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Financial inclusion and energy access: Evidence from Kenya

Mbate, Michael and Fall, El Hadji (2025) Financial inclusion and energy access: Evidence from Kenya. Innovation and Green Development, 4 (2). ISSN 2949-7531

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Identification Number: 10.1016/j.igd.2025.100219

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.

Item Type: Article
Additional Information: © 2025 The Author(s)
Divisions: LSE
Subjects: H Social Sciences > HG Finance
G Geography. Anthropology. Recreation > GE Environmental Sciences
T Technology
JEL classification: Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q4 - Energy > Q40 - General
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture; Natural Resources; Energy; Environment; Other Primary Products
G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
N - Economic History > N2 - Financial Markets and Institutions > N27 - Africa; Oceania
Date Deposited: 11 Mar 2025 09:45
Last Modified: 11 Mar 2025 17:04
URI: http://eprints.lse.ac.uk/id/eprint/127538

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