NAIROBI (Thomson Reuters Foundation) – Mobile phone technology can help to bring financial services to the 80 percent of African women who do not have a bank account and bolster the growth of the world’s poorest continent, Nigeria’s finance minister, Ngozi Okonjo-Iweala, said on Monday.
Okonjo-Iweala was one of a dozen government, finance and business leaders who met in Nairobi on Monday to roll out a plan to bring financial services to more poor African women.
“It’s not just about empowering women, it’s about economic growth,” said Okonjo-Iweala, honorary co-chair of the newly-formed Africa Advisory Council of the U.S.-based charity Women’s World Banking.
“Unless we can make access to finance easier for women in their businesses, we will be missing out on a significant portion of growth within our economies.”
She cited a study by accounting firm Ernst & Young which shows that 75 percent of consumer spending power will be in the hands of women by 2028.
Women are also known to be better than men at repaying loans and saving money, the experts said.
In Nigeria, 73 percent of women have never used a financial product, according to Women’s World Banking. Instead, they rely on in traditional savings groups, where a collector comes to collect their daily earnings.
Women’s World Banking worked with Nigeria’s Diamond Bank to develop a pilot savings account, called Beta (pidgin English for ‘good’) to reach this vast, untapped market.
Sale representatives go to the open-air markets of Lagos each day, rather than waiting for customers to come to the bank. Using their mobile phones, they open savings accounts for busy traders in a few minutes.
They also come to their customers’ market stalls to collect money that they wish to deposit in their accounts, the same way those who run informal savings groups visit their members.
The deposits are confirmed by SMS text message.
In its first year, more than 132,000 people who had never had a bank account opened Beta accounts.
“I think technology is going to help us go to scale,” said Okonjo-Iweala.
Kenya is one of Africa’s leaders thanks to mobile phone-based financial services, such as Safaricom’s Mpesa.
But there is still a big gender gap here, with 53 percent of women compared to 71 percent of men using formal financial services, the experts said.
One challenge with mobile banking is that poor families often share one phone – and that is controlled by the man.
“Women in Africa do not need charity,” said Jennifer Riria, chief executive of Kenya Women Holding, the largest microfinance network in Kenya.
“Access (to finance) is the issue. Control of the resources that they create is the issue. And respect in the financial sector is the issue.”
Her bank plans to offer women loans to buy mobile phones so that they can keep their financial transactions confidential.
“It’s very important for empowering women and providing control,” she said.
(Reporting by Katy Migiro; Editing by Katie Nguyen)