Lack of IDs excluding 18-25-year-olds from accessing financial services

Uncollected National Identity Cards./COURTESY

Young people between 18 and 25 years old and older people above 55 years are the most excluded in accessing any form of financial services or products.

This is according to the 2021 FinAccess Household survey carried out by the Central Bank of Kenya in collaboration with the Kenya National Bureau of Statistics and Financial Sector Deepening Trust (FSD Kenya).

“In particular, the youth (18-25 yrs old) had the highest exclusion rate at 22.5 percent in 2021, rising from 18.2 percent exclusion rate in 2019,” read the survey report.

Lack of National Identity (ID) Cards has been mentioned as one of the factors attributing to the exclusion rate among the youth.

The overall number of adults without ID cards increased by 3.3 percent in 2021 compared to 2019, when the last survey was done.

The increase was driven by an 8.7 percent increase of population aged 18-25 years, which increased from 20.5 percent in 2019 to 28.1 percent in 2021.

“COVID-19 restrictions and Alternative Working Arrangements (AWA), especially in government offices, could explain the low acquisition of ID cards by this group who were turning 18 years during this COVID-19 period,” the report reads in part.

A file photo of residents waiting to be served at the Huduma Centre in Mombasa./COURTESY

Level of education was also a factor in accessing these services with those with higher education getting better access compared to those with no education. At 98.5 percent for those with a higher level of education and 64.2 percent access for those without education.

Also, urban population recorded the highest access to financial services and products compared to the rural population.

The 2021 FinAccess Household survey

The survey was carried out between July and September 2021.

It was the first of the FinAccess survey series to provide national and county-level data.

“The 2021 survey is unique in a number of ways. Firstly, it was undertaken in the midst of the evolving Corona Virus Disease (COVID-19) pandemic coupled with localized shock such as locust invasion and drought,” read the introduction part of the report.

According to the survey, overall financial access increased to 83.7 percent in 2021 compared to 82.1 percent in 2019, mainly driven by the use of technology.

“The usage and quality of financial services and products continue to deepen, on account of increased adoption of technology and innovations, use of portfolio of products and services; government policies; and private sector strategies. Indeed technology is acting as an equalizer among the genders, closing the rural-urban gap and across counties,” read the report.

The survey also covers the topical issues of green finance and the role of technology in shaping financial transactions.

“The inclusion of questions of climate-related developments in particular, is timely as the survey seeks to align finance to sustainable development,” read the report.

On green finance, only 6.0 percent of respondents reported having the capacity to invest in green solutions needed to mitigate the frequent cases of drought, floods, and pests (locusts) which were cited as main challenges by farmers.