Rural Financial Services in Kenya: What is Working and Why?
Author(s): Kibaara,Betty
Introduction
This study examines the evolving structure of the rural financial services and the
extent to which the current financial institutions have improved access to producers and
traders in the rural areas. The study identifies successful cases of functioning financial
services in the rural areas. It also identifies constraints that hinder increased access to
rural financial services and proposes policy interventions that could make the services
more accessible to the rural people. The study was carried out in 15 Districts within six
agro-ecological zones. Data was obtained from key rural finance stakeholders using a
structured checklist. The study is supplemented with information from the Tegemeo
Agricultural Monitoring and Policy Analysis (TAMPA) 2004 survey consisting of
responses from 1540 rural households.
Findings from the study indicate that a number of key rural financial models have
evolved to address the demand for rural financial services in Kenya. These include:
Community Owned Rural Financing Models, Private Commercial Bank Led Model,
Government Led-Rural Finance Model, Donor Guarantees-Input Supply Model,
Managed SACCO-Beach Banking Model and the Informal Group Based Rural Financing
Model. The Government on its part has restructured the operations of Agricultural
Finance Corporation (AFC) in line with the Strategy for Revitalization of Agriculture
(SRA). The emerging leading indigenous banks have also set up fixed and mobile
branches in the rural areas.
Language: English
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 Rural Financial Services in Kenya: What is Working and Why? - Pdf
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