Effect of financial inclusion on economic growth in Kenya

Abstract

This research project investigates the impact of financial inclusion on economic growth in Kenya, with a particular focus on the roles of mobile and agency banking. As digital financial services continue to evolve, understanding their influence on economic dynamics becomes crucial for policymakers and financial institutions. The study employs a descriptive and causal research design to analyze the relationship between financial inclusion and GDP growth, utilizing time series data from 2007 to 2023. Through rigorous data analysis using STATA software, the research examines how mobile banking, agency banking, and digital lending services contribute to enhancing financial accessibility and promoting economic participation among underserved communities. The findings highlight the significance of regulatory frameworks in fostering responsible lending practices and the potential of alternative credit scoring methodologies to expand financial access. Additionally, the research identifies demographic factors influencing financial inclusion and suggests strategies for improving service delivery and customer satisfaction. Ultimately, this study aims to provide insights that can guide stakeholders in creating a more resilient and inclusive financial environment, thereby supporting sustainable economic development in Kenya.