Why Are DFS Important for Women

According to the FinScope (2020) Survey findings, the increase or growth in the Zambian financial inclusion is mainly attributed to increased uptake of mobile money which registered an increase from 14% in 2015 to 58.5% by 2020.

A critical look at the factors of financial inclusion reveals why each of them is necessary.

Payments: Financial inclusion starts with payments. They serve as a gateway to other financial services. Mobile money payments in Zambia have grown to an annual average of 126% in value, from K2.07 billion in 2015 to K452.0 billion in 2023.

Savings: Savings are also an important aspect of financial inclusion. The emergence of mobile money banking services has been seen as a blessing to many low-income earners in Zambia. Mobile money electronic accounts offer the safe storage of cash, though without the payment of interest.

Credit: Improving credit access in Zambia is key to not only increasing formal financial inclusion but also to growing and developing Zambia’s ever-changing economy. Digital credit has become quite popular for women and all other customers on mobile money platforms.

Insurance: Insurance is one of four pillars of financial inclusion. Insurance products can make a significant positive difference in the lives of vulnerable individuals by helping households mitigate shocks and improve the management of expenses related to unforeseen events.

All the above financial products give women basic tools they need to prosper in the economy. Without them, women can struggle to start businesses, save to match earnings to their cost payments over time, invest in the future, and provide for their families.

Having better access to and use of a range of financial services also contributes to women’s autonomy, allowing for better use of their personal and household resources, and reducing the vulnerability of their households and businesses.

The plan to achieve greater women’s financial inclusion is dependent upon the creation of a more gender inclusive financial system that addresses the specific demand and supply barriers faced by women, supported by an inclusive regulatory environment.

Access to financial services is a prerequisite for uptake and usage of services. The three most important barriers are access to cell phones, digital financial literacy, and KYC requirements.

According to research including FinScope 2020, about 40% of women do not have cell phone access. Low levels of financial literacy among women discourage even owners of mobile phones to utilise them for different types of transactions. Many women do not have the formal identification documents to meet the requirements for Know Your Customer (KYC).

Once these barriers of cell phone access, digital literacy, and identity are addressed, the issue of the right financial product to attract women becomes more immediate. Many financial services providers do not work out client-centric product development specifically targeted at women’s unique needs.