2023 annual report: Letter from the CEO

May 28th, 2024

Reflecting on 2023 points to both exciting developments and significant challenges impacting inclusive and green financial sector development in Kenya. As we think about how to steer the future of the sector to maximise its value for all Kenyans, I want to take this opportunity to share some key messages from three events I participated in during the year.

The Central Bank of Kenya convened CEOs from the financial sector to consider insights from FinAccess and the launch the Micro and small enterprise tracker survey. I began my presentation at the event by exploring surprising paradoxes in Kenya’s financial sector such as:

  • Despite impressive gains in financial inclusion, why has financial health declined rapidly?

  • Although formal use of savings and credit has grown, why has there been a decline in the use of formal products to meet people’s needs?

  • Why is it that consumer protection attributes are ranked high for choice, safety, and fairness, but they are ranked much lower for suitability, meeting purpose, and customer voice?

  • Even though women borrowers in the formal sector are less likely than men to default, why do fewer women than men have access to formal loans?

  • Although climate-related risks are growing for farmers, why is it that only a few have been able to invest in resilience?

I closed my remarks with a deep dive into the power of the FinAccess county report and disaggregated data. Financial access varies widely across counties from 58% in West Pokot to 95% in Nairobi County. Digging deeper into the data points to unique characteristics within counties such as the four counties whose gender gap is in favour of women (Taita Taveta, Kirinyaga, Laikipia and Vihiga). One country comparison statistics that shocked the audience is that there are more people in Nairobi with a smartphone than there are people in any other county.

The second event I would like to highlight took place during the visit of Her Royal Highness Queen Màxima of the Netherlands, United Nations Secretary General’s Special Advocate for Inclusive Finance for Development which FSD Kenya helped facilitate. With the National Treasury Cabinet Secretary, Professor Njuguna Ndung’u, she co-hosted a roundtable headlined Open Finance: The potential of New Approaches to Data Sharing to Increase the Breadth and Depth of Financial Inclusion and Support Broad-Based Financial Resilience. The roundtable pulled together a high-level group of leaders across the public and private sectors to consider both the barriers and opportunities to making this a reality in Kenya. At the start, the Special Advocate  encouraged the group to consider how open finance could increase competition, decrease risks and contribute to stronger financial health. The CS challenged the group to leverage Kenya’s history of being an innovator in finance and not lose ground on financial inclusion and digital finance.

While moderating the discussion, I started with the regulators to consider how competition policy, data and consumer protection and the National Payments Strategy could contribute to the principles of open finance. With the banks, we focused on the values of customer centric solutions and expanding choices available. With the mobile money operators, we discussed what could be learned from their interoperability journey and unlocking innovation.  With the fintechs, we learned about how being able to connect with multiple financial service providers enables them to deliver unique value to targeted customer segments such as micro and small enterprises. Finally, the industry associations emphasised the value of collaborations across and within industries to ensure that customers are protected, given more opportunities and grow the economic pie for all. We remain hopeful that FSD Kenya can continue to support Kenya’s journey towards open finance.

The last event that I would like to highlight is the Sustainable Finance Catalyst Awards, now in its seventh year of incentivising the banking sector to take economic, social and environmental sustainability seriously.  My overall encouragement and challenge was linked to the saying that “Tough times never last – tough people do.” We have seen that when financial sector players have the courage to reach out to the more “difficult” segments such as micro and small enterprises, farmers impacted by climate change and women, what they learn makes their overall business more resilient in difficult seasons and gives them a competitive edge to last beyond these tough times.





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