Financial access and exclusion in Kenya and Uganda

Policy emphasis has recently shifted to ‘Finance for All’ given evidence that financial sectordevelopment (FSD) contributes to growth but that the primary effects on poverty do not arisefrom pro-poor provision. This paper uses data from Financial Access Surveys carried out in 2006in Kenya and Uganda to investigate the socio-economic, demographic and geographical factorscausing access to and exclusion from formal, semi-formal and informal financial services. Itapproaches this from the perspective of institutional analysis. It finds, first, that socialinstitutions do present underlying barriers to access - more so than geography - and thatinformal provision is extensive. These findings suggest that institutional theories of FSD need toaddress the role of underlying social institutions and better understand the role of informalfinance, and that policy for effective outreach must similarly consider these dimensions.