Informal Financial Sector in Kenya: The Case of Siaya District

Ouma, Alfred P. S. (1991) Informal Financial Sector in Kenya: The Case of Siaya District. Masters thesis, Kenyatta University.

[img] PDF (Informal Financial Sector in Kenya: The Case of Siaya District)
Informal Financial Sector in Kenya....pdf - Accepted Version
Restricted to Repository staff only

Download (58MB) | Request a copy


This paper studies factors that affect an individual's probabilities of choosing amongst different financial institutions to save with and/or borrow from. A structured questionnaire was used to collect data on attributes of financial institutions (formal and informal) and on characteristics of individuals who had used these institutions over a period of one month prior to the interview. The data were analyzed using logit techniques. The empirical findings of the study reveal coexistence of informal and formal financial institutions in the study site. However, the informal institutions are more popular, having been used by 73 per cent of total respondents. The findings also show that distance, level of education, level of monthly income and collateral are significant determinants of selection probabilities for formal and informal financial institutions. On the basis of the empirical results, the study recommends that: (i) More formal financial institutions be built in rural areas. (ii) Education programmes on finance and banking be intensified in the rural areas. (iii) Local moneylenders should be recruited as extension agents of formal financial institutions in rural areas. (iv)State loans, like those provided by the ICDC loan Agency in Siaya District, be channeled via informal financial institutions, especially Mutual Assistance Groups, under an overseer body.

Item Type: Thesis (Masters)
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HJ Public Finance
Divisions: Africana
Depositing User: Tim Khabala
Date Deposited: 27 Sep 2017 11:22
Last Modified: 27 Sep 2017 11:22

Actions (login required)

View Item View Item