Stakeholders call for partnerships to enhance financial inclusion

Stakeholders in the financial sector have called for more partnerships between the government and the private sector to boost financial inclusion and bridge economic opportunities for Kenyan citizens.

This emerged during the Financial Inclusion Conference and Investor Expo held at the Kenya Institute of Monetary Studies on Wednesday.

The conference-themed Enhancing Financial Inclusion- Bridging Economic Opportunities and Outcomes was organised by the Association of Microfinance Institutions (AMFI) Kenya.

Cabinet Secretary for Treasury John Mbadi, who was the chief guest, said while the government has made significant steps in enhancing the financial inclusion of citizens, many remain underserved by traditional financial institutions.

The CS urged development partners and the private sector to innovate and collaborate in creating sustainable solutions that uplift communities and promote shared prosperity.

"Too many communities, particularly in rural and urban areas, face persistent barriers to accessing credit, saving for the future, and investing in their dreams and they remain exposed to numerous risks even as they make strides out of poverty," Mbadi said.

The National Treasury Deputy Director, of Financial and Sectoral Affairs  Ronald Inyangala represented the CS at the event, and read his speech.

Mbadi said the government is committed to working with the private sector to ensure that the collective objective of promoting financial inclusion at the bottom of the pyramid is achieved.

He said the government's  National Financial Inclusion Fund, also known as the Hustler Fund, was born out of that commitment to enable everyone to play a role in the country's economic development.

The CS said despite the fund helping millions of citizens into the financial inclusion bracket, it is facing challenges including borrower default, data security and political risks.

"It is for this reason that partnerships with experienced and capable commercial partners become an important component to help the government offset some of the technical and operational risks," Mbadi said.

"The government of Kenya is committed to working with the private sector to ensure that our collective objective of promoting financial inclusion at the bottom of the pyramid is achieved."

AMFI Chairman Oscar Murigi said that while data shows a remarkable percentage of Kenyan inclusion, millions still lack access to basic financial services, and inequalities persist.

He said this limits individuals' potential and stifles broader economic growth.

He also called for the need to evaluate the financial health and wellness of the included to interrogate how healthy inclusion can be achieved.

He emphasized the need for partnership saying achieving meaningful progress in financial inclusion requires collaboration across sectors and borders.

"Governments, financial institutions, civil society, and international organizations must work together to leverage resources, share best practices, and scale impactful initiatives that address the diverse needs of our communities,"  Murigi said.

"By fostering an enabling environment that supports effective inclusion, innovation, consumer protection and fair competition, we can unleash the full potential of the microfinance service sector to drive inclusive growth and prosperity."

To expand access to financial services, Murigi urged stakeholders to harness the power of technology, policy innovation, and inclusive partnerships to dismantle barriers.

He lauded the Central Bank of Kenya for initiating the proposal for the development of the National Strategy for Financial Inclusion saying it will ensure that everyone is involved and all efforts are consolidated to achieve the national goal. 

He at the same time raised concerns over the lack of proper regulatory framework and constrained funding facing the sector saying it has discouraged local and foreign investment.

Murigi said if the current situation persists, it will hinder progression of the financial inclusion as it is a great barrier to accessing funding both on local and international markets.

"Interventions such the Credit GuaranteeScheme (CGF) and others that are developed to cushion and support the MSMEs have become difficult to access due to regulatory requirements," he said.

"A well-designed regulatory framework will not only enhance transparency, consumer protection, a credible industry that fosters public confidence, attractive for investment and one that prioritises consumer protection, but also stimulates innovation and growth."

The two-day conference that began on Wednesday will end on Thursday.

The Ambassador of the Royal Norwegian Embassy in Nairobi Gunner Andreas Holm was present.

Several investors and developmental partners, Members of the Association of Microfinance Institutions Kenya were also present.