Improving Access to Banking : Evidence from Kenya

Using household surveys and bank penetration data at the district-level in 2006 and 2009, this paper examines the impact of Equity Bank -- a leading private commercial bank focusing on microfinance -- on access to banking in Kenya. Unlike other commercial banks in Kenya, Equity Bank pursues distinct branching strategies that target underserved areas and less-privileged households. Equity Bank presence has a positive and significant impact on households' use of bank accounts and bank credit, especially for Kenyans with low income, no salaried job, and less education and those who do not own their own home. The findings are robust to using the district-level proportion of people speaking a minority language as an instrument for Equity Bank presence. It appears that Equity Bank's business model -- providing financial services to population segments typically ignored by traditional commercial banks and generating sustainable profits in the process -- can be a solution to the financial access problem that has hindered the development of inclusive financial sectors in many African countries.

Bibliographic Details

Main Authors:	Allen, Franklin, Carletti, Elena, Cull, Robert, Qian, Jun, Senbet, Lemma, Valenzuela, Patricio
Format:	Policy Research Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2013-09
Subjects:	ACCESS TO BANK, ACCESS TO BANK ACCOUNTS, ACCESS TO BANKING, ACCESS TO BANKING SERVICES, ACCESS TO CREDIT, ACCESS TO FINANCE, ACCESS TO FINANCIAL SERVICES, ACCOUNT OWNERS, ACCOUNT USAGE, ADVANCED ECONOMIES, ASSET OWNERSHIP, ASYMMETRIC INFORMATION, BANK ACCOUNT, BANK ACCOUNTS, BANK BRANCH, BANK BRANCHES, BANK COMPETITION, BANK CREDIT, BANK FAILURE, BANK LOAN, BANK LOANS, BANK SERVICES, BANKING CORPORATION, BANKING NETWORK, BANKING SECTOR, BANKING SECTOR DEVELOPMENT, BANKING SECTOR OUTREACH, BANKING SECTOR STABILITY, BANKING SERVICE, BANKING SERVICES, BANKING SYSTEM, BIASES, BRANCH LICENSING, BRANCH NETWORKS, CHECKS, CO-OPERATIVE, CO-OPERATIVE BANK, COMMERCIAL BANK, COMMERCIAL BANKS, COMMUNITY BANK, CONFIDENCE, CONSUMER GOODS, CORPORATION, COUNTRY COMPARISONS, CREDIT ACCESS, CREDIT BANK, CREDIT GROUPS, CREDIT SCORING, DEPOSIT, DEPOSIT INSURANCE, DEPOSITS, DEVELOPING COUNTRIES, DEVELOPMENT BANK, DOMESTIC BANK, DOMESTIC BANKS, DUMMY VARIABLE, DUMMY VARIABLES, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC SUCCESSES, EDUCATION LEVEL, ENTREPRENEURIAL ACTIVITIES, EUROPEAN CENTRAL BANK, FAMILIES, FINANCIAL ACCESS, FINANCIAL DEVELOPMENT, FINANCIAL INFRASTRUCTURE, FINANCIAL INSTITUTIONS, FINANCIAL OUTREACH, FINANCIAL PERFORMANCE, FINANCIAL SECTOR REFORMS, FINANCIAL SERVICES, FINANCIAL STATEMENTS, FINANCIAL STUDIES, FINANCIAL SUPPORT, FOREIGN BANK, FOREIGN BANKS, FORMAL FINANCE, GENDER, GOVERNMENT BANKS, GOVERNMENT OWNERSHIP, GREATER ACCESS, GROWTH OPPORTUNITIES, HOMEOWNER, HOUSEHOLD ACCESS, HOUSEHOLDS, HUMAN CAPITAL, ID, INCOME INEQUALITY, INCOME LEVELS, INDEBTEDNESS, INDIVIDUALS, INEQUALITY, INFORMAL SAVINGS, INSTRUMENT, INTERNATIONAL BANK, INVESTIGATION, LENDERS, LIMITED, LOAN, LOAN PORTFOLIO, LTD., MFIS, MICROCREDIT, MICROFINANCE, MICROFINANCE INSTITUTIONS, MINIMUM BALANCE, MOBILE PHONE, MONEY TRANSFER, MORTGAGES, OWNERSHIP STRUCTURE, OWNERSHIP STRUCTURES, PHYSICAL ASSETS, POOR BORROWERS, POSITIVE COEFFICIENT, POSITIVE COEFFICIENTS, PREDOMINANT LANGUAGE, PRIVATE BANK, PRIVATE BANKS, PRIVATE CREDIT, PROVISION OF CREDIT, REMITTANCE, REMITTANCES, REPAYMENT, RURAL BANKS, SAVINGS, SAVINGS MECHANISMS, SAVINGS SERVICES, SHAREHOLDERS, SMALL BUSINESSES, SOCIAL BANKING, START-UP, STOCK EXCHANGE, TRANSITION ECONOMIES, TRIALS, UNIVERSAL BANK, URBAN AREAS, URBANIZATION, Equity Bank, bank penetration,
Online Access:	http://documents.worldbank.org/curated/en/2013/09/18207020/improving-access-banking-evidence-kenya http://hdl.handle.net/10986/16044
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