in the 21st Century

Formal Financial Inclusion in Kenya: Understanding the Demand-Side Constraints 139
When we analyse the marginal effects of age in a multivariate probit model,
we find that it has a positive but diminishing effect on the likelihood of having
a formal bank account. The result is significant at the 10% level for age, but
not significant for age squared. This is in line with the theory and empirical
research on the demand for formal banking products.
It is important for policymakers to consider how they can increase the demand
for formal banking products for those outside of the 26–54 age range. This
would involve promoting savings behaviour among younger cohorts through
the use of banks, and promoting the use of banks among older cohorts as a
safe place to store money that can be easily accessed.
Gender
Previous research has highlighted the importance of access to finance for
women as a means of economic empowerment (Cheston and Kuhn, 2002).
Recent research found that for female entrepreneurs, enabling access to
savings could increase enterprise investment, as well as savings (Dupas and
Robinson, 2013). In an experiment carried out in Nepal that provided free
savings accounts to women, Prina (2015) found that increased access affected
women’s ability to save, as reflected in the increased monetary and total assets
of the household.
Yet women are less likely to be banked than men. Data from the Global Findex
database found that women in developing countries are less likely than men to
have an account in a formal financial institution, with over 1.3 billion women
globally outside of the formal financial system (Demirgüç-Kunt et al., 2013).
While this gender gap is smaller in sub-Saharan Africa, where 22% of women
have a bank account versus 27% of men, the gap is still statistically significant
(Demirgüç-Kunt et al., 2013).
The conceptual framework predicts a gender gap in formal financial inclusion,
and we find that such a gap is prevalent in Kenya. In a recent study on rural
banking in Western Kenya (Dupas et al., 2012), the authors found that only
10% of women have bank accounts, compared to 21% of men. This finding
is echoed in the recent FinAccess 2013 survey in Kenya, as can be seen in
Figure 22.