July 7th, 2013

2013 was a year of mixed fortunes for Kenya and FSD Kenya. Following a peaceful election, a new government was formed at the beginning of the year and there were signs that economic growth was finally getting back on track. However terrorism and rising insecurity cast a long shadow over the year. The attack on the Westgate shopping centre in Nairobi shocked the nation and the whole world. Tragically, FSD Kenya lost a member of its own team, Ravi Ramrattan. A brilliant young economist, Ravi had contributed enormously to our work in the two years in which he had been with us. We continue to miss him.

Kenya’s new constitution places a strong emphasis on rights and accountability. There is a growing understanding of the need for organisations, whether commercial or otherwise, to be accountable to its stakeholders. This is especially important in the financial system which plays such a pivotal role in the economy and society. FSD seeks
to help influence the development of financial markets in a way which benefits the livelihoods of poor Kenyans. This report presents an overview of the work we’ve been involved with during the year. Our approach is not based on seeking ‘quick fixes’ to financial exclusion problems but finding ways to support the evolution of market solutions to the needs of lower-income Kenyans and under-served growth businesses. We remain unrepentantly ambitious: we want to help make financial markets work for the poor.

The indicators we have suggest that Kenya continues to make strong progress in improving financial inclusion. Although we don’t have new results for the year from the FinAccess survey on financial inclusion, the signs of continued market dynamism remain strong. The growth in usage of the M-Shwari banking product through the year was unprecedented in the history of Kenya’s financial system. Within a year more than five million people had signed up for this combined savings and loan service, accessed through Safaricom’s M-Pesa system. This confirms two important propositions: first, that relevant, accessible financial solutions will find ready demand and second, that technology will play an increasingly important role in delivering financial inclusion.

FSD Kenya. (2013). The 2013 FSD Annual report. Nairobi, Kenya: Author.

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