The cost of accessing financial services has for many years been a major concern for residents of Kendu Bay.

The small fishing town sandwiched between Kisumu, Homabay and Oyugis on the shores of Lake Victoria in Homa Bay County, has never had a physical financial institution.

They have to seek banking services from the neighbouring Oyugis and Homa Bay towns, and some as far as Kisumu, or from the handful of banking agents in the town.

None of the banks operate an Automatic Teller Machine (ATM) in the town.

Adoyo, a local businessman, says that for the 26 years he has been in business, he has always had to travel to Oyugis town for over-the-counter banking services, which he says is not only costly but also time-consuming.

“It is also not safe to go all the way to Oyugis to deposit my money. It is quite far,” he says.

Adoyo reckons the lack of a physical bank branch by any of the country’s over 40 commercial banks has hindered investments in the town.

Neema, another resident, says the lack of physical bank branches means locals mostly rely on mobile banking, which does not promote a saving culture.  

“If we had a bank, we would be able to save more securely and build on our creditworthiness, enabling us to take loans to grow our businesses and better our lives,” says Neema.

Like Adoyo, she also has to seek banking services elsewhere, in Homabay town, which is costly.

Frederick Ochieng, a fisherman in Kendu Bay, shares Adoyo’s and Neema’s frustrations. 

“I have to travel to Homabay to transact. A two-way trip costs me Sh400. Sometimes I end up not getting any service because of the long queues at my bank, and I have to make another trip to the town,” he says.

Such inconveniences have discouraged many people in Kendu Bay from using banks. 

“Many people here save money in the house, which is not secure,” says Odhiambo, noting that this denies locals the benefit of earning interest if they saved their money with banks. 

Damaris Atieno, a fish vendor, shares Odhiambo’s sentiments.

“Saving with a bank guarantees security and discourages casual withdrawals. Saving would enable us to better our lives,” she says.

Ironically, the Finaccess Survey by the Central Bank of Kenya (CBK) shows that neighbouring Homa Bay County had the second-highest access to financial services and products in the country at 81.8 per cent after  Nairobi, which had the highest access through formal providers at 95 per cent.

According to the survey, West Pokot County had the lowest access to formal channels. West Pokot, Turkana, and Samburu counties top the list of countries that heavily rely on informal channels.

Exclusion rates were the highest in Garissa County, at 34.3 per cent, followed by Narok County at 31.2 per cent and Tana River County at 26.7 per cent.

The report also showed that 84 per cent of Kenyan adults using financial services are formally included, 17 per cent are financially healthy, 44 per cent are bank users and 18 per cent have mobile money accounts.

In 2023, The adoption and utilisation of mobile phone financial services in Kenya experienced a growth rate of 1.67 percent. 

According to the 2023 bank supervision report by the CBK, mobile subscriptions slightly grew to 66.8 million from 65.7 million reported in the previous year, representing a penetration rate of 131.9 per cent.

Also, the total value of mobile money transactions in the year ended December 2023 reached a record high of Sh788.35 billion.

This surge was at the back of increased demand for cashless transactions, and the establishment of 8,555 new active mobile money agents. 

But Kendu Bay residents like Adoyo, Neema and Odhiambo could soon be saved the trouble of their long travels to seek financial services, with Kenya’s biggest bank by asset base, KCB, considering opening a branch in the town.

Seline Oungu, the team leader at KCB Oyugis branch, says almost half of their customers come from Kendu Bay, hence the need to take their services to them. 

“When we do activations, we find that most of them keep money in their houses, which is risky,” she says. 

Oungu says Kendu Bay has great potential for growth if the fishing community could access loans for modern cold rooms, which would ensure their fish is preserved for longer. 

“If you do not bank, you cannot access credit facilities, so a branch in Kendu Bay would open up the area for business,” she says, adding that there is also a need for increased financial literacy to help locals better manage their finances.