Financial Education For Citizens & Public Authorities Crucial In Improving Financial Inclusion

Financial Education For Citizens & Public Authorities Crucial In Improving Financial Inclusion
Jeremy Awori, Managing Director and CEO Barclays Bank Kenya at the launch of the Absa Africa Financial Markets Index

Kenya’s financial inclusion landscape has undergone a transformation since
2006.

According to the 2019 FinAccess Household Survey launched by CBK, Formal financial inclusion has risen to 82.9 percent, up from 26.7 percent in 2006, while complete exclusion has narrowed to 11.0 percent from 41.3 percent in 2006.

Furthermore, the disparities in financial access between rich and poor, men and women, and rural and urban areas
have also declined remarkably. Key drivers of these changes include: the growth of mobile money, government initiatives
and support, and developments in ICT

However, despite the widespread adoption of digital technology and innovations by financial sector players, more still needs to be done in terms of access to financial education for citizens and public authorities.

Financial Education For Citizens & Public Authorities Crucial In Improving Financial Inclusion
Jeremy Awori, Managing Director and CEO Barclays Bank Kenya at the launch of the Absa Africa Financial Markets Index

According to the Absa Africa Financial Markets Index (AFMI) 2019, policies that support financial inclusion and encourage long-term savings help build up countries’ pool of pension assets, increasing the capacity of domestic investors and stimulating demand for a wider range of financial products.

The index, aims to show not just present positions but also how economies can improve market frameworks to meet yardsticks for investor access and sustainable growth.

Scores are based on six pillars: market depth, access to foreign exchange, tax and regulatory environment and market transparency, capacity of local investors, macroeconomic opportunity and enforceability of financial contracts, collateral positions and insolvency frameworks.

Kenya’s best pillar was legality and enforceability of standard financial markets master agreements while it’s least performing pillar was capacity of local investor. This pillar, which involves countries’ strategies to increase financial inclusion initiatives showed that Kenya’s growing, emerging middle class presents significant potential as retail investors that could be tapped with approximately tailored investment products.

One of these products is Timiza, a virtual banking platform by Barclays Bank PLC soon to be Absa, that operates from a mobile wallet as an equivalent of a current account.

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