Improving Access to Banking: Evidence from Kenya

58 Pages Posted: 23 Dec 2018

See all articles by Elena Carletti

Elena Carletti

Bocconi University - Department of Finance; European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS)

Lemma W. Senbet

University of Maryland - Robert H. Smith School of Business

Robert Cull

World Bank - Development Research Group (DECRG)

Franklin Allen

Imperial College London

QJ Qian

Fudan University - Fanhai International School of Finance (FISF)

Patricio Valenzuela

University of Chile

Multiple version iconThere are 4 versions of this paper

Date Written: December 2018

Abstract

We explore the relationship between bank branch expansion, financial inclusion and profitability for Equity Bank. Unlike traditional banks in Kenya, Equity Bank pursues branching strategies that target underserved territories and less privileged households. Its presence has a positive and significant impact on households’ access to bank accounts and credit. It increased financial inclusion by 31 percent of the adult population between 2006 and 2015. Access is especially improved for Kenyans who are less educated, do not own their own home and live in less-developed areas. Equity Bank’s business model proves to be profitable both at bank and branch level.

Keywords: Equity Bank, bank penetration, bank account, microfinance

JEL Classification: G2; O1; R2.

Suggested Citation

Carletti, Elena and Senbet, Lemma W. and Cull, Robert and Allen, Franklin and Qian, Jun QJ and Valenzuela, Patricio, Improving Access to Banking: Evidence from Kenya (December 2018). BAFFI CAREFIN Centre Research Paper No. 2018-104. Available at SSRN: https://ssrn.com/abstract=3305047 or http://dx.doi.org/10.2139/ssrn.3305047

Elena Carletti (Contact Author)

Bocconi University - Department of Finance ( email )

Via Roentgen 1
Milano, MI 20136
Italy

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS) ( email )

Villa La Fonte, via delle Fontanelle 18
50016 San Domenico di Fiesole
Florence, Florence 50014
Italy

Lemma W. Senbet

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States
301-405-2242 (Phone)
301-405-0359 (Fax)

Robert Cull

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-473-6365 (Phone)
202-522-1155 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/rcull

Franklin Allen

Imperial College London ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

Jun QJ Qian

Fudan University - Fanhai International School of Finance (FISF)

China

Patricio Valenzuela

University of Chile ( email )

Republica 701 Santiago
Chile

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