Financial Consumer Protection in Kenya: Key Research Findings & Policy Recommendations
This study identifies key issues and recommends improvements in financial consumer protection and education in Kenya.
The Kenyan constitution has specific provisions on consumer rights that have grown out of various concerns, such as financial services expansion to large numbers of first time retail consumers and the introduction of complex financial products.
The study focuses on the ‘mass market consumer’ who consumes financial services provided by banks, mobile financial service providers, savings and credit cooperatives (SACCOs), and MFIs. It presents findings on consumer information and knowledge, savings, loans, insurance, long term savings, mobile payment services and pyramid schemes. Conclusions include:
- Kenya needs to develop a strategy for strengthening consumer protection;
- Kenya should finalize the Consumer Protection Bill and implement the Competition Bill;
- Incremental approach will help build effective financial consumer protection;
- Revisions in financial sector regulations that align them to the new constitution’s provisions provide a good opportunity to enhance consumer protection;
- Incremental efforts should cultivate the political will and practical experience needed to develop a comprehensive financial consumer protection legal framework and a dedicated enforcement authority;
- Ministry of Finance is best positioned to engage financial sector regulators, monitor progress and guide policy dialogue.