ABSTRACT
This research paper explores the impact of digital financial services on
financial inclusion in Kenya. The study utilizes secondary data analysis to
examine the expansion of digital financial services in Kenya, their usage
patterns, and the resulting impact on financial inclusion. The paper reviews
relevant literature on financial inclusion, digital financial services, and
their interplay in the Kenyan context. The
methodology involves analyzing existing data from sources such as the Kenya
National Bureau of Statistics, Financial Sector Deepening (FSD) Kenya, Safaricom,
and other relevant institutions. The findings indicate significant
progress in financial inclusion, with increased banked individuals and a shift
towards digital channels. The adoption rates of digital financial services,
particularly mobile money platforms like M-Pesa, have grown substantially,
increasing access to banking services, formal savings, and credit facilities.
The research also highlights the empowerment and economic outcomes associated
with digital financial services, including improved financial resilience,
livelihoods, and reduced poverty and inequality. However, several challenges
and limitations exist, such as infrastructural constraints, limited financial
literacy, security concerns, and regulatory considerations. The paper concludes
by offering policy implications and recommendations, including strengthening
regulatory frameworks, enhancing financial literacy
programs, promoting collaboration among stakeholders, and addressing
infrastructure gaps for more comprehensive financial inclusion. This research
contributes to the existing knowledge of the impact of digital financial services in Kenya. It provides valuable
insights for policymakers, practitioners, and researchers in financial
inclusion and digital finance.