An assessment of the effect of Agent Banking on financial inclusion of low income households in Kenya
Matoke, Sylvia N.
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There is a serious problem of limited access to financial services among low income households as majority of low income households keep their money under mattresses or in "home banks". In recognition of these hurdles, agent banking has been flaunted by financial stakeholders as with potential to include many "unbanked" low income households. Proponents of financial inclusion argue that including 38% of Kenyans without access to even the most basic financial services will enable low income communities build savings and access credit. While these arguments have often provided the theoretical justification for widespread government intervention, evidence on the success agent banking in including low income households in Kenya in the financial mainstream is not clearly known. Specifically, the research intended to establish the extent to which agent banking has enabled the residents of Kibera slums access financial services such as micro-credit and micro-savings. Self-administered questionnaires were distributed to 80 respondents residing in Kibera slums .The respondents were randomly selected from the 6 regions of Kibera slums. Findings were summarized and presented in terms of tables and figures. Anova was used to determine the saving patterns of the respondents. The findings suggest that while there has been an increase in the number of low income households in the financial mainstream. there is no clear correlation between agent banking and increased savings and access to micro-credit facilities among the low income households in Kibera slums. This study concludes that inclusive banking does not necessarily result to automatic exit from poverty by poor households. The study recommends revision of agent banking in relation to the needs of poor households.