Credit Access and Savings Mobilization: Evidence from Kenya and Tanzania

Dunstone Ulwodi, Peter Muriu


This paper examines access to credit and savings mobilization in Kenya and Tanzania. The economies of these countries are closely interlinked and any shocks to one economy could have a contagion effect on the other. While savings and access to credit play a significant role in securing investment, available evidence shows low savings rates in Kenya and Tanzania. The paper utilizes cross-sectional data obtained from the FinAccess and FinScope surveys of 2013 in Kenya and Tanzania respectively. The Seemingly unrelated regression equations (SURE) approach is used to develop a policy framework for intervention. Estimation results reveal that socioeconomic and demographic factors are key determinants of access to savings and credit in the two countries. Specifically, education, income, age, social capital, location and gender were found to be the most significant determinants of access to and use of credit and savings products in both countries.

Keywords: Access to credit, Savings mobilization, Seemingly unrelated regression

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ISSN (Paper)2224-5731 ISSN (Online)2225-0972

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