in the 21st Century

Introduction 7
and policy is also needed to steer financial markets towards increased support
to the real economy if Kenya’s Vision 2030 (Government of Kenya, 2007) is
to be realised.
Barboni’s analysis develops this conclusion, pointing to continuing infrastructure
constraints to formal financial access which may not be easily solvable until
mobile networks are improved and mobile channels opened up to deliver a
suite of affordable financial solutions that reduce the dependence on cashin,
cash-out outlets. In the meantime, more emphasis may be needed to
sustain and improve semi-formal and informal institutions, including ROSCAs
and ASCAs, but also SACCOs and MFIs, which are reaching remoter and
poorer populations with financial offers that are often more closely tailored to
local needs. While agency models push access into poorer counties, but with
limited financial solutions, Barboni’s analysis shows that SACCOs and MFIs
are providing credit and savings products to more marginalised groups, albeit
within wealthier counties. This underlines the need to support a diverse as well
as competitive market structure that does not just cater to the mass market,
but continues to push for solutions at the margins.
Delivering value for consumers
The first section of the book analyses the drivers of financial inclusion,
questioning the extent to which the profit motives of corporates are able to
overcome the barriers of price and infrastructure that continue to constrain
market development. Later chapters focus our attention on the extent to which
Kenya’s financial transformation has succeeded in delivering relevant dayto-day
financial solutions for Kenyans, in other words, moving beyond the
consideration of usage and access to look at the value proposition of the sector
for low-income populations. Michael King (Chapter 6) finds that the majority
of Kenyans still cite their most important financial services as being ‘exchanges
between friends and family’ and ‘savings under the mattress’. This appears to
be at odds with the impressive rise in Kenya’s formal inclusion, until we look
more closely at the story behind the digital revolution.
Gürbüz and Jack (Chapter 4) and Christopher Yenkey, Laura Doering and
Pete Aceves (Chapter 5) review the effects of mobile money in raising levels
of formal inclusion from 27% to 67% in just six years. Both chapters find that
mobile money had a strong effect on the formalisation of Kenyans’ financial
portfolios. At the same time, Yenkey et al. find that there has been an even
stronger effect on informality, which is masked by our current analytical
frameworks. The authors argue that categorising mobile money as a formal