New Research Programme on Financial Inclusion in East Africa
Mar 24, 2014
A new research programme at Trinity College Dublin's Department of Economics focusing on financial inclusion and financial sector development in Kenya aims to make a step change in the understanding of the use of financial services to support the livelihoods of Kenyan households.
The 26-month research programme, led by Dr Michael King, Assistant Professor in Economic Policy, is funded by Financial Sector Deepening (FSD) Kenya. The research programme will investigate important issues such as the interaction between poverty and financial inclusion, the geospatial dimensions of financial access, the impact of new financial services and the changing role of mobile banking services. The research programme will have a special focus on assessing the impact of new financial products and related technologies.
Access to banking services is widely considered essential for the economic wellbeing of households in low-income countries. Despite this, levels of access to financial services vary widely with up to 2.5 billion people globally outside the formal banking system. Previous research by Trinity economists in 2012 estimated that approximately 80 percent (300 million people) of the population of eleven Sub-Saharan African countries do not have a formal bank account and are deemed ‘financially excluded’.
Speaking at the launch of the programme, Dr King commented: “It is a very exciting time to conduct banking related research in Kenya. Kenya is widely acknowledged as a global leader in innovation of financial services for low-income households and Nairobi is a banking and insurance hub for East Africa. These achievements have been tracked by recent data collection efforts. The proportion of adults with access to formal financial services has risen from 17% in 2006 to 33% in 2012, while the use of mobile money has risen to 62% of the adult population since its launch in 2007. Despite this, there is still a long way to go before financial products are properly designed to meet the needs of poor households.”
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