Takeaways
- In Africa, more than 70% of women are financially excluded
- A bolder, more inclusive approach is necessary when it comes to ensuring that women are financially included
- Financial inclusion opens doors to education, healthcare, and entrepreneurship, breaking the cycle of poverty and vulnerability
- Financial inclusion is key for women to take charge of their economic lives, make informed decisions and participate actively in the formal economy.
Introduction
There’s no denying the powerful role women play in driving economic growth, but with over 1.3 billion women worldwide operating outside the formal financial system, financial exclusion remains a problem that still needs to be solved. Unfortunately, Africa mirrors this situation, with more than 70% of women facing financial exclusion. A bolder, more inclusive approach is needed to assist and empower women in driving sustainable development within their communities.
So what are the barriers that women face in accessing finance?
While Africa boasts the highest growth rate of female-run businesses in the world, women continue to face challenges that are unique to them. One of the biggest hurdles they face is the absence of formal identification, which is particularly prevalent in rural areas; this limits their ability to establish a formal financial footprint. However, this is not the only obstacle they face. The absence of tangible assets or collateral becomes a roadblock to business growth as they are unable to access loans or credit from financial institutions such as traditional banks.
Secondly, lower levels of education and financial literacy among women in Africa stem from multiple factors including the influence of societal and cultural norms, which often prioritise the education of boys over girls. Limited access to quality education, particularly in rural areas, further exacerbates the problem, with the lack of schools, large distances to educational facilities, and inadequate resources all posing significant barriers to women’s financial inclusion.
Moreover, economic constraints and household responsibilities also play a role in limiting women’s ability to pursue higher education or receive formal financial literacy training. Financial barriers which prevent them from accessing educational opportunities include the cost of tuition, school supplies, and transportation. Additionally, their responsibilities in managing household tasks and caring for family members can consume their time and energy, leaving limited resources for pursuing further education or acquiring financial literacy skills. The combined effect of these constraints holds women back and operating on the margins of society rather than in the economic mainstream.
How can these challenges be solved?
Solving the challenges women face requires a proactive approach that prioritises women’s financial needs, their goals and considers their unique circumstances. Despite progress, accessibility continues to be a challenge for women – especially in remote areas. Mobile phones have become a game-changer in this regard, as they enable women to open bank accounts and access financial services remotely, eliminating the need for physical visits to banks. By digitising financial products, neobanks such as Be Mobile Africa, have built inclusive products with lower costs and faster processing times, enabling more women to participate in the formal economy.
In closing
Financial inclusion is key for women to take charge of their economic lives, make informed decisions and participate actively in the formal economy. This inclusion opens doors to education, healthcare, and entrepreneurship, breaking the cycle of poverty and vulnerability. It also challenges traditional gender roles, fosters economic independence, and promotes gender equality. Solving the challenges women face requires proactive approaches that prioritise understanding women’s financial product needs.
