Behavioural Biases in Financial Access and Usage Divide: The Kenyan Case

Jared Osoro, Davis Bundi and Josea Kiplangat

Working Papers from African Economic Research Consortium

Abstract: The noticeable strides Kenya has made on digital financial services that anchor the positive narrative of financial inclusion is evidently leaning towards payment services. However, digital divide still exists due to behavioural heterogeneity. This paper explores the influence of behavioural biases in access and usage of mobile money services, the dominant digital financial services in Kenya. The 2021 FinAccess data anchors the empirical investigation on the extent to which behavioural biases are an obstacle to access and usage of mobile money. Deploying descriptive statistics on gender disaggregated data and a probit model to estimate marginal effects, we ascertain that behavioural biases contribute to the digital divide evident among men and women households in Kenya. These biases drive a wedge between access and enhanced usage of digital financial services in a manner that slows the sequential process of the former, leading to the latter. Beyond advancing literature in this area, this paper proffers arguments in favour of putting in place measures to enhance household incomes that have a gender lens, for they have the potential of ameliorating the gaps underlying financial exclusion of women and low-income earners in mobile money access and usage. It also argues for a policy position that discourages the consideration of basic digital financial services as a revenue mobilization platform through direct taxation as that could be counterintuitive.

Date: 2024-08-15
New Economics Papers: this item is included in nep-mon and nep-pay
Note: African Economic Research Consortium
References: Add references at CitEc
Citations:

Downloads: (external link)
https://publication.aercafricalibrary.org/handle/123456789/3875 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aer:wpaper:0cdc9b6d-5d8c-46e6-8f00-e9039cb8238b

Access Statistics for this paper

More papers in Working Papers from African Economic Research Consortium Contact information at EDIRC.
Bibliographic data for series maintained by Daniel Njiru ().