Unlocking Financial Inclusion

A fascinating shift is unfolding in African economies, powered by the ingenious union of finance and technology known as Fintech, not traditional institutions. Fintech's dynamism catalyses global financial change, notably Sub-Saharan Africa (SSA) has emerged as a vibrant hub of fintech innovation.

It is becoming clearer that these technological developments have the potential to significantly address a range of societal issues, from financial transactions to equitable inclusion and empowerment. Financial inclusion is emphasised in this setting of financial evolution. For the purposes of this investigation, financial inclusion can be succinctly defined as the accessibility and use of formal financial services by individuals and entities, such as opening a bank account with a regulated financial institution. Technological advancements facilitate this goal, incorporating previously excluded individuals, families, and businesses. This underscores Fintech's pivotal role in achieving comprehensive financial inclusion. 

Empowerment through Fintech: A Tale of Variation

Before delving into the realm of women's empowerment, it is imperative to contextualize the prevailing fintech landscape in SSA. With its diverse socio-economic landscape, the region has become a hub of fintech activity. Fintech's rapid rise has reshaped banking and birthed tailored solutions for SSA's unique challenges. Mobile money platforms like EcoCash in Zimbabwe mark a pivotal point. Leveraging mobile phones, they enable financial services like transfers, payments, savings, and credit. This accessibility fuels a financial revolution, reaching even remote populations. The transformative power of mobile money has not only resulted in increased financial inclusion but has also paved the way for a profound shift in the socio-economic dynamics of the region.

Financial inclusion has emerged as a global priority, with countries recognizing its importance in addressing economic gender disparities and driving progress. The imperative of addressing the economic disparity between genders extends beyond mere social equity. Despite the fact that women constitute a substantial portion of the world's working-age population, approximately 50% are actively employed, contrasting starkly with the 80% participation rate among men. This striking discrepancy stems from limited female participation in the labour force, with those employed often in the informal sector due to lenient regulations. The eventual results of these disparities are reduced productivity and consequently, stunted economic development. According to estimates, the impact of women's limited economic participation leads to economic losses exceeding 10% of GDP in industrialized nations and surging beyond 30% in regions like South Asia, Africa, and the Middle East.

In light of this, we must consider how we may use these historical frameworks to further gender equity. African feminism is mostly influenced by the claims of educated middle-class black women. The underprivileged majority, on the other hand, highlights the disparities between African and Western feminism. This raises concerns about the efficacy of African feminist theories and methodologies, much as how Western feminism interprets African realities. African feminist philosophies emphasise the necessity for African women to express their unique perspectives and against Western feminism's attempts to impose. African feminisms differ between political eras (pre-colonial, colonial, and post-colonial), affected by each country's distinct liberation history. Western feminism's general approach ignores cultural variations and marginalises voices. Non-Western feminists criticise Western attempts to impose their ideas, emphasising the relevance of cultural differences. The diversity of African feminisms, formed by many cultures and historical eras, is its strength. Incorporating interrelated challenges into this diversity, African women's empowerment takes on a resiliency that echoes the Ubuntu philosophy of unity in difference.

This stark reality underscores the significance of addressing gender gaps in financial inclusion. The level of financial inclusion exhibits substantial variations across countries and income levels. For instance, the highest rates of bank account ownership among the adult population are observed in Mauritius and South Africa lead in bank account ownership (80% and 54%, respectively); Angola, Mozambique, Kenya, Zimbabwe, and Morocco follow at around 40%. Amidst this diversity, a pivotal question arises: how do Fintech breakthroughs reshape financial inclusion, particularly for women empowerment? In this context, it is crucial to emphasize that progress has indeed been achieved on multiple fronts. Efforts to unravel colonial legacies, such as Zimbabwe's urban-focused financial system, continue. Historically, banks favoured urban regions in order to serve colonial interests. Due to this urban-centric strategy, rural areas had limited access to banking services after independence.

Zooming in on Zimbabwe as an illustrative case, the country, a signatory to the Maya Declaration (which aims for clear financial inclusion goals, local policy reforms, and progress reports), introduced financial inclusion policies in 2012 and 2016 with a target year of 2020. Youth and women were the target demographics for financial inclusion measures throughout the first phase of the National Financial Inclusion Strategy (2016-2020) and the second, which was initiated in October 2022. For sustainable and inclusive economic progress suitable financial services are crucial for disadvantaged groups: low-income earners, women, youth, and marginalized individuals. Studies have shown that women's active economic involvement boosts household welfare and fuels broader growth, empowering them with financial agency can unleash positive outcomes like increased education investment, improved healthcare, and enhanced entrepreneurship. 

Nonetheless, women continue to encounter structural barriers while seeking official financial services, as gender disparities in financial inclusion persist. Globally, women trail behind men in account ownership. Demirgüç-Kunt et al. found notable gender-based variations in financial service access across economies: low-middle income economies have 9 percentage points, double that of high-income countries which have 5 percentage point difference. In Sub-Saharan Africa, the gender difference in account ownership is relatively modest, with 27 percent of men and 22 percent of women having a bank account. Abel et al. find links between financial inclusion and factors like age, education, literacy, income, and internet access in Zimbabwe.The tide is turning though, thanks to mobile technology proliferation and the rise of mobile money platforms like Eco Cash. 

EcoCash: A Catalyst for Change

EcoCash, by Econet Wireless, exemplifies fintech's revolutionary potential. EcoCash, which differs from traditional transactional methods, is a symbol of a global financial ecosystem mediated by technology. This distinctive quality has significant implications for women, for whom traditional financial institutions frequently stay out of reach owing to infrastructure constraints and cultural restrictions. The technology has successfully demystified financial transactions with an easy-to-use interface and optimised user experience, accelerating the shift from exclusion to agency. The process is simple: Users enrol in mobile banking via their provider, accessing a "mobile e-wallet" on their SIM card; they visit an agent to load funds and facilitate withdrawals for services or transfers.

In their study, Ndlovu and Ndlovu investigate the transformative impact of mobile phones on Zimbabwe's developmental trajectory, revealing the potential for leapfrogging various stages of progress within the country.  They emphasize that, notably, many Zimbabweans now access the internet via mobile phones, a shift from a decade ago. This change results from mobile phones' increased affordability for both devices and SIM cards. This accessibility has democratized ownership, expanding the user base from being predominantly affluent to encompassing a more diverse demographic, including low-income individuals in rural as well as urban settings. A tangible instance of this phenomenon emerges in Chitungwiza, a dormitory town near Harare. Here, the significance of providing respectful farewells to deceased family members is acknowledged, and the challenge of covering funeral expenses is noted. In preparation for this inevitability, these individuals have become policyholders of Econet Zimbabwe's EcoSure micro-insurance funeral cover showing how mobile tech integrates into daily life.

In this context, Eco Cash’s significance amplifies. As a mobile money transfer service circumventing traditional bank account requirements, EcoCash aligns seamlessly with Zimbabweans' widespread technological access. Furthermore, the presence of various agents affiliated with mobile service providers across the country enhances accessibility, particularly for individuals in rural areas. This newfound accessibility empowers marginalized groups like women. Ndlovu and Ndlovu illustrate this through mobile transfers, which replace the need for village meetings. With mobile technology, women can effortlessly coordinate contributions, overcoming distance-related challenges. This convenience not only enhances engagement but also breaks down geographical barriers.  

While EcoCash may offer promising solutions to financial inclusion challenges, it's important to acknowledge that women may face certain obstacles when adopting and utilizing these technologies. Limited digital literacy stands out, which involves using digital tech effectively, ethically, and securely for work and entrepreneurship. Historically, women have had less access to technology and digital tools than males in many societies. Their capacity to use financial platforms efficiently may be hampered by this digital divide. Targeted activities are required to provide women with digital education and training in order to solve this issue. To meet this demand, efforts are being made to bring together members of the women in STEM movement through promoting idea sharing, the sharing of common experiences, and teamwork. These efforts to unite women in the profession are best illustrated by notable initiatives like TechWomen Zimbabwe. 

Zimbabwe's fintech, including Econet, saw major changes due to COVID-19, with a surge in digital financial services. The pandemic accelerated the shift away from cash due to social distancing. Econet's mobile money services likely experienced increased demand. Catching up depends on investments, regulation, and bridging the digital divide. Challenges include limited engagement due to factors like information access and domestic support. Assessing the lasting impact of services like EcoCash on gender disparities is crucial amid economic shifts, policy changes, and unforeseen events in countries with weak social infrastructure like Zimbabwe. 

A Blueprint for Change

"In Africa, they say if you teach a woman you have taught the village. That is how we view women being involved in financial inclusion." General Manager of Econet EcoSure Godwin Mashiri's words echo in the ongoing tale of uniting fintech and female empowerment EcoCash is only one chapter in this ongoing saga, with technology set to open previously closed doors. By embracing the principles of Ubuntu within fintech, including interconnectedness, shared prosperity, and community support, we can shape a financial ecosystem that empowers women, narrows economic disparities, and contributes to a more equitable society. This journey demands continuous research, collaboration, and a critical examination of our past, present, and future to harness technology's transformative potential for the benefit of all.