The rise in weather shocks in Kenya has compromised farmers’ ability to smooth consumption, rendering farmers more vulnerable. In light of this development, it is essential to analyze the relationship between that vulnerability and the usage of different financial services, and the reverse role of vulnerability on the take up of these services. I run a simultaneous three-stage-least square model to control for the endogeneity and identify the interplay between usage of credit, savings, and vulnerability. I find that no variable significantly influences the usage of any form of credit, which has a significant and positive impact on savings and vulnerability through loans from informal sources. I also find strong evidence of a substitution effect between taking loans from formal sources and taking loans from informal sources, since the two are asymmetrically correlated with vulnerability. External credit rationing is the most likely culprit. Additionally, I demonstrate that financial penetration does not guarantee the usage of services such as credit, and is therefore insufficient in tackling vulnerability.