• Financial inclusion, income, and wealth inequality in Kenya

    Author(s): Peter Wamalwa
    wamalwasp@gmail.com
    2024-07-31 06:43:09

    40 Downloads 65 Views

    Abstract

    This paper analyses the impact of financial inclusion on income, wealth and inequality in Kenya. The unobservable factors are controlled for using propensity score matching method to establish the effect of financial services on income and wealth inequality in the five waves of the Financial Access Household Surveys conducted in 2006, 2009, 2012, 2015 and 2018. The results show that using financial services increased income and wealth and reduced in equality significantly in the initial surveys, however, wealth and income increased marginally, while inequality reduced gradually in later surveys. In addition, saving had a larger impact on increasing income and reducing inequality compared to credit, while using financial services increased educational spending. Therefore, improvement in financial inclusion eases financial constraints thereby, increasing investment and earnings, which reduces the wealth gap between the rich and the poor.

    Keywords
    Financial Inclusion; Income; Wealth; Inequality.

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