Despite financial inclusion being a key driver of growth and income equality, developing countries continue to have significant proportion of populations without access and usage of basic formal financial services. Instead, most still subscribe to informal financial services, which have low or nonexistent entry barriers. In the context of small holder farmers, informal financial services can moderate their access to finance where there are gaps in the formal financial instrumentation. The present study, therefore, sought to determine the moderating effect of informal financial services on the use of formal financial services among small holder farmers in Kenya. The target population for this study were small holder farmers from Nakuru, Busia, and Kirinyaga counties in Kenya; a sample size of 496 was obtained and selected through purposive and stratified random sampling techniques. Data were collected using copies of a researcher-developed questionnaire and analyzed using multiple linear regression analysis with Stata. The findings reveal that informal financial services did not have a moderating effect on utilization of formal financial services among small holder farmers. The study recommends that the formal financial institutions develop products and work closely with informal financial services to encourage more utilization of financial services.
