services and account registration (Figure 1). In fact, approximately 97 percent of those who had a financial account in 2016 had a mobile money account – sometimes in addition to a bank and/or microfinance account. While growth in the number of registered user plateaued, advanced use of a registered account – saving, borrowing, paying bills and other activities beyond person-to-person (P2P) transfers and cash deposits and withdrawals – increased in 2016 (Figure 2). Savings was the most common advanced use case for both bank and mobile money accounts, followed by bill pay and receiving wages. These findings show that mobile money services can fill a range of needs beyond P2P.

FIGURE 1: Account access and Registered Use         


FIGURE 2: Advanced active registered users

(Shown: Percentage of Kenyan adults for each year)

As the FII team examined these high level numbers and dug deeper into the 2016 data, we identified several other important takeaways regarding the evolution of financial inclusion in Kenya:

  • Mobile money continues to outperform banks in terms of both access and use. In 2016, mobile money access among adult Kenyans was 81 percent while bank access was only 31 percent. Similarly, 67 percent of adults were registered mobile money account holders while only 28 percent held registered bank accounts. Easy accessibility to mobile money points-of-service (PoS) relative to banking PoS locations has likely contributed to the success of mobile money; Almost 62 percent of Kenyans surveyed said they live within a kilometer of mobile money agents. On the other hand, only 31 percent of Kenyan adults were within a kilometer of a banking agent and only 14 percent within that distance to a bank branch. Similarly, over-the-counter (OTC) mobile money options that do not require registration make mobile money services more accessible than a bank account as OTC use can be accessed without an ID (and even for that matter without a personal phone or a SIM card).


  • Mobile money adds value to users’ financial lives by providing a convenient credit resource and savings utility.   Our Annual Survey found that use cases for mobile money ran the gamut from facilitating payments, particularly P2P, to providing support of borrowing and saving activities.  In fact, approximately eight in ten Kenyan adults were savers in 2016, out of which 54 percent used mobile money as a mode of saving. Similarly, more than six in ten adults had borrowed money and 26 percent of Kenyans who borrowed used mobile money as a source of loans, while only 12 percent use banks.


  • Despite these clear advantages and use-cases, FII data indicates that some aspects of mobile money user experience could still be improved. In 2016, mobile money users’ most commonly cited challenges include service downtime and mobile money agents’ lack of cash flow (See Figure 3). 

FIGURE 3: Top challenges of mobile money users

(Shown: Percentage of active mobile money account holders for each year)

  • The landscape of providers and products is changing rapidly as banks make inroads towards attracting and retaining users through innovative mobile money platforms and partnerships. Over the last few years, banks have resorted to innovative ways of expanding mobile-enabled financial services, including through two different models: partnerships between banks and mobile network operators (MNOs), and banks that run a Mobile Virtual Network Operator (MVNO), which allows them to offer all of their financial services through a mobile platform. These new models allowed some services such as Equitel and KCB M-Pesa to attract active registered mobile money account users in 2016 who have historically regularly used other mobile money products such as M-PESA and M-Shwari (Figure 4).


FIGURE 4: Use of value-added services

(Shown: Percentage of active mobile money account holders for each year)

  • Even with these new developments and the related wealth of new products, Kenyans continue to express a demand for greater access to credit and historically underserved populations continue to be excluded from formal financial services. Overall levels of financial inclusion are lower among women, rural populations, and those living below the poverty line compared to their male, urban, and richer counterparts. The largest gap in active registered financial accounts (amounting to 27 percentage points) was between those above the poverty line and those below the poverty line. This gap could in part be due to the fact that these populations have lower levels of mobile phone ownership and capabilities. (Figure 5). For instance, FII data shows an almost 20 percent difference in advanced mobile phone use between above poverty and below poverty populations (90 percent versus 73 percent respectively).


  • These gaps in Kenyans’ engagement with formal financial services could be improved by programs that focus on providing Kenyans with identity cards. The number of Kenyan adults who held the necessary ID to open a financial account dropped from 91 percent in 2013 to 78 percent in 2016. Tellingly, not having the required state ID was the main reason cited in the FII Survey by men and women for not registering a mobile money account and the second most common reason for not registering a bank account. In April 2016, the government announced a plan to employ 1,200 additional registration clerks to help Kenyans acquire identity cards before the 2017 general election. It remains to be seen what effect targeting this barrier will have on the 2017 FII data.


  • Boosting financial literacy is necessary to ensure that newly financially included Kenyans are prepared to use financial services successfully. FII found that 17 percent of Kenya’s adult population were financially literate in 2016. The Financial Literacy Index measures basic knowledge of four fundamental concepts in financial decision-making (interest rates, interest compounding, inflation, and risk diversification) following the Standard and Poor’s Rating Service’s Global Financial Literacy Survey. As financial products proliferate and become more complex, it is especially important that users and potential users have the skills they need to navigate their options and use services in a way that provide welfare benefits, rather than exposing them to consumer protection risks. It is worrisome for instance that according to the FII data almost one in five borrowers in Kenya did not know their interest rates, or the cost of their loans.

Even as Kenya continues to progress towards improved financial inclusion, driven by mobile money and deepening engagement with advanced services, more must be done to ensure these advances are truly inclusive and result in meaningful outcomes for al Kenyans. The FII team looks forward to seeing how programs targeting barriers such as financial literacy and phone ownership and how innovative partnerships between banks and MNOs may continue to impact the data in the coming years.


What recommendations for accelerating financial inclusion in Kenya do you derive from the Data Fiinder on We’d love to hear from you.


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For more information regarding the FII team’s research in Kenya, please contact:

Beatrice Cheronoh
Research Associate

Financial Inclusion Insights


Financial Inclusion Insights is an ongoing research program funded by the Bill & Melinda Gates Foundation and designed to build meaningful knowledge about how the financial landscape is changing across eight countries in Africa and Asia (Bangladesh, India, Indonesia, Kenya, Nigeria, Pakistan, Tanzania and Uganda). FII produces data and analysis regarding citizens’ financial lives, attitudes, awareness and use of, access to, and advanced engagement with financial products and services. Through our qualitative and quantitative research, we aim to provide demand-side insights into consumers' financial behaviors, produce information that can guide policy interventions, and identify pathways for the poor to gain the financial tools they need to improve their economic circumstances.