CBK recommends commercial banks to match customer needs

Affordability and consumer protection issues such as unexpected charges remain barriers to formal financial service access in Kenya leading many to opt for digital apps.

A report by the Kenya National Bureau of Statistics and the Central Bank of Kenya on financial access has recommended that commercial banks products and delivery channels match customer needs.

The report that was commissioned by the CBK shows that the country has made significant milestones in expanding the access to financial services and products to 82.9 per cent in 2019 from 26.7 per cent and 75.3 per cent in 2006 and 2016 respectively.

This is mainly driven by mobile money.

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The report notes that many Kenyans have formal accounts in various forms, but these accounts are rarely used because they are not solving real day-to-day problems for most households, smaller and microscale businesses and farmers.

The report shows that 19.1 million adults in Kenya use mobile money platforms compared to 10.2 million who use banks.

Hidden bank charges have driven most Kenyans to save through Chamas and access loans via digital apps with knowledge of cost of borrowing and transaction costs being barriers to access to financial services through banks.

Other challenges include high cost of accessing and maintaining a financial service, unexpected charges, loss of money through fraud, lack of transparency in the pricing of financial services as well as lack of education and straight income streams.

Though more Kenyans in rural areas (69.5%) than 67.9 per cent in urban areas do not consider gambling as a good way of making money  and only 1.9 per cent of mobile users indicated having used mobile money for betting, the use of mobile money accounts for betting was reported by 3.7 percent of individuals aged between 18 and 25.

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