The Financial Inclusion Conference & Investor Expo 2024, held on the 25th and 26th of September at the Kenya School of Monetary Studies, was a pivotal event aimed at fostering dialogue and collaboration among stakeholders in the microfinance sector. The event brought together leaders, government officials, financial experts, and investors to discuss key topics shaping Kenya’s financial landscape.
The first day of the conference began with an opening session that began with an introduction session of the guests -Mr. Ronald Inyangala, Deputy Director, financial and sectoral affairs at the National Treasury; representing CPA John Mbadi, Cabinet Secretary, the National Treasury and Economic planning, Ambassador of the Norwegian Embassy in Nairobi Gunnar Andreas Hom, and Mr. Michael Rono, investment manager at the Kenya Development Corporation (KDC); representing Norah Ratemo, Director General, KDC – the session was cordinated by Mr. David Mukaru, the vice chairman of AMFI-K kick-started the Financial Inclusion Conference and Investor Expo 2024. He later welcomed Mr. Oscar Murigi, chairman, AMFI-K, to give his opening remarks.
The opening session featured a series of insightful panel discussions that addressed various aspects of financial inclusion, the day began with a robust Government Panel discussion, which explored the role of government policies and programs in promoting financial inclusion in Kenya. This session underscored the need for collaboration between public and private sectors to create an enabling environment for inclusive financial systems. The panel shared insights into the strategies being implemented to ensure that financial services are accessible to all citizens.
In a recent address, Mr. Murigi highlighted the significant challenges facing the microfinance sector, including the prevalence of informality and a restrictive legal framework. These obstacles have hindered the sector’s overall growth and potential. To overcome the funding challenge, Mr. Murigi proposed a strategic partnership between the microfinance sector, represented by AMFI-K, and the government. This collaboration would involve the sector playing a pivotal role in the disbursement of the Hustler Fund.
The event also featured a presentation by Ambassador Gunnar Andreas Holm of the Royal Norwegian Embassy in Nairobi. The Ambassador emphasized the importance of international collaboration in achieving financial inclusion goals. This perspective aligns with the sector’s aspirations and highlights the potential for global partnerships to drive positive change. By addressing these challenges and fostering strategic partnerships, the microfinance sector aims to unlock its full potential and contribute to the economic growth and development of the nation.
Ambassador Gunnar emphasized Norway’s dedication to supporting initiatives that promote sustainable development in Kenya. The Embassy is committed to collaborating with local stakeholders to enhance the country’s capacity for sustainable development. This includes facilitating knowledge transfer, providing technical assistance, and investing in green technologies that align with Kenya’s environmental goals. The Ambassador also highlighted the global trend of digitalization, noting that an increasing number of countries are adopting digital solutions to improve financial inclusion. Technology, he emphasized, can significantly enhance access to financial services, particularly for underserved populations in rural areas.
Mr. Inyangala emphasized the crucial role of financial inclusion in fostering economic liberty in Kenya. He highlighted that the conference was not just a platform for policy discussions but also a space for promoting inclusivity and creating economic opportunities. He noted the government’s commitment to ensuring that everyone has access to financial services, emphasizing that financial inclusion is essential for promoting economic freedom.
During this session, it became clear that financial access alone is not sufficient; innovation is crucial to foster entrepreneurial opportunities. The quality of access is paramount. Mr. Inyangala emphasized that the government, in collaboration with civil society and the private sector, should focus on creating real, sustainable solutions that meet the needs of underserved communities, rather than merely pursuing numerical targets for financial inclusion. He also emphasized the importance of microfinance institutions actively contributing to public good as a way of giving back to society. This includes environmental sustainability initiatives, such as greening efforts, to mitigate the adverse effects of climate change.
Financial literacy is a cornerstone of financial inclusion. The more people understand financial concepts, the better equipped they are to participate in formal financial systems. As financial literacy improves, more individuals and businesses will gain access to financial services, leading to a more inclusive economy. Financial institutions, particularly MFIs and MFBs, must invest in financial education initiatives to help customers make informed decisions. By improving financial literacy, Kenya can ensure that more individuals are able to access and benefit from formal financial services.
This conference aimed to improve financial inclusion in Kenya by bringing together various stakeholders in the microfinance sector and some crucial points were discussed. Public-private partnerships are essential to creating a conducive environment for microfinance institutions (MFIs) to serve underserved communities in Kenya. By collaborating, the public and private sectors can pool resources, share knowledge, and implement innovative financial solutions. A key strategy is to leverage government initiatives like the Hustler Fund to expand the reach of MFIs. MFIs, with their established infrastructure and expertise, can efficiently distribute these funds to the target market.
Moreover, active participation in the formulation and implementation of the National Financial Inclusion Strategy will ensure that the needs of the microfinance sector are adequately addressed. Government-backed credit guarantee schemes can further incentivize lending to cooperatives and MSMEs, reducing risk and promoting the growth of MFIs. These initiatives, when implemented effectively, can significantly enhance financial inclusion and contribute to economic development in Kenya.
The microfinance sector is well-positioned to address pressing environmental and social challenges. To mitigate climate change, MFIs should develop green finance products that support sustainable practices, such as renewable energy and eco-friendly agriculture. Additionally, financial literacy training can empower customers to make informed financial decisions and adopt sustainable behaviors. By equipping individuals with the knowledge and skills to manage their finances effectively, MFIs can contribute to long-term financial well-being and environmental sustainability. Finally, investing in research and development is crucial for creating innovative financial solutions that are tailored to the evolving needs of customers. These solutions should be designed to be fair, inclusive, and have a positive impact on the environment and society.
The regulatory environment plays a crucial role in shaping the growth and development of the microfinance sector. To foster innovation and financial inclusion, it is essential to review and streamline regulations that may hinder the operations of microfinance banks (MFBs). A structured dialogue between the government, the Central Bank, and industry associations like AMFI-K can help identify regulatory challenges and develop solutions to improve the operating environment for MFBs. This collaboration can lead to the creation of a regulatory framework that is both supportive and effective. Additionally, financial literacy training is essential for both MFI staff and clients. By equipping staff with the necessary knowledge and skills, MFIs can enhance their service delivery and better meet the needs of their customers. Similarly, teaching financial literacy to children can foster responsible financial habits from a young age, promoting long-term financial well-being.
The Financial Inclusion Conference and Expo 2024 underscored the vital role of microfinance institutions (MFIs) and microfinance banks (MFBs) in driving Kenya’s socio-economic development. Through collaboration, policy reforms, innovation, and a focus on sustainability, the sector can continue to empower individuals and communities. To excel, microfinance institutions must prioritize customer experience. By anticipating and exceeding customer expectations, MFIs can build long-lasting relationships and foster loyalty.
Given the critical role of MFIs in financial inclusion, the government should provide sustained support through effective policies and dedicated funding. Regular and structured dialogue between the government and the sector is essential to address challenges and promote growth. The microfinance industry is undergoing rapid transformation due to technological advancements and shifting customer preferences. MFIs must embrace agility, simplicity, and a customer-centric approach to remain competitive.
Regular industry forums, like the Financial Inclusion Conference and Expo, are crucial for knowledge sharing, networking, and fostering collaboration among stakeholders. Expanding these forums to the county level can further enhance outreach and impact. By embracing these key principles, the microfinance sector can continue to play a pivotal role in driving financial inclusion, reducing poverty, and promoting sustainable development in Kenya.
