| dc.description.abstract | Building inclusive financial systems is a key strategy to drive economic growth
especially in developing countries. Kenya has commendably increased the number of
adults accessing financial services through the use of financial innovations. The use of
Social Cash Transfers Programmes (SCTP) is an emerging intervention tool that
addresses various needs of the poor. Studies in other counties have revealed that
SCTPs must make a deliberate effort to design their interventions in a manner that
promote financial inclusion of beneficiaries so as to successfully achieve this
objective. Hence the purpose of this study was to establish the effects of social cash
transfers (SCT) on financial inclusion in Kenya. The study was inspired by the need
to promote the financial inclusion of the abject poor. The research design adopted a
descriptive survey study in which data was gathered from 57 programme
beneficiaries. The sampling frame included all 340,700 beneficiaries of all the 6
programmes under the Kenya National Social Protection Sector. Structured
questionnaires guided by the Global Findex Survey indicators were used in the study.
The data collected was analyzed by use of Microsoft Excel 2010 and Statistical
Package for Social Sciences (SPSS) Version 21. Linear and Multiple regression
analyses were used to determine the effect of SCTs on financial inclusion. The study
found that SCTPs were characterised by low levels of formally banked beneficiaries
and cashless transactions, few account transactions, low saving propensity. Few
beneficiaries took credit from regulated financial institutions. However, significant
increase in financial inclusion was registered amongst beneficiaries who were already
included before joining the SCTPs as compared to those who were initially excluded.
The study concluded that SCTP intervention per se was not a useful predictor of
financial inclusion of the population. The addition of history of prior inclusion to the
regression equation caused a large change in R2 indicating that the variable provides
unique information about the dependent variable that was not available from the
SCTP operation as an independent variable. It was thus concluded that SCTP
operations coupled with a history of formal inclusion had a positive effect on financial
inclusion. The study also found that most SCTPs (except CFA and HSNP) used
limited-purpose instruments for transfers in lieu of mainstream financial accounts,
which in turn discouraged financial inclusion of beneficiaries, and in some cases led
to loss of benefits. Further, the potential of mobile money as an avenue of financial
inclusion was ignored by all SCTPs despite the fact that beneficiaries felt they were
the most convenient transfer modes for the elderly and disabled. Based on the above
findings, the study recommended that SCTPs should model transfers on formal
banking, including mobile money banking, and integrate financial literacy as well as
financial management skill courses so as to promote awareness amongst beneficiaries.
This would facilitate better use of cash transfers benefits. Beneficiaries with formal
banking history could be used as role models and peer educators. | en_US |
