Financial inclusion and energy access: Evidence from Kenya

Michael Mbate and El Hadji Fall

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper examines the relationship between financial inclusion and energy access, leveraging micro-level survey data from Kenya (2016–2018) and employing propensity score matching to establish causal linkages. The analysis reveals that financial inclusion significantly enhances energy access, with distinct variations across financial institutions and energy types. Financial inclusion operates through three critical mechanisms: increasing households’ willingness to pay for energy, alleviating upfront connection costs via flexible payment schemes, and enabling seamless energy-related transactions through digital platforms. These findings underscore the importance of inclusive financial policies and the role of formal and informal financial institutions as intermediaries in addressing energy poverty.

Keywords: digital platforms; energy access; energy costs; financial inclusion; propensity score matching; willingness to pay (search for similar items in EconPapers)
JEL-codes: G21 N27 O13 Q40 (search for similar items in EconPapers)
Date: 2025-04
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Published in Innovation and Green Development, April, 2025, 4(2). ISSN: 2949-7531

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:127538

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