in the 21st Century

The Geography of Financial Services Providers in Kenya 81
ATMs are the least excluded from the formal financial system. 14 In contrast,
MFIs also target financially excluded clients. Taken together, these results
confirm once again that ATMs are mainly concentrated in wealthier areas,
while MFIs are much more dispersed (as also appears to be the case when
looking at the average distance of the population from the closest MFI) and
reach out to less financially included populations.
Surprisingly, individuals with a bank branch as the closest financial services
provider are not characterised by very high rates of financial access, on average.
What may be behind this apparent contradiction is the presence of bank
branches in areas where the level of financial access of the population is
relatively low. This effect is potentially driven by Equity Bank’s ‘deeper poverty
outreach’ discussed in Section 4.2, which implies that Equity Bank’s financial
access points are located at a greater distance from the main roads and –
arguably – closer to poorer, less financially included populations.
Table 2: Level of financial access of population and distance to closest financial
services provider (averages by category of financial services provider)
Closest financial services provider
Level of financial
access
Distance (km)
Number of
households
Mobile money services provider 2.71 2.51 5,582
Bank agents 2.62 2.19 695
Microfinance institutions 3.10 2.63 30
SACCOs 2.71 3.01 78
Stand-alone ATMs 1.79 0.64 14
Bank branches 2.81 0.99 48
In order to complement the picture provided by Table 2, we analyse
respondents’ rates of credit product usage in relation to the type of financial
services provider they live closest to. Figure 7 shows the breakdown of the
‘credit usage’ variable into the categories ‘never used, ‘currently use’ and ‘have
used’, respectively. 15 Interestingly, it shows that 50% of the individuals who
live closest to bank agents and mobile money access points report to never
having used credit, suggesting once again that these financial services providers
reach out to the most underserved segment of the population in Kenya. By
contrast, individuals who live closer to ATMs than to any other financial
services provider appear to have the highest rates of credit usage (currently or
14 The variable ‘access’ is constructed from FinAccess data on a scale from 1 to 5, where 1 indicates the respondent has
access to formal prudential financial services providers, and 5 indicates the respondent is financially excluded. More
details on this variable are provided in Table 4.
15 These variables are discussed in Section 6.1, Table 4.