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The financial journeys of young women and men in Kenya

March 11th, 2024

FinAccess shows a watershed in Kenya’s digital revolution from 2016, with rapidly escalating uptake of a range of digital products, riding on mobile money rails.

Youth who were aged 16-18 in 2016 would have entered a rapidly digitising financial landscape, as they transitioned to adulthood. Indeed, the late teens of 2016 who are now 21-23 years old, outstrip the population average in uptake of formal (especially digital) accounts and digital technology, including smartphones.FinAccess 2021 also shows increasing parity in secondary education completion rates, with a 4 percentage point gap in favour of boys in 2021. This is corroborated by other data which shows increased levels of gender parity, for example, in secondary enrolment, where girls are now ahead of boys (KIPPRA 2024).

We have long known that education and formal inclusion are strongly related; those with higher levels of education are also more likely to be financially included and take up digital financial solutions. Indeed, a Digital Finance and Gender Segmentation also published today, reveals that the most included and digitally connected women’s segment is marked out by their considerably higher levels of education compared with other segments.

What does this mean for Kenya’s youth?

Young men and women begin their digital finance journey at roughly similar levels. But at the age of 21-23, we start to see some divergence. Young men are more internet enabled than young women with a higher percentage having smartphones; a higher percentage of young men use their mobile accounts daily and have digital savings and loans compared with young women. Conversely, a significantly higher proportion of 21-23 year old women have informal loans and savings compared with their male counterparts.

Why, with similar levels of education and a similar early journey into the digital finance world, are we seeing these disparities by the time youth reach their early twenties? Is increased gender parity and the generation change in uptake of digital finance so recent that 21-23 year olds still exhibit some of the old gender divides? Or is there something else going on?

Strikingly, FinAccess reveals that by the time they reach 21-23, nearly half of young women have families (47%) compared with only 13% of young men; on the other hand, nearly three quarters of young men (73%) are earning income compared with only 52% of young women. Women’s early assumption of family responsibilities means that their participation in the labour force is curtailed despite their similar levels of secondary education, and this may also impact their financial behaviour.

For young women, informal services offer value in supporting their efforts to juggle family responsibilities and income earning. Informal services build social capital essential to managing household liquidity and risks, as well as building financial capabilities through the greater flexibility offered by informal finance. Young men’s aggressive entry into labour markets, competing for (mainly casual) jobs, on the other hand, presents different risks and opportunities, and this may influence their propensity to take up digital technology and digital finance.

While finance alone cannot address the gendered economic divide, financiers could do more to develop solutions which support women’s need to straddle the reproductive and productive economy, for example through enhanced formal/informal linkages and more flexible terms. Digital solutions for teens may also help to give girls more choices and options in relation to their entry into productive and reproductive economies. In the context of Kenya’s demographic transition, taking seriously the need to design appropriate solutions for youth of both genders, but for young girls in particular, is an imperative the financial sector cannot ignore.

For deeper insights, click here for FSD Kenya’s FinAccess youth cohort analysis



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