Kenya’s financial inclusion story is often presented as a remarkable success.
Millions of adults can now access bank accounts, mobile money, digital credit, Saccos, insurance and investment products.
But access to financial services is proving to be a poor substitute for financial security.
The latest FinAccess survey expose the uncomfortable side of Kenya’s financial revolution.
The system has become highly efficient at giving households access to money, but far less effective at helping them accumulate enough of it to withstand shocks.
Only a quarter of adults could raise emergency funds within three days in 2024.
Worse, the reliance on bank savings for emergencies fell sharply, while dependence on family, informal lenders, Saccos and other sources increased.
For many households, a financial shock therefore does not mean drawing down savings. It means taking another loan.
This is the curse of financial inclusion: a worker can be fully connected to the financial system while remaining financially fragile.
The problem is not that borrowing is inherently bad. Credit can help households manage genuine emergencies, finance education, buy homes or expand businesses.
The danger comes when borrowing becomes the permanent solution to inadequate disposable income.
Declining real wages, rising living costs and expanding family obligations have squeezed households across income groups. Even higher earners can find themselves trapped by lifestyle inflation and recurring commitments.
Kenya must therefore move beyond celebrating the number of people with accounts and wallets.
The real test of financial inclusion should be whether households can pay their bills, survive two missed salaries, avoid destructive debt and save for retirement.
Financial inclusion should not merely make poverty easier to finance. It must help Kenyans escape it.
