Community-Level Impacts of Financial Inclusion in Kenya with Particular Focus on Poverty Eradication and Employment Creation

In the last decade, Kenya has implemented numerous innovative finance solutions that are transforming its financial, economic and social landscape. Some of these initiatives include the launch of mobile-phone financial services in 2007, enactment of the microfinance banking legislation in 2006, the roll out of the agency banking model in 2010, and roll out of shariah compliant services in 2005, among others. These innovations offer immense possibilities for achieving inclusive economic growth, sustainable development, and poverty reduction. Further, the outcomes, with respect to financial services, have evidenced ‘early days’ impact on poverty. This paper provides highlights on Kenya’s journey regarding inclusive finance. It discusses the various reforms and initiatives and consequential impacts of financial inclusion efforts in transforming the lives of the Kenyan populace, with particular focus on impact on poverty reduction and employment creation. The paper also discusses the lessons of embracing innovative and inclusive finance across Kenya, including some of the key risks, and suggests some recommendations/next steps to moving financial inclusion to new frontiers while reducing poverty, creating employment and advancing sustainable economic development.