Kenya has been ranked first among 26 developing countries in a study by the Brookings Institution on the inclusiveness of the country's economy and ease of access to financial services.
The Financial and Digital Inclusion Project report examines the equal distribution of financial services in selected countries in Africa, Asia and Latin America, with the results suggesting that Kenya leads the rest of the world in promoting wider sharing of the nation’s growing wealth.
Other African countries also received high ratings as well in the survey carried out by the Washington based research institution.
South Africa is fourth, Uganda fifth, and Rwanda seventh on the list, ahead of countries such as Chile, India and Turkey. Tanzania was ranked 17th.
Kenya is a world leader when it comes to mobile money adoption, particularly in low-income households. The country's mobile money ecosystem is complex, with services that allow for savings and access to credit in addition to cash remittances.
The survey looked at four key aspects of financial inclusion; government commitment, mobile capacity, regulatory environment and adoption of traditional and digital financial services.
Kenya scored highly in each category with an average score of 84% that placed it five points ahead of second placed Colombia. Rwanda, Tanzania and Uganda also ranked highly for access to mobile money resources.
However, the report suggested that the increasingly thriving financial inclusion ecosystems present in Kenya, Uganda, Tanzania and Rwanda can be made even stronger with increased build outs of mobile capacity.
The study cautioned that mobile money alone is not enough to drive financial inclusion, and more needs to be done to make financial services readily available, particularly to low-income households.
Uganda was ranked fifth in East Africa in income economy on Brookings’ scorecard. This is due to a failure to facilitate greater competition within its financial services ecosystem, and the failure to expand affordable financial services among low income consumers.
Government interference in the ecosystem was also to blame, with the recent shutdown of mobile money services during this year’s presidential elections and the recent instances of fraud in financial institutions also adding to the negative assessment.
Rwanda on the other hand was praised for the progress it has made toward its stated objective to digitize everything. Despite being described as a lowest income country, Rwanda is committed to advancing financial inclusion and the promotion of digital financial services.
The survey however pointed out the disparities in mobile phone ownership in Rwanda with women, citizens living below the poverty line and residents of rural areas being the most affected. There is a 21 percent point gap in handset ownership between men and women in Rwanda.
Tanzania has also made significant strides towards its financial inclusion with its mobile accounts surpassing bank accounts as noted by the survey.
However, Tanzania’s consumer access to mobile technology is heavily affected by heavy taxation of the sector. Taxes are said to account for one-third of the cost of mobile phone ownership in Tanzania.
Financial inclusion remains a pressing concern in developing countries, and those without access to formal financial services may find it hard to access credit and savings facilities. This report identifies each country's strengths and weaknesses using metrics such as the level of mobile money use and how committed the regulators are in promoting financial inclusion.
Facilitating financial inclusion is essential to promote the wellbeing of low-income households so that they can benefit from broader economic development and access to the mainstream economy.Share this article via: