Towards digital financial inclusion for women in Africa

The gender gap in financial inclusion and more specifically, within mobile money, is still alarming and women remain continuously and disproportionately excluded from the formal financial sector. This is a reality around the world, and in many African countries, this is not different. Research has shown that women and girls carry the global burden of poverty, which as a consequence deprives women from vital health, education, opportunities and many other socio-economic issues. This results in women earning less money, being underrepresented in economic and political decisions, and in the end, are left excluded from the economic growth benefits. 

Digital financial inclusion has emerged as a practical strategy for helping the marginalized - such as women and girls - improve their situation. And, in some African countries, such as Côte d’Ivoire, digital finance has succeeded in establishing a more democratic and equal financial sector. Despite seeing this progress, women continue to remain disproportionately excluded from the formal financial sector in many of the other African countries, like Cameroon, Chad, Gabon, and Niger - due to complex social, cultural, economic, and legal barriers. (see table below)

Kyle Holloway, Zahra Niazi, and Rebecca Rouse, “Women’s Economic Empowerment Through Financial Inclusion: A Review of Existing Evidence and Remaining Knowledge Gaps” (report, Innovations for Poverty Action, New Haven, Connecticut, 2017).

To address inequality - in any form - has become an important topic and many organizations and governments are making it a top priority in their political, social and economic agendas. The G7 did not disappoint us in this matter and this year, G7’s French Presidency chose “fighting inequality” as one of the core issues to be approached by their 2019’s agenda. The French Presidency stresses, on their official website, that: “Together, we want to find effective tools to ensure sustainable economic development in Africa, fostering the creation of jobs for young people and women’s entrepreneurship. Access to education and health, which are essential conditions to combat inequality of opportunity, digital inclusion, and access to finance for economic actors are central to our discussions with our African partners”. 

Like most ideas, fighting inequality and creating inclusion, are abstract concepts that need to be broken down into practical steps in order to generate positive and effective results. That is why the Gates Foundation, at the request of the G7 French Presidency, developed a report on “Women’s digital financial inclusion in Africa” where they have established an objective and practical implementation plan to achieve a more inclusive digital economy. According to the Gates Foundation itself: “The report draws on the lessons our foundation has learned about financial services for the poor since we started investing in the area about 15 years ago” and it “identifies five key ways in which G7 countries can support African countries as their leaders seek to include more than 400 million people in the digital economy for the first time”. 

The five keys, or pillars, identified by the Gates Foundation to support African countries to develop a better and more extensive digital financial inclusion are the following:

1. Interoperability

   Build an interoperable digital payment infrastructure so that you can transact with anyone else, even if you have different service providers.

2. Digital identity

   Build equitable digital identification systems that cover each and every individual on the continent, giving all people the formal proof of identity they need to open and use financial accounts.

3. Regulation

   Update financial regulations to make space for digital products and services while keeping the financial system secure.

4. Assessment of digital readiness

   Help countries identify investments and policies that enable them to maximize the social and economic returns from digital technologies and infrastructure while minimizing potential harms.

5. Gender-specific research 

   Research the best ways to design digital financial systems and deliver digital financial services to maximize gender equality.
   

By following these pathways together, the Foundation assures that the G7 governments will be able to achieve their goals in reducing inequality, closing the gender gap across the African continent and helping the world’s poorest people build a pathway to prosperity for their families and their nations. 

Access to digital financial services may not be the first thing we think when talking about inequality, however to women who have been excluded from the benefits of economic growth and underrepresented in the economic and political decisions of their communities, this step is their gateway to more opportunities. Besides, once women are part of the economic system, they do not only benefit from it; they become empowered to help to advance and push economic growth. Change in the current financial inclusion sphere in African countries will be seen, once the G7 governments together with African leaders are committed to taking the five steps identified by the Gates Foundation. 

Read the full report here.