Consumer protection diagnostic study - FSD Kenya

42 • CONSUMER PROTECTION DIAGNOSTIC STUDY: KENYA
Annex 2
DeTaILeD FInDInGS
2.1 FINANCIAL CAPABILITY
Measuring financial capability and understanding is a difficult exercise.
Looking at one set of evidence may indicate that consumers seem confused.
According to FinAccess 2009, only 37% of respondents could correctly solve
two math problems involving division and multiplication. However, there
were also a high number of respondents (47.5%) who said that they did not
know the answer to the questions, which suggests that respondents might
have been self-conscious, more than ignorant.
For the most part, respondents appeared to find it relatively easy to obtain
information across many different types of instruments. Table 16 shows how
respondents ranked how easy it was to get information on different types
of savings instruments. Naturally, informal instruments such as ROSCAs
and ASCAs were considered easier to get information, and banks, MFIs and
SACCOs more difficult, but overall, most respondents found it very easy to get
information about the products they used. This was also reflected in surprising
bits of knowledge that would come up in the focus groups - awareness that
the Central Bank issues banking licenses, knowledge about a banking act, use
of the correct financial terms.
What was less clear was the bigger picture. For example, the focus groups
reflected an impression that people don’t really know where their money is
safe. There were doubts expressed about all types of institutions - in banks, in
SACCOs even in M-Pesa. In the words of one man from Ahero “…at the end of
the day, we don’t know if our money is not safe…”
Moreover, there was a lack of clarity about recourse. Respondents in the focus
groups were not certain whether, in practice, they were dealing with problems
that had a legal basis or not, and they were not always sure whether they had
something legitimate to complain about or not, let alone who to complain to.
Table 17: Number and percent of respondents that have the
following types of savings devices
Table 16: How easy is it to get informal about charges or penalties for each of these different savings products? (1 = very easy; 5=very difficult)
Difficulty rankings Bank savings MFI Sacco ASCA Rosca Share across all
types of financial
institutions
1 (very easy) 54% 61% 63% 79% 81% 66%
2 28% 29% 28% 16% 15% 23%
3 9% 6% 7% 3% 2% 6%
4 6% 3% 2% 0% 0% 3%
5 (very difficult) 1% 1% 0% 0% 0% 0%
Refused/ did not
know
Number of
respondents
One man from Eldoret explains “I think we are lacking some information like we
don’t know if I am wronged by a bank or micro finance. I don’t know if there is
a certain mechanism which I need to address and one thing that comes to my
mind if I am wronged is my relative who is an advocate and then you go report
so that he can follow it for you but we don’t know, okay I don’t know whether
there is any set mechanism which can follow up things on my behalf or when I
am wronged by a financial institution.” His views are not uncommon, and most
stories about how find redress to a problem ultimately involved personally
hiring a lawyer.
2.2 SAVINGS
The consumer protection survey covered a population with more access to
different types of savings products than the national population. As Table
17 below shows, 59% of the sample has a bank account of some sort, while
FinAccess 2009 suggests that only 24% have a bank account. The percentages
for the consumer protection are also higher for SACCOs, MFIs, ASCAs and
ROSCAs.
Consumer
protection
survey
2010
FinAccess
2009
Bank
savings
account
SACCO MFI ASCA ROSCA
merrygo
round
54% 20% 15% 17% 47%
24% 61 9% 3% 8% 32%
2% 0% 1% 2% 2% 2%
949 238 303 266 723 2479
61 For FinAccess 2009, we counted respondents who had any of these types of accounts: Postbank
account, bank savings account, current account, bank account that meets every day needs and ATM
card.