Abstract
The objective of this paper is to model the likelihood of the bank account holder in a traditional fiat money banking system (f-banking) to be e-banking (or mobile-banking) financially included. The Bivariate Probit Sample Selection model is applied with a recent data set from the Kenya Financial Access Household Survey 2015, administered by FSD Kenya supported by the Central Bank of Kenya, and Kenyan National Bureau of Statistics. The results show that there is 91.98% likelihood of f-banked person to be e-banked. By contrast, the results also show that the absolute financially excluded have 75.71% probability to be e-banking financially included. Economic intuition mixed with regression analysis reveals that for an average financially excluded person, it is as a result of persevering of past hardship and an uphill battle to be finally e-banking financially included. The results raise a call to policy makers that the easiness for the f-banked to enter the e-banking market may soon result in e-banking cost rising to the detriment of the financially excluded, who have so laboriously tested the market in the presence of uninsured and unhedged eminent risk.