Segmenting the financial services market for women in Kenya

March 11th, 2024

The gender gap in uptake of finance has grown steadily smaller over the years. But gaps still remain- for instance in 2021, only 32% of women were banked compared with 43% of men. As we seek to expand finance for women, how can segmentation help us to better understand the opportunities to serve women better?

FSD Kenya recently conducted a segmentation of the women’s market in terms of digital connectivity and uptake of formal finance. We identified 4 key segments:

Segment 4

The top segment, segment 4 which makes up  24% of the women’s market, is digitally connected- has a smartphone- is formally included and financially active (uses a formal account weekly or monthly). These women are on average in their late twenties, mostly urban and with a high percentage of formally employed and business owners. Critically, they differ significantly from other segments in terms of education- over seventy percent have finished secondary and/or have a college education compared with less than 27% for other segments. These women are the classic market for formal finance and are well served. But they also present strong opportunities for growth and are therefore worth paying more attention to.

Segment 3

The second segment, segment 3, which also makes up 24% of the women’s market, is also formally included and highly financially active, with the highest number of chama users. Segment 3 differs from segment 4 in that these women don’t have smartphones and rarely access the internet. Segment 3 is older – on average, mid thirties- and spread across rural and urban. We think of segment 3 as the ‘busy women’ identified in an early ethnographic study done by FSD Kenya on chama users. They play a critical role in the economy, straddling formal and informal, bringing up households and generating income. The challenge for financiers in serving this segment is their diverse needs and higher levels of informality. Can digitisation spur innovation around creative solutions for Kenya’s ‘busy women’ who are at the heart of our communities and informal economies?

Segment 2

Segment 2 is the orphan of the financial sector. These women are the largest women’s segment, making up 30 percent of women in Kenya (4.58 million). They have formal accounts, but use them infrequently. They also use chamas, but less actively than segment 3. Segment 2 women are mostly rural, less educated, with a high percentage of farmers, casual labourers and dependents. The challenge for financiers is bridging the rural urban divide to reach women like these. Again, like segment 2, segment 3 women play an increasingly significant role in Kenya’s economy, especially in an era of climate change and vulnerability to changes in global markets. These rural women are at the frontier of resilience, curating Kenya’s land-based resources and playing an important role in food security. What partnerships are needed for financiers to play a role in serving these markets?

Segment 1

Finally, our segment 1. Segment 1 is financially excluded– either completely or accessing services through the accounts of others. These are mostly youth with an average age of 21; they make up 22% of the population. Like Segment 2, these young women are less educated and predominantly rural. A very high percentage are dependent on others for their source of income. Urban, more educated youth do not feature so strongly in segment 1, suggesting they are already making the leap into financial and economic inclusion at a young age (The financial journey of today’s Kenyan youth blog ). Segment 1 is particularly worrying. Are we leaving out our rural youth, especially our young rural women who make up 22% of the women’s market? What does this mean for us as a country as we look to the future? It behoves decision makers in policy and industry who shape the future of Kenya’s economy, to think very seriously about how to tackle the challenge of bringing this segment into the financial and economic fold.

Kenya’s women are diverse. But all have potential to take the country forward in facing the economic, social and climate related challenges that lie ahead. The gauntlet is down for Kenya’s financial sector to put their heads together, create partnerships, and figure out how to serve Kenya’s diverse women.

For more and deeper insights, click here for FSD Kenya FinAccess gender segmentation deck



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