Mobile and banking agents lift financial outlets by 33pc

The number of outlets where Kenyans access banking, insurance and other financial services have risen by one-third in just two years, a new survey by financial inclusion researcher FSD Kenya shows.

The 2015 FinAcess Geospatial Mapping Survey shows that between 2015 and 2013, the number of mobile money transfer service kiosks, bank and insurance agents — collectively known as service points — increased by 33 per cent.

According to the survey there are now 218 service points for every 100,000 people up from 162 outlets in 2013.

FSD Kenya’s report says the reforms by Central Bank of Kenya (CBK) and innovation by commercial lenders have been the main drivers of the growth.

“The Kenya financial inclusion landscape has undergone considerable transformation. This is as a result of improved infrastructure, technological innovation, institutional developments as well as financial system policy and regulatory reforms,” it says.

Mobile money transfer service agents increased to roughly 68,000 from 50,000 while bank agents have increased to 13,500 from 8,000 over the same period. On top the study found that 73 per cent of the population now lives within a three-kilometre radius of a service point up from 59 per cent of the population in 2013.

The uptake of agency banking and mobile money transfer services has also resulted in Kenyans in areas where there are no commercial bank branches — especially in the northern parts of the country — accessing services.

Increased use of bank and mobile money transfer agents has over time forced commercial banks to change tack when it comes branch expansion.

They have largely put brakes on expansion of their branch networks because more transactions are now being carried out through the agents.

“Agency banking has seen the number of operational agents growing to over 22,000 and contributing 50.4 per cent of all bank cash transactions exceeding customers’ cash transactions processed in branches and ATMs combined,” said Equity Bank when releasing third quarter results earlier in the week.

The survey also found that agents who previously only offered mobile money services were now embracing banking services at their outlets.

The study is expected to help the government, banks, entrepreneurs and other users identify the best sites to set up branches, agencies and other facilities,” Central Bank said earlier.

“Such data can be used towards identifying the underserved geographical areas and instituting strategies and interventions that will address the identified bottlenecks to bring those populations who are otherwise excluded into the formal financial system.

“On the other hand, for the private sector players, GIS (geographic information system) data can be used to identify opportunities for expansion as well as boosting their marketing strategies to be more geographically targeted for maximum effectiveness.”