Last Updated: 4 April 2020
Kenya does not have a financial inclusion policy per se, though Vision 2030 emphasises developing the financial sector and increasing levels of savings to finance the country’s investment needs. Vision 2030 also aims to streamline informal finance, microcredit and savings and credit cooperatives.
Since the mid-2000s, Kenya has made significant progress in improving financial inclusion through legislation such as the Microfinance Law of 2006, the Agent Banking Guidelines of 2010 and 2012, and Credit Reference Bureau Regulations of 2008, which paved the way for the licencing of credit reference bureaux from 2010. Additionally, the National Payments Systems Act of 2014 reduced the cost and increased the convenience of electronic financial transactions. Other initiatives include the introduction of shariah-compliant banking, the reduction in banking transactional fees, and the ongoing review by the Central Bank of Kenya (CBK) of the law on microfinance banking, which aims to increase their role in providing financial services to SMEs. These initiatives have expanded the footprint of financial services, particularly to rural areas.
The CBK has been the main stakeholder advancing financial inclusion, along with the Kenya Bankers Association, financial institutions and the donor-funded Financial Sector Deepening, which has adopted a making markets work for the poor (M4P) strategy. Together, these initiatives have increased the financial sector’s contribution to Kenya’s GDP from 3.2% in 2006 to 7.1% in 2016, representing an annual increase of over 8% per year over 10 years.
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