Eighty-five Percent of Kenyans Hold a Payment Product: MasterCard Study
Kenya is making progress in furthering financial inclusion, according to a new MasterCard study, “A Progressive Approach to Financial Inclusion.”
The report explores the progress that 30 developed and developing countries – including South Africa, Nigeria, Tanzania, Uganda and Egypt – have made in enabling access to and driving usage of different financial products including payments, lending, long-term savings or investments, and insurance.
Kenya is in a ‘Payments Ready’ stage when it comes to adoption, with 85 percent of adults holding a bank, mobile, prepaid or other payment product. A ‘Payments Ready’ country displays a high penetration of payments products at a rate of more than 75 percent but less than 95 percent, according to the researchers’ metrics.
However, based on usage of payment products, Kenya moves back to the ‘Early Days’ stage, with only two percent of consumer purchases made electronically, despite 75 percent of adults receiving money via non-cash means. This means that while Kenyans receive a large percentage of their income electronically, they are not using their electronic payment products to transact and depend on cash to do so.
“While Kenya is making significant advances in the ownership of payment products, there is a need to address the gaps in infrastructure and education, which will result in better adoption and usage of the payment products already in existence,” says James Wainaina, Vice President and Area Business Head. “As we continue to develop market-relevant payment products, we are confident that we will see this realized.”
Lending, long term saving and investment and insurance rates in Kenya were found to be at 13.6 percent, 43 percent and 3.4 percent, respectively.
The report highlights that financial inclusion is a progressive measure, with payments as the optimal entry point. In almost all the African countries studied, payment product adoption exceeds the adoption of the other products studied, although local factors affect the different products in different ways.
“The public and private sector must identify current adoption and usage gaps, and actively pursue ways to close these gaps to boost the rate of financial inclusion. This encourages MasterCard to work even closer with our customer financial institutions and government to expand our acceptance footprint and electronic payment usage in Kenya,” says Wainaina.
MasterCard has various payment innovations like prepaid, contactless and mobile commerce products and solutions to help fast track financial inclusion in Kenya, and elsewhere on the continent. The company has launched many initiatives with public and private sector entities that are bringing the benefits and security of electronic payments to the 560 million people in Africa who are currently financially excluded.