Trinity Economist to Undertake Significant Research Programme on Financial Inclusion in East Africa
Prof. Michael King of the Department of Economics will lead a 26-month research programme on financial inclusion and financial sector development in Kenya. The research programme, funded by Financial Sector Deepening (FSD) Kenya, aims to make a step change in our understanding of the use and potential of financial services to support the livelihoods of Kenyan households.
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, Prof. King said, “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.
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.