List Of 10 Reasons For Poor Digital Financial Literacy In Kenya, Other African Countries

• The GSMA's 2024 report reveals that low digital and financial literacy (DFL) continues to hinder the adoption of mobile money services across Kenya and Africa
• Key barriers to DFL adoption in low-and middle-income countries include unclear government regulations, limited network coverage and low smartphone ownership
• Nairobi fintech consultant Samuel Kagwe told TUKO.co.ke that increased education on fintech and digital money systems within the school system can enhance DFL

Elijah Ntongai, a journalist at TUKO.co.ke, has more than three years of financial, business, and technology research expertise, providing insights into Kenyan and global trends.

The Global System for Mobile Communications Association (GSMA) released the 2024 report on the state of the mobile money industry worldwide and in Africa.

The report noted that despite the growth of digital financial services, many users are unable to access them without help or may be unaware of how they might benefit their lives due to low levels of digital and financial literacy (DFL).

GSMA noted several barriers to the adoption of DFL in Kenya and other African countries that are classified as low—and medium-income nations.

Speaking to TUKO.co.ke Nairobi-based fintech consultant Samuel Kagwe noted that the bundling of access to communication and access to mobile money in SIM Cards has worked well in Kenya.

"This strategy, however, has perhaps gotten to the point of diminishing returns. New SIM card registrations do not translate to an increase in mobile money users anymore. To stretch the mobile money adoption further, especially in the East African market, unbundling of services has to happen as well as increased education on fintech and digital money systems within the school system to increase financial literacy among Kenyans and other Africans," Kagwe said.

Reasons for poor financial literacy

According to GSMA, here are the barriers to the uptake of digital financial literacy in Kenya and Africa:

• Unclear government regulations on DFL content accessible to citizens.
• Limited network coverage, particularly in rural areas.
• Low smartphone device ownership, which limits access to DFL content.
• Short donor funding cycles, which do not cater for the establishment of a delivery platform and form local distribution partnerships.
• Low literacy levels, particularly in rural areas and among women in some low and middle-income countries.
• Users are often unwilling to pay for DFL, as incurring charges to access content can deter many users from participating in DFL programmes.
• Generalised content that is not specific to users' everyday lives which fails to address the relevant DFL needs.
• The high cost of a DFL delivery platform. For example, Safaricom in Kenya began developing a DFL programme and approached several local providers that charged more than Safaricom was willing to spend. This delayed Safaricom's DFL plans for two years until Microsoft offered an e-learning platform at no cost.
• Lack of consumer trust because many users may distrust messages received on their mobile phones, given the risk of fraud.
• Inability to see the business case for providing DFL content.

M-Pesa gets GSMA certification

In other news on mobile money services, Safaricom's M-Pesa was re-certified by the GSMA for secure and reliable mobile money services.

M-Pesa had 31.5 million active users in Kenya, processing over KSh 40.2 trillion in transactions annually as of March 2024.

Safaricom CEO Peter Ndegwa emphasised M-Pesa’s critical role in advancing financial inclusion across Kenya and the African region.

The GSMA Mobile Money Certification ensures that certified providers adhere to strict standards for customer fund protection, data security, and transparency.

Proofreading by Mercy Nyambura Guthua, journalist and copy editor at TUKO.co.ke

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M-Pesa and mobile money services in Kenya and Africa.

GSMA | The digital financial literacy toolkit: Addressing the gap in

A Financial & Digital Literacy Toolkit - UN Capital Development Fund