Who we are

Financial Sector Deepening Kenya (FSD Kenya) is an independent trust dedicated to the achievement of a financial system that delivers value for a green and inclusive digital economy while improving financial health and capability for women and micro and small enterprises (MSEs). We work closely with the public sector, the financial services industry, and other partners to develop financial solutions that better address the real-world challenges that low-income households, micro and small enterprises, and underserved groups such as women and youth face.

Who we are

Who we are

Financial Sector Deepening Kenya (FSD Kenya) is an independent trust dedicated to the achievement of a financial system that delivers value for a green and inclusive digital economy while improving financial health and capability for women and micro and small enterprises (MSEs).

We work closely with the public sector, the financial services industry, and other partners to develop financial solutions that better address the real-world challenges that low-income households, micro and small enterprises, and underserved groups such as women and youth face.

FSD Kenya was established in 2001 to support the development of inclusive finance as a means to stimulate wealth creation and to reduce poverty. In 2005, FSD Kenya was constituted as an independent trust. We operate under the supervision of professional trustees with policy guidance from a programme investment committee (PIC).

Our current funders are UK aid, the Swedish International Development Cooperation Agency (SIDA), and the Bill & Melinda Gates Foundation

Why finance matters

Finance is an integral part of economic life and modern financial systems have enabled solutions to a range of social and economic problems, supporting welfare, growth, and development in the process.

The Government of Kenya acknowledges the role of financial services, which are a key sector in the economic pillar of Vision 2030. National objectives under Vision 2030 aim to create a vibrant and competitive financial sector driving high levels of savings and financing the country’s investment needs.

The United Nations Sustainable Development Goals recognise that access to affordable, effective, and safe financial services (savings, insurance, payments, credit, and more) can play a transformative role by fostering equitable growth and furthering vital development goals such as poverty reduction, job creation, gender equality, and food security.

In understanding the role of finance, it is helpful to consider three nested layers of the economy: micro, meso and macro in the figure below.

The micro layer encompasses the individual firms and households that make up the ‘atomic’ units of the economy. The meso level encompasses the associations of these atomic units into more complex forms of organisation, such as firms linked together loosely in markets or sectors of production, or more tightly in value-chains; and the voluntary associations that individuals and households form such as community savings, investment, or welfare groups. Lastly, the macro layer represents economy-wide reservoirs and flows of spending power and capital residing collectively in households, government and firms and used for different ends: private consumption, government spending, investment, and international trade.

The financial system operates through each of these layers, with its effects spilling across their boundaries. At the broadest layer, finance influences how large pools of money move through the economy, and at the most granular layer, finance influences how firms and households manage money and risk and raise funds for large purchases or investments.

Why our work matters

The finance market in Kenya has developed considerably over the years leading to gains in financial inclusion. Eight out of ten Kenyans (83.7%) have access to formal financial services and products, up from three out of ten Kenyans (26.7%) in 2006.

Despite this development and growth, many Kenyans and Kenyan enterprises are being left behind. Financial health has fallen since 2016 across all demographics, with seven out of ten (74%) of Kenyans reporting that their financial lives had worsened in the previous one year.

Kenyans and Kenyan enterprises are being left behind by the finance market because of various constraints besetting the finance market system. The work we will execute in our 2022 – 2026 strategy will contribute towards overcoming these finance market system challenges.

Our 2022 – 2026 strategy

In our 2022 – 2026 strategy, we have set out to contribute to the development of financial markets offering useful, affordable, and trusted financial solutions for Kenyans and Kenyan enterprises, especially for women and micro and small enterprises. Building on learning from both FSD Kenya and the broader family of the FSD Network across the continent, FSD Kenya continues to pivot towards a real economy focus for delivering value-adding finance.

To demonstrate how finance can work for the real economy, FSD Kenya has prioritised several sectors based on a gap analysis for women and MSEs and the potential to demonstrate the power of inclusive finance including:

  • Agriculture and processing
  • Trade value chains
  • Health finance
  • Affordable housing finance
  • Green finance

As we engage at the intersection of the real economy and financial sector, we will focus on shifting key functions of the financial market towards more inclusive finance:

  • Effective policy, regulation, and vision: The enabling environment has shifted towards the idea of more inclusive, digital, and greener finance but FSD Kenya’s 2022-2026 strategy intends to walk closely with policymakers and regulators to turn those ideas into reality through the implementation of government initiatives such as the Digital Finance Policy, Digital Economy Strategy, and National Payments Strategy and the Medium-term plans leading to Vision 2030.
  • Open financial market infrastructure: Although Kenya remains ahead of its peers in terms of the reach and effectiveness of financial market information such as digital payments, credit information sharing and digital IDs, FSD Kenya will seek to facilitate greater openness, interoperability, portability, risk mitigation, and improving financial service delivery, especially at the last mile.
  • Value-adding financial solutions: Given the progress in the enabling environment, financial market infrastructure and financial access, Kenya has a high possibility frontier for demonstrating how to design and deliver useful, affordable, and trusted financial solutions that help users seize opportunities in the real economy and manage risks and shocks. Kenya already has many glimmers of promise and FSD Kenya will partner with the market to better understand when finance delivers value versus when it extracts value and then will work with the market to stimulate the scaling of the value-adding solutions

FSD Kenya’s work in our 2022 – 2026 strategy will be guided by four strategic drivers intended to lead to greater impact from more inclusive finance:

  • Positioning women at the centre of our strategy.
  • Meeting the financial needs of MSEs for growth and resilience.
  • Leveraging the opportunities and mitigating the challenges of a more digital economy.
  • Factoring in climate risks and green opportunities.

Our partners

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