- Data from the World Bank’s Global Findex Database 2021 indicates significant strides in female financial inclusion over the past decade.
- In the 10 years leading up to 2021, the share of women in Africa who owned a financial account doubled to more than 49 per cent.
- This surge in women’s account ownership in many developing countries is largely attributed to mobile money platforms.
Data from the World Bank’s Global Findex Database 2021 indicates significant strides in female financial inclusion over the past decade. The gender gap in ownership of formal financial accounts in developing countries has decreased from 9 to 6 per cent, signifying a move towards financial parity for women.
The increase in account ownership among women has outpaced that of men, with 68 per cent of adult women in developing nations now participating in formal financial systems. This surge in women’s account ownership in many developing countries is largely attributed to mobile money platforms.
Mobile banking and other digital financial technologies make financial services cheaper and more widely accessible, but gender gaps persist.
Although it is the bedrock of financial inclusion, the growth of mobile banking in Africa has contributed to the gender gap in financial inclusion. This negative impact of financial digitisation calls for restructuring policies that govern mobile banking.
Growth of financial inclusion for women
In the 10 years leading up to 2021, the share of women in Africa who owned a financial account doubled to more than 49 per cent. Since 2017 alone, account ownership rates for women in the region increased 12 percentage points, driven entirely by increased adoption of mobile money accounts.
Mobile money is a financial service offered by providers in the fintech industry in partnership with mobile network operators. Local mobile agents enhance mobile money services, where people can efficiently deposit and withdraw cash to make payments, pay bills, or keep money safely away from home.
It is evident in some countries; for instance, in Cameroon, account ownership for women increased from 30 per cent in 2017 to 49 per cent in 2021, including a 26 percentage point increase in mobile money accounts, while in Ghana, account ownership for women increased from 54 per cent to over 63 per cent, including a 21 percentage point increase in mobile money accounts.
Barriers to female financial inclusion
A prominent barrier to financial inclusion is the lack of identity (national ID) and other documents needed to open a financial account. In Africa, 37 per cent of adults cite the lack of documents as a reason for not having a financial account.
Another barrier reported mostly by women is that another family member already has an account, so they do not believe they need their own account. However, women should be educated that a financial account is not only for savings but is also very useful in emergencies to receive money and grants.
Most often, the distance to banks or ATMs is too far for women to travel. Distance is a major factor accounting for around 31 per cent of unbanked adults in developing economies.
Read Also: Mobile money: Transaction charges remain the biggest threat to service
Mobile banking role in raising female financial inclusion
Mobile money lowers the barriers to documentation compared to banks. Moreover, regulators and mobile money providers should adopt a flexible or tiered Know Your Customer (KYC) approach with no KYC, partial KYC, and full KYC options to open mobile money accounts. A woman without documentation can register without a KYC option but will get limited services and lower transaction limits.
Meanwhile, the woman providing all documents can be registered for the full KYC account, have access to all services, and have higher transaction limits. For women without documents in areas like rural, tribal, or refugee settlements, regulators should permit alternative documents like letters from a village head, a beneficiary ID, or a refugee certificate.
Governments should design female welfare programs focused on paying grants and subsidies directly into women’s accounts to encourage them to open financial accounts. Mobile money accounts are most suitable and affordable for women’s first formal financial accounts as they do not require a minimum balance, account opening fees, or maintenance fees. Women can keep their mobile money accounts active even with a zero balance.
Mobile money providers have established extensive agent networks that are bigger than bank and ATM networks multiple times. Mobile money agents offer registration, deposit, withdrawal, and over-the-counter payment services, bringing these last-mile services closer to consumers’ homes and overcoming the distance hurdle. For example, in Rwanda, the average time to reach a mobile money agent is 18 minutes or 78 seconds, while it is over 40 minutes for banks and other financial institutions.
Conclusion
Given the proven benefits of financial inclusion for women in Africa, it is critical that governments and providers continue to take steps to enable access for the 50 per cent of women who remain unbanked.
One way is to focus on barriers to phone ownership that women on the continent still face, preventing them from accessing mobile money services. According to the Global Money for Mobile Communications (GSM) Association, including the affordability of handsets, literacy, and digital skills, is crucial; though slightly more than half of the unbanked adults in the region have a mobile phone, millions do not, including 37 per cent of all women,
According to Gallup World Poll and Findex data. This is not just a problem of network access but also one of documentation, given that 1 in 5 unbanked women report that a lack of an official government-issued ID prevents them from opening an account.
For example, in Niger, only 45 per cent of women have a mobile phone—and only 56 per cent of women have ID. Governments can help close the mobile phone gender gap by increasing women’s access to a national identification document, typically required for obtaining financial and mobile phone services.
