| dc.contributor.author | Mutiiria, Onesmus Mbaabu | |
| dc.contributor.author | Nzomoi, Joseph | |
| dc.contributor.author | Kamoni, Peter | |
| dc.date.accessioned | 2025-11-28T09:24:33Z | |
| dc.date.available | 2025-11-28T09:24:33Z | |
| dc.date.issued | 2024-05 | |
| dc.identifier.citation | Mutiiria, O., Nzomoi, J., & Kamoni, P. (2024). Financial Development and Its Effect on Inclusive Growth in Kenya 2000 – 2022. International Journal of Economics, 9(3), 1– 20. https://doi.org/10.47604/ijecon.2570 | en_US |
| dc.identifier.issn | 2518-8437 | |
| dc.identifier.uri | https://doi.org/10.47604/ijecon.2570 | |
| dc.identifier.uri | http://repository.mut.ac.ke:8080/xmlui/handle/123456789/6812 | |
| dc.description.abstract | Purpose: In the past decade, Kenya’s economy registered
an average real GDP growth rate of 4.63 percent. Despite
this growth, many people have been locked out of social
and economic opportunities, with 19.1 percent of the
Kenyan population living in poverty. This has intensified
the need for inclusive growth, a growth model that
promotes shared prosperity. Several studies have shown
that financial systems that function well play a great role
in the economy through the provision of key financial
services that drive growth. However, there is a lack of
substantial inquiry into financial development and
inclusive growth in Kenya. This study sought to examine
this relationship for the period 2000-2022.
Methodology: The study employed a causal research
design and used time series data that was collected from
various databases. The level of inclusiveness in Kenya
was analyzed using an inclusiveness matrix. An inclusive
growth index was constructed, which was then used to
empirically test the effect of financial development on
inclusive growth. The data was presented in tables and
figures.
Findings: The inclusiveness matrix shows that despite
positive economic growth rates, there is a low rate of
equity growth, which shows that Kenya has a low level of
inclusivity. The empirical results show that bank deposits
and private-sector credit have a positive and statistically
significant effect on inclusive growth. A 1% increase in
bank deposits leads to a 0.074% increase in inclusive
growth. When private-sector credit increases by 1%,
inclusive growth expands by 0.070%. Bank return on
assets has a positive but insignificant effect on inclusive
growth. The study confirms that financial depth and
access to financial services are the most conducive to
inclusive growth in Kenya. Other determinants of
inclusive growth include initial income, human capital
development and macroeconomic stability. The overall
findings suggest that financial development can be used to
create economic opportunities for poor people in Kenya,
thus reducing income disparities.
Unique Contribution to Theory, Practice and Policy:
The study has contributed to the ongoing conversation on
inclusive growth, specifically on its measurement. The
empirical results on the finance-inclusiveness nexus
provide evidence-based policy interventions that can help
in reducing income disparities and enhancing shared
prosperity. The findings imply that policymakers and
practitioners need to focus their attention on promoting
financial access and financial depth in marginalized
regions to create a significant impact on inclusive growth
in Kenya. | en_US |
| dc.language.iso | en | en_US |
| dc.publisher | International Journal of Economics, | en_US |
| dc.subject | Inclusive, Financial, Inequality, Growth, Income | en_US |
| dc.title | Financial Development and Its Effect on Inclusive Growth in Kenya | en_US |
| dc.type | Article | en_US |
