Promoting Gender Inclusion in Digital Financial Services: Evidence on Policies and Socioeconomic Factors in Kenya

ABSTRACT

Digital financial services (DFS) have significantly expanded financial access, empowered millions, and enhanced women’s financial inclusion worldwide. Kenya has been at the forefront of DFS adoption, yet gender disparities in DFS inclusion persist. This study employed a mixed-methods approach to examine socioeconomic drivers of the gender gap and the policy landscape surrounding DFS in Kenya. The quantitative study utilized the FinAccess 2021 dataset and applied ordinary probit regression and the Fairlie decomposition technique. The qualitative study employed key informant interviews (KIIs) with key stakeholders, and emerging thematic areas were analyzed. Regression results show that factors such as residence, age, marital status, education, income, phone ownership, identification documentation (ID), and financial literacy have a significant effect on DFS inclusion indicators. Fairlie decomposition results show that socioeconomic factors account for 87%, 57%, 87%, and 80% of the gender gap in DFS savings, credit, accounts, and other transactions (credit card, online banking, etc.), respectively. To bridge this gap, our findings highlight the need for a systematic approach that addresses women’s socioeconomic characteristics such as prioritizing rural internet access, financial literacy, and robust data protection and regulatory framework to build DFS users’ confidence and create a truly inclusive DFS ecosystem.