Inclusive Finance in Kenya

On behalf of my Thai client, I attended a meeting of the UN Advisors Group on Inclusive Financial Sectors in Nairobi, hosted by Equity Bank, a local microfinance institution that has not only grown to capture a third of the local market for bank accounts, but also become a symbol of national pride, as chronicled in the July issue of Vanity Fair magazine.

The day after the advisors meeting, we left hotels early in four-wheel drive vehicles and headed north on the highway that climbs along the ridge overlooking the Rift Valley. On the way the road passed through slum areas, new suburban housing developments and ultimately agricultural land and green open country. By the time we left the highway to turn eastward, we were more than 9000 feet above sea level.

We caught up with the mobile banking unit in the village of Njabini, which is kind of a crossroads town serving the surrounding farms. By the time we arrived, there was a long line of customers queued up for banking services at the teller window cut in the rear of the vehicle. This mobile unit makes three stops per day on a scheduled two-week circuit of towns like this. The specially outfitted Toyota Land Cruiser is semi-armored and is solar-powered by a large panel on the roof, since villages like this have no electricity at all. However, the entire country is well served by a cellular voice and data network, so after attaching to a tall antenna on the roof of the building where the bank rents its parking space, this mobile branch is completely connected via GPRS to Equity Bank’s core banking information system. Inside the vehicle, a single bank employee services customers with a fully equipped station including computer, printer and cashbox.

Later, on my own, I visited the largest open market in East Africa, in the town of Karatina and interviewed used clothing dealers about how they finance their businesses. Although the equator passes right through this region of Kenya, the high elevation means winters are cold and used fleeces are particularly in demand. The clothing we donate in rich countries is cleaned (sometimes), packed and shipped to developing nations, where it is taxed, bought by wholesalers, and then picked up by these dealers in 100lb bundles. For more about this process, see the film Ropa Americana).