The Search for Inclusion in Kenya's Financial Landscape: The Rift Revealed

This report examines the use of mobile money transfer (MMT) services within the context of informal and formal financial service use. It investigates market supply and demand of MMTs using quantitative surveys and qualitative interviews. The study examines whether the rapid adoption of MMT suggests a tectonic shift in Kenya's financial landscape and the greater potential for formal sector inclusion, especially in savings or transactions accounts. Findings include:

• MMT facilitates a wide array of interpersonal transactions that Kenyans undertake within their social networks and relationships;
• The logic of these transactions is one of give and take in ways that circulate resources through these social networks;
• MMT has captured these informal transactions and made them visible;
• This logic is replicated in the popular use of informal groups where people circulate resources among themselves;
• Saving in and through these groups offer benefits that saving in banks and other formal providers do not.

The task for formal financial service providers is to find ways to learn from the features of informal services that are highlighted in the paper in terms of 'give and take' and negotiation in order to provide services that will better respond to client needs.