in the 21st Century

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78 Kenya’s Financial Transformation in the 21st Century Figure 5: Location of mobile money agents across the national territory Mobile money FSP Trail Primary route Secondary route 4.3 Relationship between number of agents and population density Figure 6 displays the relationship between the number of mobile money agents in each county (where there is at least one mobile money agent) and the population density at the county level, measured as the number of people per square kilometre. The rationale is to provide further evidence on the expansion strategies followed by financial services providers in Kenya, and to understand how these strategies relate to the size (measured in terms of population density) of different Kenyan counties. A similar exercise to this was carried out for Tanzania by Mas and Elliott (2014), and in line with their results, we find a clear positive relationship between the number of mobile money agents in a county and the population density in that geographical unit. The results from Figure 6 complement what we have already seen in Figure
The Geography of Financial Services Providers in Kenya 79 1 and Figure 5 – financial services providers are more likely to be located in more populated areas, which are also characterised by better infrastructure and lower levels of poverty. 13 Indeed, counties like Nairobi, Kiambu, and Mombasa, with high population densities, also benefit from very large shares of mobile money services providers. Conversely, the presence of mobile money services providers in counties with a much more scattered population – like Marsabit, Isiolo or Tana River – is very limited. A potential explanation for the lack of mobile services providers in these areas is that, at present, there is no business case for setting up financial access points there. Figure 6 reveals that more efforts are needed by institutions to facilitate the penetration of financial access points, particularly in counties where the population density is very low. Figure 6: Relationship between number of mobile money agents and population density at the county level (log-log scale) Number of mobile money agents (log scale) 10 8 6 4 TAI GAR ISI WAJ TUR SAMLAM TAN MAR MAC UAS MER NYE KAK KIRKISI MUR HOM BUN KISU KIL MAK NYAN KIT KER SIAMIG LAI NAR EMB NAN TRA BUS BAR KWA NYAM THA VIH MAN WES KEI NAK BOM KIA NAI MOM 1 3 5 7 9 Population density (people per km 2 , log scale) County Linear prediction Notes: BAR: Baringo; BOM: Bomet; BUN: Bungoma; BUS: Busia; EMB: Embu; GAR: Garissa; HOM: Homa Bay; ISI: Isiolo; KAJ: Kajiado; KAK: Kakamega; KEI: Keiyo-Marakwet; KER: Kericho; KIA: Kiambu; KIL: Kilifi; KIR: Kirinyaga; KISI: Kisii; KISU: Kisumu; KIT: Kitui; KWA: Kwale; LAI: Laikipia; LAM: Lamu; MAC: Machakos; MAK: Makueni; MAN: Mandera; MAR: Marsabit; MER: Meru; MIG: Migori; MOM: Mombasa; MUR: Murang’a; NAI: Nairobi; NAK: Nakur; NAN: Nandi; NAR: Narok; NYAM: Nyamira;; NYAN: Nyandarua; NYE: Nyeri; SAM: Samburu; SIA: Siaya; TAI: Taita Taveta; TAN: Tana River; THA: Tharaka-Nithi: TRA: ; Trans Nzoia; TUR: Turkana; UAS: Uasin Gishu; VIH: Vihiga; WAJ: Wajir; WES: West Pokot. Source: Data on the area (sq. km) of counties in Kenya are taken from http://www.geohive.com/cntry/kenya.aspx. 13 A similar pattern, although less pronounced, exists for the other categories of financial services providers (ATMs, bank agents, bank branches, MFIs and SACCOs); the results for these are available upon request.
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Kenya’s Financial Transformation
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FSD Kenya 5th floor, KMA Centre Cor
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Dedication Ravi Ramrattan was FSD
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CHAPTER 1 Transformation of Kenya
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The Digitisation of Financial Servi
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Is Kenya’s Digital Revolution Inf
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CHAPTER 6 Measurement of Financial
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CHAPTER 7 Financial Capability and
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