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Financial inclusion and energy access: Evidence from Kenya

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  • Mbate, Michael
  • Fall, El Hadji

Abstract

This paper examines the relationship between financial inclusion and energy access, leveraging micro-level survey data from Kenya (2016–2018) and employing propensity score matching to establish causal linkages. The analysis reveals that financial inclusion significantly enhances energy access, with distinct variations across financial institutions and energy types. Financial inclusion operates through three critical mechanisms: increasing households’ willingness to pay for energy, alleviating upfront connection costs via flexible payment schemes, and enabling seamless energy-related transactions through digital platforms. These findings underscore the importance of inclusive financial policies and the role of formal and informal financial institutions as intermediaries in addressing energy poverty.

Suggested Citation

  • Mbate, Michael & Fall, El Hadji, 2025. "Financial inclusion and energy access: Evidence from Kenya," LSE Research Online Documents on Economics 127538, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:127538
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    References listed on IDEAS

    as
    1. Michael Grimm & Anicet Munyehirwe & Jörg Peters & Maximiliane Sievert, 2017. "A First Step up the Energy Ladder? Low Cost Solar Kits and Household’s Welfare in Rural Rwanda," The World Bank Economic Review, World Bank, vol. 31(3), pages 631-649.
    2. Sievert, Maximiliane & Steinbuks, Jevgenijs, 2020. "Willingness to pay for electricity access in extreme poverty: Evidence from sub-Saharan Africa," World Development, Elsevier, vol. 128(C).
    3. Gafa, Dede W. & Egbendewe, Aklesso Y.G., 2021. "Energy poverty in rural West Africa and its determinants: Evidence from Senegal and Togo," Energy Policy, Elsevier, vol. 156(C).
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    More about this item

    Keywords

    digital platforms; energy access; energy costs; financial inclusion; propensity score matching; willingness to pay;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • N27 - Economic History - - Financial Markets and Institutions - - - Africa; Oceania

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