The FSD (Financial Sector Deepening) Annual lecture was delivered by Dr. David Ferrand, former Director of FSD Kenya, at the University of Nairobi Chandaria Auditorium.
The lecture was in its fifth year with a promise to facilitate debate on the long-term vision of the financial sector in Kenya.
Dr. Ferrand began with looking at the past, what has been some distinguishing factors of the enterprises that did exceptionally well in the last decade.
Solving real-life problems:
The successful startups and financial products that carried the day in the country mainly include products and services that solve real-world problems.
Products like Equitel, Mpesa, Mkopa, Fuliza, and other Digital products look to solve the real need of the customers.
A good example given by Dr. Ferrand was Equity Bank Kenya tea advances. Equity developed a product that catered for the tea farmer; that was fast in its administration, which saw it gain much success in the tea farming regions.
The other key thing for success was diversification and catering for different ages, different groups of people and different financial status quo. This was witnessed as a contributor to success by banks, microfinance, insurance, saccos, and even in embedded finance. This includes introducing products with shared value, PayAsYouGo, and other products that can be used by consumers to give multiple solutions.
The future is open
The future can lead to any path. There is no definite direction, no telling of the possibilities in the future. Dr. Ferrand pointed out that the future lies in open systems. This involves sharing of data, open-source IT and open banking.
The future will mainly depend on how far we are willing to push the boundaries.
Decision-makers and the planners in banking and the financial sector can push and pull towards whatever direction they see will bring the brightest future.
Creating value through inclusive finance
Creating value through inclusive finance can be achieved through new institutions that will be solely concerned with financial literacy and financial inclusion.
Educating the SME’s on how to handle their finances, how to apply for loans, how to ensure they qualify for the loans, how to manage the financing once given, and how to keep good records will be a good starting point to increase value through inclusive finance.
Consumer protection includes responsive finance, and sustainable finance while catering for an informed consumer. Consumers must know their rights, what they are entitled to avoid exploitation by large institutions that tend to hold them ransom.
Consumer protection will, therefore, be an important factor in the future way of doing business, and in the way, finance is administered. This will, therefore, have a major influence in the strides taken by the financial sector- will they be positive strides or negative strides.
FSD has been involved in financial sector monitoring and boosting for a long time and having an optimist outlook towards the future of the financial sector in Kenya says a lot. However, laid down plans can be perfect with poor executions- it is therefore paramount to have proper systems and institutions in place as we look towards the future.