Reaching the Rural Regions in Kenya through Mobile Money

Joy Kim, Financial Inclusion Analyst|Aug, 2016

MIX is excited to announce the launch of a recently updated financial inclusion dashboard, the Kenya Workbook. This series of interactive data visualizations is the second iteration of the workbook, originally launched in 2014, that explores financial access points in the East African country. As in the initial workbook, GPS coordinates of financial access points were collected by Brand Fusion and FSD Kenya, enabling the creation of the interactive dashboards. In the current workbook, points of agricultural activity have been integrated, allowing users to examine the intersection of the two industries. Additionally, select indicators from the FinAccess Survey (2015) have been included to uncover insights related to the financial behavior of people at the county (second administrative) level. Finally, the dashboard incorporates information on local infrastructure (roads, railroads and airports), population data (density, demographics), and other socio-economic data for a deeper understanding of the state of financial inclusion across Kenya.

Identifying Opportunities for Business Expansion

With the Kenya Workbook, users can search for possible correlations between indicators of interest by overlaying the supply- and demand-side data. For example, the presence of certain financial institution types strongly correlates with product usage per county. With this in mind, it can be inferred that the lack of SACCOs in Wajir and Mandera is the primary reason for the limited usage of SACCO products in these areas. Using the interactive dashboards, users can conduct analyses to identify areas with limited supply to target for business expansion.

While the SACCO example is seemingly obvious, the Supply and Demand Ratio tab allows users to reveal the not so obvious. In Nyandarua and Kajiado, there is a relatively high number of SACCO access points but demand (FinAccess: Currently has a SACCO product) is not as high. What could be the reason for such low usage? Examining the datasets, the reason for this does not seem to be low population density. One possible reason could be that the needs of the local populations are better served by products from other types of financial service providers (FSPs). In Kirinyaga, Murang'A, and Nyeri, we see that the supply/demand ratio is below the national median, due to the supply not meeting demand. SACCOs could look into these three counties for expansion.


Microfinance institutions and microfinance banks could also follow that recommendation. In counties such as Uasin Gishu and Kilifi, the supply of microfinance access points is not meeting demand (FinAccess: Currently has a microfinance product). Could these institutions profit by expanding their reach in these counties? By examining the Supply and Demand Ratio tab, users can identify possible areas for expansion at the county level.

Tapping into the Agricultural Sector with Digital Financial Services

Recent studies have shown there is proven demand for digital financial services for smallholder farmers in the agricultural sector, and that businesses profit better in rural areas than in urban areas due to heightened competition in urban areas[1].  In addition, given that agriculture is often the only source of income for many households[2], the role of digital finance in the agricultural sector cannot be overly emphasized. Not surprisingly, financial access points and agricultural activities are concentrated in areas of high population density, with mobile money agents and bank agents helping to spread financial access points around the country.  In the workbook, locations of agro-dealers are mapped. Agro-dealers are people or entities that engage in the sale and purchase of agricultural inputs., The Geolocator tab allows users to view the location of these agro-dealers and their proximity to various types of financial service providers.  

For mobile money agents looking to tap into this growing market, the first step in locating areas for expansion is by exploring the Supply and Demand Ratio tab. To do so, select “mobile money agents” from the supply side and “agro-dealers” from the demand side to see the ratio between the two indicators. Excluding Nairobi, which is an obvious outlier, there are several counties where the ratio falls behind the national median and are in need of more mobile money agent access points.

As the graph above illustrates, Kericho, Nyandarua, and Kirinyaga are falling behind the national median in terms of number of access points per 10,000 agro-dealers. With this information as a basis, an FSP looking to expand its mobile money agent network can use the Geolocator tab to determine the points of exisiting mobile money agents. For example, an FSP can zoom into Kericho county and view exact locations of agro-dealers and mobile money agents to scope out the competition for initial market research.

These maps help answer questions about financial inclusion but also create new questions that we need to address. For example, because mobile money agents appear in areas of agricultural activity, does this mean that all financial transactions in the agricultural industry are being conducted via mobile phone? Do mobile money agents provide enough product and service options to support the needs of smallholder farmers? These dashboards also push the financial inclusion industry to determine how other FSP types could better meet the needs of the agricultural industry. In a country where three quarters of the population lives in rural areas, FSPs should explore these questions to identify opportunities for business expansion and outreach.