Challenges of Implementing Financial Inclusion Strategies Among Commercial Banks in Kenya

Abstract

Financial inclusion is a necessary condition for financial deepening, which helps to address the basic issue of growth with equity. An inclusive financial system facilitates efficient allocation of productive resources and reduces cost of capital. A wellfunctioning financial system serve a vital purpose, offering savings, credit, payment, and risk management products to people with a wide range of needs. This study sought to determine the challenges of implementing financial inclusion strategies among commercial banks in Kenya. The study was guided by two objectives: to establish the extent to which the financial inclusion strategy has been adopted by Kenyan commercial banks and to determine the challenges of implementing financial inclusion strategies among Commercial banks in Kenya. This study used cross-sectional survey design because the study included all commercial banks in the study. The target population of the study was the 44 commercial banks operating in Kenya as at December 2013. Primary data was collected using a questionnaire. Prior to processing the responses, the completed questionnaires were edited for completeness and consistency. The analyzed data was presented through percentages, means, standard deviations and frequencies. The study found that the banks in Kenya had adopted mobile banking, internet banking and agency banking. The study also found out that the banks in Kenya had increased the number of their ATM machines as well as increased their branches. The study concluded that banks face challenges in the resource availability, organizational structure and culture and advancements in the information technology. This study recommended that in the banks involve the employees in the formulation of the strategies as well as orientation on the strategies to be implemented. This study also recommended that the commercial banks in Kenya adopt new infrastructure so as to keep up with the emerging trends in ICT.