• Poverty Reduction Through Enhanced Rural Access to Financial Services in Kenya

The study infers the impact of enhanced financial service in poverty reduction in rural Kenya using secondary data. On the basis of outreach levels, and financial sustainability indicators, and available literature of other countries that have conducted surveys, the findings of the study indicate that rural financing programmes have a positive impact on poverty reduction among the poor. The study also reveals that the saving mobilization of the rural poor, utilisation potential and their unique banking needs have not been exploited and catered for adequately. In addition, in spite of the fact that formal banking institutions have come in to try and bridge the gap between the service provision and service requirements in this market by extending branches in the rural areas, their impact has been limited by the poor rural infrastructure and lack of clear rural financing policy and the pending MFI Bill and SACCO Bill. Therefore, this study recommends for the formulation of an accommodative legal and regulatory framework that will encourage growth of micro finance institutions especially in the rural areas; provision by financial institutions of a wide range of demand-driven products and services needed by the poor, a deliberate improvement of rural financial infrastructure by the government and linkage of village banks with the formal financial institutions.