Consumer protection diagnostic study - FSD Kenya

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ii • CONSUMER PROTECTION DIAGNOSTIC STUDY: KENYA Table of Contents Chapter 11 INFORMAL FINANCIAL SERVICES 27 11.1 Market overview 27 11.2 Legal, regulatory and supervision framework 27 11.3 Consumers and their experiences 27 11.4 Recommendations 27 Chapter 12 CONSUMER ADVOCACY, AWARENESS AND EDUCATION 28 12.1 Current initiatives 28 12.2 Recommendations 29 Chapter 13 CROSS-MARKET CONSUMER PROTECTION 31 13.1 Rationale 31 13.2 Legal, regulatory and supervision framework 31 13.3 Key implementation issues for cross-market authority(ies) 32 Chapter 14 AREAS FOR FUTURE INVESTIGATION 34 Chapter 15 EXPLORING THE CONSUMER RESEARCH FURTHER 35 15.1 Key findings 35 ANNEXES 1 Implications of key diagnostic findings and 38 recommendations for consumer awareness and financial education 2 Detailed findings 42 3 Sources 51 4 List of key sector informants interviewed 54
Tables and Figures FIGURES Figure 1 Financial services usage by Kenyan adults 1 TABLES Table 1 How easy is it to get information about charges or 6 penalties for each of these different savings products? Table 2 Respondents who say that they trust their savings 7 instrument to keep their money safe Table 3 Were the charges, interest and penalties explained clearly? 7 Table 4 Respondents who received a written loan agreement 8 Table 5 Did someone explain the terms of the loan before you 8 signed? Table 6 Once you started paying the loan were you surprised by 8 how much you needed to pay, or how long you needed to pay for? Table 7 Experiences of insurance users 8 Table 8 Respondents with various forms of long term savings 9 Table 9 Respondents who have used a mobile payments service 9 Table 10 Problems users have had with mobile payment service 9 Table 11 How long did it take to resolve the problem? 10 Table 12 Number of respondents approached about a pyramid 10 scheme and invested Table 13 Did you complain to anyone, if you lost money? 10 Table 14 Financial services complaints received at CIN 29 Table 15 Consumer protection within the Kenyan financial 35 services sector Table 16 How easy is it to get informal about charges or penalties 42 for each of these different savings products? Table 17 Number and percent of respondents that have the 42 following types of savings devices Table 18 Respondents who have lost money in savings instruments 43 Table 19 Respondents who say that they trust their savings 43 instrument to keep their money safe Table 20 Were the charges, interest and penalties explained clearly? 43 Table 21 Did you speak to anyone when you had questions on your 44 account? CONSUMER PROTECTION DIAGNOSTIC STUDY: KENYA • iii Table 22 Respondents with loans from various formal and informal 44 institutions Table 23 Respondents who received a written loan agreement 44 Table 24 Were you able to take the loan agreement away to 45 study it? Table 25 Type of collateral required 45 Table 26 Did someone explain the terms of the loan before 45 you signed? Table 27 Were you aware of the extra charges besides interest 46 on the loan? Table 28 Once you started paying the loan were you surprised by 46 how much you needed to pay, or how long you needed to pay? Table 29 Types of insurance held by sample 46 Table 30 Experiences of insurance users 47 Table 31 Respondents with various forms of long-term savings 47 Table 32 Consumer experience with investments 48 Table 33 Responses when asked if would receive a pension 48 when retire Table 34 Do you feel comfortable asking your employer about 48 your pension? Table 35 Responses when asked whether they received the 48 amount they expected Table 36 Respondents who have used a mobile payment service 48 Table 37 How respondents use mobile payment services 48 Table 38 How often do you use M-Pesa, Zain/Zap, etc? 49 Table 39 Do you feel that the charges were clearly explained to 49 you before you started using M-Pesa, Zain-ZAP, etc.? Table 40 How easy was it to get information about the charges? 49 Table 41 Problems users have had with mobile payment systems 50 Table 42 How long did it take to resolve the problem? 50 Table 43 Number of respondents approached about a pyramid 50 scheme and invested Table 44 Did you complain to anyone, if you lost money? 50
Page 1 and 2: ConSumer ProteCtion DiAGnoStiC StuD
Page 3: Table of Contents TABLES & FIGURES
Page 7 and 8: Mass market financial services are
Page 9 and 10: Chapter 1 BaCKGROUnD anD OBJeCTIVeS
Page 11 and 12: Chapter 2 MeTHODOLOGy The diagnosti
Page 13 and 14: significantly, some of the regulato
Page 15 and 16: 4.2 SAVINGS According to the consum
Page 17 and 18: 4.5 LONG TERM SAVINGS: INVESTMENTS,
Page 19 and 20: 5.1 SERVICE PROVIDERS This sector i
Page 21 and 22: some of the M-PESA services, such a
Page 23 and 24: Chapter 6 BanKInG 6.1 SECTOR OVERVI
Page 25 and 26: each of client confidentiality, and
Page 27 and 28: figures. However, the actual effect
Page 29 and 30: esponsibilities regarding disclosur
Page 31 and 32: Kenya example: Standard plain langu
Page 33 and 34: Chapter 9 DePOSIT TaKInG MFIS 9.1 S
Page 35 and 36: Chapter 11 InFORMaL FInanCIaL SeRVI
Page 37 and 38: Table 14: Financial services compla
Page 39 and 40: This section summarizes the rationa
Page 41 and 42: Regulator (NCR) retains responsibil
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Page 47 and 48: Consumer protection objective Key r
Page 49 and 50: Consumer protection objective Avoid
Page 51 and 52: Between 7% and 11% of respondents w
Page 53 and 54: I was able to take agreement; terms
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Were the details explained to you i
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Table 38: How often do you use M-Pe
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Annex 3 SOURCeS Agent Banking Guide
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Research International. (2007). Ban
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CONSUMER PROTECTION DIAGNOSTIC STUD
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nOTeS CONSUMER PROTECTION DIAGNOSTI
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FSD Kenya Financial Sector Deepenin
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