Overcoming Financial Inclusion Challenges Through Digital Finance

Abd Elrahman Ali

Chapter Chapter 8 in Empowering the Poor through Financial and Social Inclusion in Africa, 2022, pp 119-136 from Springer

Abstract: Abstract Kenya is a leading economic country with the most developed traditional microfinance when compared to its neighboring countries. Despite that, the country banked population rate remains stagnant at a lower level. Recently, Kenya exerts more efforts to adopt mobile money, which enables the country to achieve relatively high financial inclusion compared to before. This study investigated whether the country would be able to achieve better financial inclusion by going beyond traditional microfinance through the adoption of mobile microfinance, rather than just transferring and receiving through mobile money. Hence, the study uses surveys and structured questionnaires to check the readiness of the unbanked Kenyan community, microfinance providers, mobile operators, and the government for adopting effective mobile microfinance. In addition, this study also describes the benefits accrued to them. The results showed that unbanked Kenya is engaged in microfinance-enabled jobs such as self-employment and retailers. The community which was found to be highly connected with a mobile phone has a lower awareness of mobile microfinance. While respondents admitted using electronic payment in limited situations, cash is still the dominant medium of making payments. Since the unbanked Kenyans are living in remote areas, mobile microfinance would help to improve their access to finance by 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 of this study 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 tariffs, bad corporate governance, and dispute resolution.

Keywords: Financial inclusion; Mobile microfinance; Unbanked community (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:spr:sprchp:978-3-031-00925-9_8

Ordering information: This item can be ordered from
http://www.springer.com/9783031009259

DOI: 10.1007/978-3-031-00925-9_8

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().