Beyond Traditional Microfinance: Financial Inclusion for Unbanked Kenyans

Abd Elrahman Ali

No 2016-12, Working Papers from The Islamic Research and Teaching Institute (IRTI)

Abstract: This study investigates whether Kenya would be able to achieve better financial inclusion by going beyond traditional microfinance through the adoption of mobile microfinance, rather than just transfering and receiving through mobile money. The study used survey and structured questionnaires to check the readiness of the unbanked Kenyan community, microfinance providers, mobile operators, and the government for adopting effective mobile microfinance. The results showed that the unbanked Kenya are engaged in microfinance enabled jobs such as self-employment and retailers. The community, which was found to be highly connected with mobile phone has a lower awareness of mobile microfinance. While respondents admitted using electronic payment on limited situations, cash is still the dominated medium of making payment. Since the unbanked Kenyan are living in remote areas, mobile microfinance would help to improve their access to finance through reducing the cost of services, minimizing the physical distance to the access point, better documentation, and improving outreach by opening the untapped markets. The results recommend that mobile microfinance intuitions and mobile operators need to exert joint efforts to promote more awareness and develop appropriate mobile microfinance products. On the other hand, the regulator intervention is needed to eradicate barriers such as high tariff, bad corporate governance, and dispute resolution.

Keywords: Financial Inclusion; Mobile Microfinance; unbanked community (search for similar items in EconPapers)
JEL-codes: G21 O10 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2016-06-12
New Economics Papers: this item is included in nep-afr, nep-mfd and nep-pay
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Journal Article: Beyond Traditional Microfinance: Financial Inclusion for Unbanked Kenyans (2016)
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