Determinants of Financial Inclusion in Kenya: A Demand-Side Perspective

John K. Njenga *

University of Nairobi, P.O Box 13187 - 00200 Nairobi, Kenya.

Esther N. Irungu

University of Nairobi, P.O Box 8894 - 00300, Nairobi, Kenya.

*Author to whom correspondence should be addressed.


This study sought to analyze the underlying financial inclusion determinants in Kenya. The study applies ordinal logit regression to examine the effect of the residential area, gender, education level, marital status, and employment type on financial inclusion. Financial inclusion is measured by developing a financial inclusion index for ten binary financial services variables. From the index, three financial inclusion levels are designed. These include low financial inclusion with scores of zero to three, medium with scores of four to six, and high level with scores of seven to ten. The estimates of the ordinal model are statistically significant for all factors considered except gender. Area of residence, age, education type, income, and marital status positively affect the log odds of financial inclusion, while employment is negatively linked. Education, employment, and marital status have interaction effects on financial inclusion. This study recommends that the Kenyan government formulate and strengthen policies to tackle challenges such as gender disparity, rural bank infrastructure development, fostering an environment conducive for entrepreneurship to address unemployment and income disparities, advocating for secondary school completion, and addressing social issues impacting family stability, including separation or the absence of marriage.

Keywords: Financial inclusion, ordinal regression, determinants, Kenya

How to Cite

Njenga, J. K., & Irungu, E. N. (2024). Determinants of Financial Inclusion in Kenya: A Demand-Side Perspective. Asian Journal of Probability and Statistics, 26(5), 19–29.


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