- The financial health of least 74% of households worsened
- 53.5% of families surveyed went without food at some point compared to 33.3% in 2019.
Kenya's financial access inclusion has grown marginally to 83.7 per cent in 2021 up from to 82.9 per cent last year, the slowest growth in the past five years.
The FinAcess 2021 household survey by the Central Bank of Kenya, Kenya National Bureau of Statistics (KNBS) and FSD Kenya attributes the slow growth on the low uptake of mobile money during the period under review.
According to the report, the growth in mobile money uptake was a paltry two per cent compared to eight per cent in 2019, 9.8 per cent in 2016 and 33.7 per cent 2013.
The survey notes that the 11.7 percent of the population which is still excluded from access to formal financial services are mainly in rural areas.
The World Bank defines financial inclusion as means that individuals and businesses have access to useful and affordable financial products and services that meet their needs - transactions, payments, savings, credit and insurance - delivered in a responsible and sustainable way.
The main barriers to greater financial inclusion in Kenya, according to the report, are proximity to financial providers, level of trust of financial providers, excessive documentation, financial literacy and the cost of accessing financial services.
''While finances barriers have persisted over the last decade, the advent of mobile-based financial services has transformed financial systems in Kenya, helping more people to access financial services," said the report.
The survey that mobile money agents present a potential solution to many of the barriers to closing the financial inclusion gap and reaching the excluded.
Financial health for most families worsened at 74 per cent during the period under review after Covid-19 disrupted the social-economic fabric, with at least 53.5 per cent of families surveyed having gone without food at some point compared to 33.3 per cent in 2019.
At least 67.1 per cent of families sampled experienced financial shocks during the research period compared to 36.2 per cent in 2019.
Furthermore, the survey noted that indebtedness was a major challenge facing most families especially in the aftermath of the Covid-19 pandemic, with 42.6 per cent of respondents completely failing to repay their debts.
According to the report, 10.1 per cent defaulted, 12.4 per cent paid less, 15.7 per cent missed payments and 38.2 per cent paid late.
Most families borrowed from the table saving group (Chama) during the period to meet their immediate basic needs. This saw the rate of those who ran to Chama rising to 33.8 per cent compared to 30.1 per cent in 2019.
Borrowing from families and friends also helped households cope with Covid-19 financial hardships, with the reliance rate jumping by a percentage to 19.8 per cent compared to the previous research period.
Families borrowing from shops to survive dropped marginally during the period under review to 29.4 per cent compared to 30.1 per cent in 2019.
The report found out that most people are still using a combination of payment methods, with a section still preferring cash despite the country's high mobile money penetration.
According to the survey, 80.6 per cent preferred both cash and non-cash method, 18.3 per cent preferring cash while only 0.63 per cent used non-cash.