HAWA CASSIM: Plugging the (real) financial inclusion gender gap

According to a recent World Bank report, 85% of SA adults now have bank accounts. Interestingly, ownership shot up 16 percentage points between 2017 and 2021, including formal financial institutions and mobile money accounts, and is most likely due to the pandemic driving the need to transact online.

However, while these statistics reflect a higher percentage of financial inclusion, does this mean women are equally represented in these figures, or is there still work to be done?

With gender equality taking a huge step back with Covid-19, going from 99 years to full equality to 136 years, according to the World Economic Forum (WEF), SA faired notably well in the WEF’s Global Gender Gap Report 2022 with a gender gap index score of 0.78, ranking 20th out of 146 countries. However, while more equality was observed in terms of educational attainment, as well as health and survival, gender disparity was distinctly evident in political and economic participation and opportunity.

When looking more closely at gender gaps within financial inclusion, the Global Findex Database report states that SA, perhaps surprisingly, does not have one, along with other countries such as Russia and Sri Lanka. Furthermore, studies show that SA women are more financially included than their counterparts in other Southern African Development Community (Sadc) countries, attributed largely to the requirements for grant distributions. Does this then represent an equal playing field when it comes to women and banking services? Not necessarily, and here’s why.

While women are relatively “included” in formal banking systems through bank account ownership, this still does not automatically equate to full usage of the account. In addition, a significant number of female customers in SA still do not have access to other financial products or solutions. While there are a number of government policies in place to address inequality, unfortunately those pertaining to financial inclusion do not necessarily focus on specific genders.

The fact is, among the most marginalised are female banking customers and entrepreneurs. They require saving, investing, funding and credit opportunities to run their entities not only sustainably, but also profitably. While the government has dedicated several initiatives to help uplift entrepreneurs, most have not been tailored to assist women in addressing the specific challenges they face day to day when operating a business.

Illiteracy and cultural nuances aside, these include being unable to access or not being aware of the financial solutions on offer. Research also suggests women are more likely to have their businesses liquidated than their male peers. The question is, what role do financial institutions have to play in bridging this gap, and is technology the answer?

Financial technology, which includes digital platforms, mobile phones and the internet, can create opportunities for women to increase or earn income and gain access to knowledge and information that helps them to entrench their role in the economic system. But it will be an uphill task to foster gender equality in the financial sector using digital technology. Women are 8% less likely to own a mobile phone and 20% less likely to use the internet on a mobile.

According to a Gender Equality Report, women are also more likely to receive less funding than their male counterparts. This is often associated with women operating in highly competitive sectors, gender-biased credit scoring and gender stereotyping.

Therein lies the opportunity to provide cost-effective financial services and solutions and use digital financial technology to expand services to both the banked and unbanked women in SA; this also holds true for women across the continent, where digital banking is still in its nascent growth stages, unlike in SA, for example. This also means fostering innovation and ensuring that the regulatory framework supports the provision of efficient and sustainable digital products for financial inclusion.

Diversity

But financial inclusion for women using digital technology should go beyond simply enabling them to open a bank account or access credit. For example, we can use digital technology to gather data that can be used to increase female participation in the economy, as evidence shows that increased diversity can bring value to both social and economic transformation in a developing country such as SA.

While there is no doubt that technology and fintech solutions enhance access to financial services, education is critical: there is no point in providing tools for female business owners that they are unable to effectively use.

Nedbank recently partnered with the Africa Women Innovation & Entrepreneurship Forum to launch a growth accelerator programme for women-led small businesses, offering business modelling, growth strategies, mentorship and access to strategic networks and partnerships.

Ultimately, to build back better and create the necessary resilience for the economy to recover and grow, all relevant stakeholders need to collaborate to ensure that women become economically empowered and self-sustainable, not only through accessible opportunities underpinned by technological advancements (credit, loans and other products), but also through financial literacy, training, and support systems.

More importantly, these initiatives need to be monitored continuously to ensure ongoing progress and to ensure that these entrepreneurs remain in business.

We can use digital technologies to provide opportunities for everyone, but, importantly, to achieve the economic empowerment of women and girls in SA. The country is one of the countries in the region that has experienced a surge in digital innovation, led by financial institutions as well as mobile and fintech companies.

This transformation of the financial sector using digital technology has the potential to accelerate financial inclusion even further. This will help to further reduce poverty while increasing women’s economic and productive capability, resulting in a better life.

• Cassim is group technology executive at Nedbank.