Risk-taking men, time-constrained women: What gender gaps mean for financial inclusion

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Do men and women use financial services differently? This is the question we set out to answer when we conducted six country studies on gender finance in sub- Saharan Africa.

The purpose of our study was twofold. First, we wanted to explore the reasons behind differences in usage of financial products. Second, based on these underlying reasons, we wanted to formulate workable intervention strategies that we could recommend as gender-sensitive financial sector policy approaches for policymakers and stakeholders. The countries we studied included Botswana, Malawi, Namibia, Rwanda, Uganda, and Zambia. Based on 50 to 75 interviews per country with individuals from both urban and rural areas, we analysed how and why men and women are using credit, savings and insurance products.

What did we discover? Overall, we identified a variety of financial behaviours in the six countries, revealing many similarities in how women conduct their finances, but also differences regarding gender gaps, overall access to finance and the approaches by stakeholders and governments.

In all six countries, we found that women tend to have smaller businesses and operate in sectors that require little initial capital, such as retail and services. Also, many women seem more inclined to expand their businesses slowly and over time, with less outside capital. They tend to be more risk-averse and less eager to borrow from formal financial institutions for fear of losing collateral, because they usually bear financial responsibility for their families.

That may also explain women’s preference for informal savings and credit cooperatives. After all, ease and convenience matter to women when choosing where to put their savings and where to borrow, as they are often under higher time constraints than men. Women and men in rural areas have considerably less access to formal financial products than people living in urban or semi-urban areas, because the vast majority of the financial institutions’ infrastructure and branch network is concentrated in urban centres. Uganda, for example, has the most developed microfinance sector of the six countries. But, the Ugandan microfinance sector is mainly concentrated in the urban and semi-urban areas and has only limited outreach to the rural population. Mobile banking is making headway and has been introduced in all countries to varying degrees, but infrastructural and regulatory challenges in particular still remain.

Overall, income and education levels determine the level of usage of formal financial products more than just gender. However, traditional gender roles prevent a level playing field and the gender-neutral approaches that currently prevail fail to benefit women, and to a lesser degree, men as well. The supply and costs of formal financial products are mostly inadequate for the low-income population and the current informal sector, but some countries are taking a more proactive approach to change the status quo than others.

What can our findings tell policymakers and stakeholders about the interventions they should pursue? Firstly, given the current structural shortcomings not only of the formal financial sector but also of legal and social impediments that affect women, policymakers and stakeholders have to determine their objectives and visions for financially un- or underserved segments of their populations. And they will have to accept that actions will certainly require societal adaptations as well. This adds a layer of complexity and nuance to any intervention strategy, because changing prevailing traditions (such as the role of women in society, customary laws, etc.) is a long-term process, more so among the rural and lower income segments of the population. Therefore, it is important to promote awareness campaigns to start the process of change and support widespread financial literacy education, not only for women, but also for the younger generation and future consumers of financial products. We can conclude that in many cases financial inclusion interventions that are geared towards women require a multi-level approach.

Interested in reading our in-depth country reports?

Botswana  Rwanda  Namibia  Uganda  Malawi  Zambia


Judith Frickenstein

Financial Sector Advisor, GIZ

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