in the 21st Century

The Geography of Financial Services Providers in Kenya 83
financial services providers are more likely to target relatively wealthier areas,
which would ensure a higher volume of activity and greater profits.
Figure 8 shows the relationship between FinAccess survey respondents’ level
of income from their primary source (expressed in log) and the distance from
their place of residency to the closest financial services provider (expressed
in kilometres). Each dot represents one respondent. It is important to note
that previous studies focusing on the incomes of Kenyan households have
highlighted that they often derive from multiple sources, and are highly subject
to volatility. 16 Thus, the relationship displayed in Figure 8 may not be exhaustive
in explaining the diversity of incomes an average household may receive (which
is strongly related to individual financial management capability).
Yet, the result is suggestive of a negative relationship between the distance to
a financial services provider and the individual level of income. Individuals
who live closer to a financial services provider are more likely to report a
higher level of income.
Figure 8: Relationship between respondents’ income (in log) and distance to
closest financial services provider
14
Log of respondent’s income
12
10
8
6
4
0 20 40 60 80
Distance from the closest financial service location (km)
In order to corroborate this finding, we study the relationship between
respondents’ proximity to a financial services provider and their level of wealth.
The wealth index considers a wide range of measures (including the type of
16 See, in particular, the Kenya Financial Diaries research project (http://www.fsdkenya.org/pdf_documents/14-08-08_
Financial_Diaries_report.pdf).