Women as self-advocates for financial policies and products
By Anna Mushi
Over the past decade, the financial sector landscape has radically changed not only in terms of the development of products and services offered, but also due to the evolution of technology. New digital financial services have not only created access for millions of people, but also provided cost effective distribution channels and a wide range of new business opportunities for existing providers and encouraged new market players from industries such as mobile network operators and fintechs to contribute to market expansion.
In Tanzania, financial inclusion has risen dramatically from 44% in 2009 to 65% in 2017, according to the latest FinScope study. Despite such progress however, like in many developing countries, 10% more men than women are using formal financial services.
From research and studies, the reasons for the gender gap have been identified on both the supply and demand sides. For financial service providers, the key challenges have been to provide appropriate and affordable solutions that meet the needs of women and can cost-effectively meet their business goals. The rise of mobile phone ownership and the evolution of technology have had a great impact in overcoming distribution barriers, but many challenges on the demand side are not being overcome.
For many women, continuing social, cultural and economic norms, together with lack of formal education, literacy, numeracy, income, property and mobile phone ownership, restrict their ability to make informed decisions about their financial activities, provide required collateral documentation required by registration regulations and take advantage of new products and services offered in the digital space.
How can women self-advocate for financial products and services? It is clear that women in Tanzania represent a significant untapped market for financial services and products. The FinScope Tanzania 2017 study shows that women take responsibility for the livelihoods, household resilience and wealth of their families and communities and many would like to start or invest in business. Due to the challenges they face in accessing formal services, the study shows too that many women are relying on the informal financial sector and in fact over half save at home, a quarter use community savings groups and over 60% borrow from family and friends. In addition, even with low mobile phone ownership, over 5% receive funds through mobile money.
For women to become self-advocates for financial products and services, they need appropriate mechanisms and space to voice to their needs and challenges so that financial service providers can understand and develop products that meet both these needs and commercial objectives. The government of Tanzania has put women’s financial inclusion at the heart of its National Financial Inclusion agenda and is working to create an enabling environment that reduces legal and regulatory restrictions and, through the National Financial Education Framework, provide financial education and literacy programmes to increase women’s knowledge and understanding of financial products and services to enable them to make informed decisions and to address concerns with providers.
On a community level, many women are deriving value from community based informal financial services, mainly through savings groups. The value for women is that the structure is simple and transparent and, as many members are women, social and cultural norms have been broken down and knowledge is widely shared. As more women see the benefits of financial services in their day-to-day lives, gain understanding and appreciation of the positive impact that they can make on their lives, they will, over time, have sufficient confidence and trust to take up formal services which offer more options and security. Word of mouth is a strong advocate for taking new risks and, as women have encouraged others to join informal schemes in the past, women that have successfully taken up formal financial services need to share their experiences with others to encourage them to do the same.
Women’s participation in the financial sector is crucial for the future of their families and communities. With support of increased knowledge and understanding of the value of financial services in their lives, the voice of this significant untapped market has the potential to make positive change to the financial sector by providing new demand for customer-led, innovative and affordable solutions which can contribute to Tanzania’s economic growth.
For further information:
Financial Sector Deepening Trust
2nd Floor “De Ocean Plaza”
Plot 400 Toure Drive Oysterbay
Dar es Salaam, Tanzania
www.fsdt.or.tz
