in the 21st Century

Formal Financial Inclusion in Kenya: Understanding the Demand-Side Constraints 129
they may face higher barriers to accessing formal banking products due to
language constraints, resulting in their involuntary exclusion. These factors
influence their demand for formal banking products.
While the preferences and constraints of people from different backgrounds
may not necessarily be observable, the FinAccess 2013 survey did collect data
on the language in which people wished to be interviewed, so we can use
language as a proxy for capturing this heterogeneity.
From Figure 14, we see that among those who preferred to be interviewed in
English, Swahili or Kikuyu, between 26% and 55% were formally banked in
2013. These three languages constituted over 72.5% of all the respondents.
In the remaining group, which constituted individuals who spoke at least eight
different minority languages between them, only 13% were formally banked.
While this was a 5% increase from 2009, it was still smaller than the increases
seen by those that speak Swahili or Kikuyu.
Figure 14: Formal bank access by preferred language, 2006–2013
80
Percent formally banked
60
40
20
55% 55% 55%
16%
19%
26%
22% 24% 37%
8% 7%
13%
0
Source: FinAccess 2006, 2009 and 2013 data.
English Swahili Kikuyu Minority language
2006 2009 2013
When we look at this relationship through a multivariate probit, with English
as the base language group and controlling for all other variables, speaking
any other language than English decreased the likelihood of someone being
formally banked. This result is significant at the 1% level for all other languages,
but the size of the effect is largest for those speaking minority languages.
From a policy perspective, there is a need to understand what preferences and
constraints shape the demand of these groups, as well as any barriers they face
that result in them being involuntarily excluded. Based on this understanding,
a strategy designed to meet their existing preferences and to overcome their