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By Reneilwe Mthelebofu – Communication and Language Services
Despite bold, increased, and concerted action on the part of policy makers, regulators and other stakeholders in the financial services sector, the barriers that hinder the full financial inclusion of women are still prevalent. These barriers leave women disproportionately affected and discriminated against because of their gender, despite their resourcefulness and talent. Understanding these barriers is the key to removing them and advancing the financial inclusion of women.
According to Nomsa Daniels, the Executive Director of New Faces New Voices, a Pan-African advocacy group that aims to increase the participation and influence of women in the financial sector, some of the barriers women face include low levels of financial literacy, lower income levels, time and mobility constraints, socio-cultural constraints, lack of tangible assets and collateral, legal constraints, inter-role conflicts from juggling domestic and professional roles and the lack of market exposure.
The gender gap, which prevails even in countries with the highest financial inclusion, continues to thwart even the most well-meaning, “progressive” societies. In Africa, for instance, the gender gap in ownership of a bank account is highest in Botswana, followed by Swaziland and Mauritius, with South Africa being the only country with a positive gender gap, thanks to women receiving social grants through the SASSA card.
The gender gap becomes more glaring when factoring in access to financial services. For example, in South Africa, despite a higher proportion of women being banked, men who are banked make more regular use of accounts. Women are more likely to use the accounts as ‘postboxes’ – one deposit into the account and the withdrawal of all funds immediately thereafter.
More women also find themselves having to use someone else’s account to make transactions, especially in places like Swaziland, Zambia, and Tanzania. “Lack of money” is cited as the primary reason for not having bank accounts. Women also show a higher propensity to using informal financial services in the form of community-based groups such as stokvels, burial societies; as opposed to formal, “mainstream” banking.
Financial exclusion has been noted as a challenge for small and medium-sized enterprises (SMEs). This is a further area in which greater inclusion of women could have broad benefits, seeing that women represent 30 percent to 37 percent of all SMEs. This means 8 to 10 million women-owned firms in emerging markets are unable to use financial services to support, sustain and grow their businesses, thus contribute to employment and economic growth.
Strategies to tackle the barriers to inclusion for women can go a long way toward advancing the financial inclusion of women in the SADC region.
Institutions such as financial regulators can and should play a role in promoting financial inclusion, especially of women. The FSCA aims to develop an enabling environment to ensure the transformation of the entire financial value-chain so that even the unserved and under-served segments of the market, including women, are not excluded from the economy.
The FSCA’s Financial Inclusion Strategy outlines a number of interventions looking to remedy this situation. This includes the collection of data on financial inclusion to monitor progress, support for small financial services providers who typically serve lower income customers with simple and affordable products; and the creation of a regulatory and supervisory framework that promotes financial inclusion. In the greater scheme of things, women will benefit from these initiatives.
The FSCA’s financial education programmes are also in line with research from the Organisation for Economic Co-operation and Development (OECD), titled Addressing women’s needs for financial education, which found that financial education can help women’s financial well-being and opportunities by improving their financial knowledge, attitudes, and skills. Financial education programmes aimed at women empower them with a valuable understanding of terms used in the financial services sector in order to enhance financial management skills and decision making.
Unfortunately, women who rely on informal financial services providers often find themselves exposed to the risks of exploitation. Fortunately, this can be addressed by strengthening and capacitating informal financial service providers as much as possible, and by encouraging their transition into formal, regulated providers who can continue to offer affordable, quality financial services and products.
Technology has also accelerated alternatives such as agency banking and mobile money, especially in remote areas.
More broadly, improving the income-generating capability of women will contribute to their financial inclusion, and this inclusion has also been strongly linked with the ability to generate income.
Gender inclusive financial systems will be key in the effort to close the gender gap and advance the financial inclusion of women in South Africa and on the continent. As financial inclusion is deepened in South Africa, setting gender-specific targets that ensure that women are reached, and creating reporting incentives that capture or measure these targets, would go a long way toward empowering not only women to fully participate in our economy, but previously marginalised communities in general. Afterall, as the old African proverb goes, “You educate a man, you educate an individual. But if you educate a woman, you educate a nation”.
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