VENTURES AFRICA – A dozen African government, finance and business leaders, including Nigeria’s Finance Minister, Dr Ngozi Okonjo-Iweala, agreed surprisingly, earlier this week in Nairobi, that a partnership between women and mobile phones could be the next big thing for Africa’s growth story.
“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. It’s not just about empowering women, it’s about economic growth. 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,” Dr Ngozi Okonjo-Iweala asserted at the summit.
There are a number of reasons for an assertion this bold. First off, an equally bold assertion from global consultancy, Bain & Company in 2009 explained that globally, women control nearly $12 trillion of the overall $18.4 trillion in consumer discretionary spending. In the next five years, women will control $15 trillion. By 2028, they will control nearly 75 percent of consumer discretionary spending worldwide.
Furthermore, according to the Women’s World Banking, 73 percent of Nigerian women have never used a financial product, they rely, instead, on traditional savings groups where a collector comes to collect their daily earnings. Given that women usually constitute the majority in most geographic settings, Nigeria may have as much as 62 million unbanked women with the potential to add $2.33 billion to the formal financial services sector annually if they all saved N500 ($3) every month.
The experts also agreed that women are better than men at repaying loans and saving money, therefore, their total financial inclusion is, in an economic sense, a more worthwhile target for financial institutions. This explains the recent partnership between the Women’s World Banking and Nigeria’s Diamond Bank which produced a pilot savings account to reach this huge and untapped market with savings accounts which can be operated from their mobile phones.
Similar to this, Kenya Women Holding, the largest microfinance network in Kenya, offers loans to women so they can buy mobile phones and keep their financial transactions confidential. “Women in Africa do not need charity to finance the issue. Control of the resources that they create is the issue, and respect in the financial sector is the issue,” said Jennifer Riria, CEO of Kenya Women Holding.
Despite the successful financial inclusion story in Kenya, the 12-man panel insisted there was still significant margin for improvement, especially in the rest of Africa.
“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 concluded.