UNSGSA Visit to Focus on Potential of Digital Financial Services to Increase Access, Improve Financial Well-Being and Resilience for Kenyans

UNSGSA Queen Máxima and Central Bank of Kenya (CBK) Governor Kamau Thugge in Nairobi.
UNSGSA Queen Máxima and Central Bank of Kenya (CBK) Governor Kamau Thugge greet one another in Nairobi on 25 October 2023.

H.M. Queen Máxima of the Netherlands, in her capacity as the United Nations Secretary-General's Special Advocate for Inclusive Finance for Development (UNSGSA), is scheduled to visit Kenya on 23-25 October 2023. The trip represents an opportunity to meet with key public and private sector leaders to help identify how the UNSGSA can continue to support and collaborate on various financial inclusion issues that impact Kenyan communities.

During the visit, the Special Advocate will focus on several key objectives, including improving access to quality digital banking services, enhancing resilience in the face of climate-related challenges, and promoting overall financial health or well-being. These initiatives hold the potential to better equip individuals and businesses in Kenya with the necessary financial tools to build better lives and create positive development outcomes—especially for traditionally underserved groups such as the poor, women, smallholder farmers, and micro-, small, and medium-sized enterprises (MSMEs).

These efforts aim to build upon financial inclusion progress over the last decade in Kenya, where 79% of adults have established accounts, up from 42% in 2011, according to the 2021 World Bank Global Findex Report. Mobile money has played a pivotal role in bridging the financial inclusion gap, enabling widespread access to financial services. However, challenges remain, with nearly seven million adults in Kenya still unbanked, particularly among women and the poor.

Additionally, findings from the 2021 FinAccess Household Survey reveal a concerning trend in the financial well-being of Kenyan citizens. The data shows that only 17% of adults possess the capability, as measured against a set of minimum criteria, to adequately address their daily needs, manage unexpected challenges, and plan for future goals. This marks a decline from the nearly 22% reported in 2019. This heightened vulnerability is primarily due to difficulties affording food and healthcare. Further, only 5% of Kenyans experiencing a flooding or drought report using financial services to address the shock. In contrast, 42% of Kenyans relied on informal sources or sold assets to manage climate shocks.

Queen Máxima will conduct three "field visits" to speak with local business owners, female entrepreneurs, and smallholder farmers to hear insights into how they are leveraging digital financial services and products, as well as what enhancements and innovations could better serve their financial needs and financial well-being.

Two of these field visits will take place on 23 October in Kisumu, near Lake Victoria, where the UNSGSA will speak with farmers using innovative digital insurance to help mitigate the impacts of climate events, such as major drought or heavy rainfall. In the event of damage to crops, the insurer can use satellite information to make a reliable estimate of the loss of income and pay out the damage amount immediately. The Special Advocate will also learn about a digital platform for hiring agricultural vehicles, mainly for small farms. The farmer measures the circumference of the field to be cultivated via an app, and the platform ensures a match with the owner of an agricultural vehicle.

During a field visit in Nairobi the following day, Queen Máxima will speak with a female doctor/clinic owner and patients about the benefits of digital loans through a medical credit fund. Female clinic owners often cannot get a loan from a bank. With the credit fund, they can invest in their hospital and provide better care without the regular collateral, repaying the loan digitally.

Also, while in Nairobi, it is foreseen that Queen Máxima will hold bilateral meetings with President Samoei Ruto; National Treasury and Economic Planning Cabinet Secretary Njuguna Ndung’u; Central Bank of Kenya (CBK) Governor Kamau Thugge; Interior and National Administration Cabinet Secretary Kithure Kindiki; Ministry of Information, Communication and the Digital Economy Cabinet Secretary Eliud Owalo; and Environment, Climate Change and Forestry Cabinet Secretary Soipan Tuya.

Furthermore, she will participate in a focus group on digital finance with a select group of small entrepreneurs, receive a briefing from a small group of inclusive finance impact investors, and attend roundtable meetings on inclusive green finance (IGF), open finance, and financial health, as well as a roundtable meeting with development partners in the country. The UNSGSA will also attend a United Nations Development Programme (UNDP) launch event for a new discussion paper on digital financial inclusion titled, “Addressing Inequality: Universal Access to Digital Financial Services for Equitable Growth”.

Queen Máxima will underscore Kenya's global leadership in the inclusive finance landscape. The UNSGSA will offer crucial support to key players in the country, particularly to help accelerate progress in three critical aspects of financial inclusion, including:

  • Regarding how inclusive finance can support climate adaptation and mitigation while enhancing resilience to climate hazards.
  • Promoting the development of digital public infrastructure (DPI), with particular attention to digital IDs, interoperable payment platforms, and data sharing.
  • Encouraging responsible practices that enhance financial well-being among Kenyan households and drive innovation in digital finance, with a special emphasis on underserved communities.

This will be Queen Máxima’s second visit to Kenya as the Special Advocate. The previous visit was held in April 2010 during a three-country trip which also included Rwanda and Tanzania. Partners from the UNSGSA’s Reference Group supporting technical work on the upcoming visit are the Bill & Melinda Gates Foundation (BMGF), the Consultative Group to Assist the Poor (CGAP), and the World Bank Group.