We Need to Talk About Financial Inclusion for Women

 There was a disturbing revelation in the Global Findex Report which was published in April 2018. Aside from disclosing that financial inclusion levels had stalled and are in decline, it also revealed that women were being excluded twice as fast as men.

The Global Findex report suggests that “any effort to increase overall account ownership [in Nigeria] needs to prioritise financial inclusion for women.” We agree for several reasons. Prioritising women’s financial inclusion is good for achieving inclusive growth because women are natural builders. They tend to invest more of their income in the development and advancement of their families and communities.

Research has shown that when women are economically empowered, they prioritise household responsibilities such as children’s education and housing while men prioritise business expenses and sometimes make large investments in fixed assets like land.

As a result, female empowerment and financial inclusion have immediate trickle-down effects on the society at the grassroots compared to men. Empowering women also contributes towards the fulfillment of the Sustainable Development Goals (SDGs), particularly, SDG 5 – Gender Equality.

There are several low hanging fruits we can initiate that would increase financial access for women. The strategies presented in this article have been utilised in other regions and demonstrate the possibilities.

 Informal + Formal

Globally, women are actively engaged in formal and informal economic sectors, yet a significant number are being served by only informal financial services providers. For these women, the sharing economy is not a new concept. Banding together to pool resources and save towards a common goal is regular practice.

Informal savings clubs and cooperatives minimise the impact of financial shocks caused by major purchases and big-ticket expenses such as school fees and even emergencies such as a death in the family.

Several financial inclusion efforts have been successful via partnerships with informal financial service providers, to onboard unbanked women into the formal sector. For example, a programme led by CARE International across sub-Saharan Africa with over 5,000 informal savings groups provided linkages to banks while supporting the development of products that met the needs of the group members.

These partnerships enhanced the benefits of the informal providers and reduced their risks while helping thousands of women attain greater financial security and access other financial services including insurance, mobile banking and others.

Take the service to them

Women are economically active as they strive to feed their families and manage the meagre financial resources available to them. However, there are psychological factors inhibiting their formal financial inclusion; for example, banking halls are not only intimidating but are also not in the proximity of many of the unbanked populations.

Mobility is also a luxury many women cannot afford as they juggle business activities, take care of kids and tend to the home. Being able to take financial services, from within traditional banking halls, to their “natural habitat” and at convenient times helps overcome that hurdle. Using the on-demand model, it is possible to take the banking service to their places of business, meetups with fellow women and so on, to market these services to them.

Gender-specific services

Several financial institutions have recorded success onboarding financially-excluded women by focusing on female peculiarities. For instance, women experience more disruptions in their earning patterns due to pregnancy, motherhood and family migration among several others. Therefore, loan and credit services that accommodate these disruptions by offering shorter tenures have been popular among this demography.

A pregnant woman who is still economically active will have anxieties about the months before and after giving birth – a pain point which financial products can and should address. In fact, the pregnancy stage is an ideal opportunity to introduce financial products/services to excluded lower-income women as it positions their minds towards future planning, savings, and the like.

Partnerships with women-facing development initiatives/projects

There is a popular aphorism that says, “if you want to go fast, go alone; if you want to go far, go together”. We need more partnerships between financial service providers and women-focused development projects. Aside curbing the duplication of efforts by piggybacking on the progress of women development projects, the addition of financial services as a value-add to these projects boosts their appeal and impact.

Gender inequity and its impact on female financial inclusion is no joke. It constitutes one of the problems plaguing us as a nation as it limits women’s productivity and economic contributions, crippling their chances of achieving their potential, all of which have significant socio-economic consequences.

What other ways can we improve financial inclusion in general?

Please send in your feedback via email: sustainabledfs@lbs.edu.ng or Twitter: @sustainabledfs

Dr Olayinka David-West and Ibukun Taiwo are members of the Sustainable and Inclusive Digital Financial Services initiative at the Lagos Business School