Across the globe, almost a billion women remain financially excluded, while a nine percent gender gap persists in developing countries. Spurred by the COVID-19 pandemic and guided by AFI’s Denarau Action Plan, a digital revolution is paving the way for accelerating growth of African women entrepreneurs and ensuring that no woman is left behind.
Overrepresentation in sectors hardest hit by the economic downturn, pronounced digital gender gap in an increasingly virtual world and mounting pressures of childcare responsibilities – these are only some of the ways that women have been disproportionally impacted by the COVID-19 pandemic, according to the 2020 Mastercard Index of Women Entrepreneurs (MIWE). Nevertheless, the report also pointed out a number of opportunities for women in the COVID-19 era, especially with the exponential growth of e-commerce in Africa.
The inaugural Mastercard MEA SME Confidence Index highlighted that two-thirds of women entrepreneurs in the region encountered no challenges in accepting more payments digitally, especially card payments (45 percent) and mobile payments (41 percent). The women entrepreneurs attributed efficiency of transactions across multiple channels as one of the biggest benefits of going cash-free in their businesses (90 percent). Ninety-four percent of these women entrepreneurs consider social media as a business tool, and 91 percent of them have created a company website.
AFI’s COVID-19 Policy Response Dashboard has played a key role in documenting policy initiatives by member institutions especially for women, youth, micro-, small- and medium enterprises (MSMEs) and other vulnerable segments of the population. The dashboard also facilitates peer learning within the network. Over 100 policy initiatives have been recorded in the dashboard, with almost half of them from the sub-Saharan African region.
Accelerating digitization in Ghana
Ghana was quick to embrace technology during the outbreak of the pandemic, earning it one of 2020 Mastercard Index of Women Entrepreneurs (MIWE)’s top three positions as a leading global economy with the most women business owners.
Aside from COVID-19 relief cash transfers and fee waivers, Bank of Ghana increased transaction limits on digital financial services (DFS) facilitated digital savings, investments, bill payments and online merchant payments. These measures enabled customers to restructure loan repayments and provided credit to those in need.
Six purposeful gender lens considerations have been applied to the development and implementation of this policy. These include:
“The pandemic may have unleashed unprecedented hardship on vulnerable groups such as women (particularly those operating in the informal and MSME sectors), but there are opportunities to rebuild our economies, and while at it, to rebuild them in a manner that leads to more inclusion and resilience,” said Elsie Addo Awadzi, Second Deputy Governor of Bank of Ghana and Chair of AFI’s Gender Inclusive Finance Committee, at AFI’s gender inclusive finance webinar on integrating COVID-19 policy solutions last year. In 2020 alone, there were 17.5 million active mobile accounts in Ghana, representing an 84 percent growth from 2019, the largest growth segment being among women.
Kenya’s mobile money boost
The increase in DFS adoption is also echoed in Kenya with an additional 1.6 million customers utilizing mobile money transactions as a result of the COVID-19 pandemic. Over 80 percent of these transactions were classified as low-value, suggesting that they were applied by communities at the base of the economic pyramid.
In response, the Central Bank of Kenya eliminated transaction charges and increased transaction limits to further help vulnerable households weather the pandemic. The central bank also reduced turnover tax rate from three percent to one percent for all MSMEs, with women owning half of them.
Efforts by the central bank saw the number of digital transactions, which was 1.7 billion from January to November 2019, rose to 4.4 billion over the same period in 2020. This increase reflects a growth of 160.45 percent, with women benefiting significantly from digitalization in the country.
AFI is currently supporting the central bank and other Kenyan stakeholders in the development of a financial inclusion demand-side survey. In partnership with the Mastercard Foundation and targeting over 25,000 households and individuals, the survey has a special interest in gender and age segmentation, and aims to give policymakers insights into specific COVID-19 recovery policies.
Empowering e-commerce in Nigeria
The 2020 Mastercard Index of Women Entrepreneurs (MIWE) identified Nigeria as one of the African countries with significant growth in e-commerce since the pandemic began. Despite socioeconomic challenges, the report revealed strong representation of women entrepreneurs in the country, characterized by a high regard for risk-taking, innovativeness, individuality, and creativeness in entrepreneurship.
To build resilience among MSMEs in the country, the Central Bank of Nigeria announced an addition of NGN50 Billion (USD120 billion) to its Targeted Credit Facility as a stimulus for the sector. This stimulus was further extended to vulnerable households to help them mitigate impacts from the pandemic. The fund was disbursed through the central bank’s minority owned, NIRSAL Microfinance Bank.
The central bank also identified the introduction of mobile telephony in Nigeria, its rapid growth, as well as the adoption and identification of person-to-person payments, as a practical strategy for financial inclusion in the country, especially during the pandemic. In response, the central bank established a framework and guidelines for mobile money services in the country, which has become a driving force for closing the financial inclusion gender gap in Nigeria.
After a roundtable discussion with AFI, the central bank is currently working on a National FinTech Strategy to complement the influence of a fourth industrial revolution and digital economy in Nigeria. The strategy aims to create an enabling regulatory environment and policies that would support FinTech and innovative businesses accelerating financial inclusion in Nigeria.
Advancing women’s financial inclusion
Data from the newly published UN Women and UN Department of Economic and Social Affairs Gender Snapshot 2021, on the progress of the sustainable development goals (SDGs) shows that by 2030, 150 million women and girls could emerge from poverty if governments implement a comprehensive strategy to improve access to education, achieve equal wages and extend social transfers, including financial inclusion initiatives.
AFI’s work in gender inclusive finance (GIF) supports the sustainable development goals, namely SDG1: No poverty, SDG5: Gender Equality, SDG11: Reduced inequalities, SDG8: Decent work and economic growth, as well as SDG17: Partnership for the goals. The GIF workstream is guided by the Denarau Action Plan, the Kigali Statement, AFI’s Statement on Post-COVID-19 Recovery, and AFI’s special report on why the economic response to COVID-19 needs to be financial inclusive and gender sensitive.
In collaboration with the Mastercard Foundation and other AFI partners, AFI enables financial sector regulators in Africa to deliver quick and gender-sensitive policy responses that mitigate the effects of COVID-19 on businesses and individuals, especially for MSMEs, women and youth. Peer learning activities, including webinars supported by the Mastercard Foundation, have not only empowered financial regulators with relevant technical knowledge in addressing gaps in financial inclusion policies, but has also facilitated the creation of a network for sharing continuous advancements in new technologies to enable a digital future where no one is left behind.