Driving financial inclusion


…how SmartPhone, Smart Business is leading the way for women-led micro enterprises

There is a growing body of empirical literature that continues to confirm economically empowering women is the singlemost important driver of wider national and regional development. This has not always been the case.

The uneven distribution of resources globally, coupled with similarly unequal power dynamics, has ensured and perpetuated economic inequality across different demographics. This is most evident with women, especially those from low- and middle-income countries (LMICs). In some of these regions, inequality born from cultural perceptions has been canonised in domestic laws which restrict women’s economic rights.

It must be admitted that progress has been made, in no small part due to the Sustainable Development Goal Five (SDG 5) – Achieve gender equality and empower all women and girls.

We see it as more girls enrolling and going to school, fewer girls being forced into early marriage, more women in corporate and political leadership positions, improved access to healthcare for women, and laws being reformed to advance gender equality among other developments.

While there is a danger of ascribing too much to the recent pandemic, there is no denying that it has changed the world as we know it; and in some instances, for the worse. For example, the World Economic Forum estimates that as a result of the pandemic, full gender parity will not be realised for at least another 136 years – up from 99 years pre-pandemic.

Already, pre-pandemic women generally had less access to financial services than men in many parts of the world, especially in developing nations. The United Nations Conference on Trade and Development suggests that in 2017, for instance, 65 percent of women worldwide had a financial account compared with 72 percent of men; that is, nearly a billion women were without formal financial accounts.

Furthermore, the World Bank in its ‘Women, Business and the Law 2022 report’ released earlier this year showed that: “Around 2.4 billion women of working age are not afforded an equal economic opportunity, and 178 countries maintain legal barriers which prevent their full economic participation”. The rule of thumb remains that reported numbers are usually lower than the actual numbers.

The great leveller – Mobile Phone Technology

But it is not all doom and gloom. The emergence of technology in general, and ‘smart’ mobile phones in particular, has proven a vehicle to propel financial inclusion for women and is a driver of economic parity. Its adoption, coincidentally, has been accelerated exponentially by the advent of COVID-19.

Data from the GSM Association (GSMA) indicate that at the beginning of 2022, Ghana had 44.9 million cellular mobile connections compared to a population of 32 million people; an effective mobile phone penetration rate of 140 percent.

Furthermore, at the start of the year 53 percent of the population were connected to the Internet, and north of 40 percent had mobile money accounts. Interestingly, GSMA suggests that the gender gap between ownership and usage of mobile phones in Ghana is shrinking as more women continue to leverage this technology in various facets of their lives.

SmartPhone, Smart Business

This is most evident in commerce where they are the principal actors in the micro, small and medium-scaled enterprise segment, which makes up more than 80 percent of indigenous businesses.

Despite the evident strides made, the initial upfront cost required to own a mobile phone remains a major constraint for many women owners of micro-enterprises. This is in addition to a dearth of financial literacy skills, which are necessary for the rapidly-evolving financial technology space.

At the pandemic’s peak in 2021, NetHope – a global consortium of nearly 60 global nonprofit organisations  which specialise in improving IT connectivity among humanitarian organisations in developing countries and areas; and Strategic Impact Advisors, a global consulting firm that provides technical assistance to overcome barriers and improve lives through technology and analysis, joined forces to provide subsidised smartphones to women micro-entrepreneurs in Accra and Kumasi under its Smartphone Smart Business Project.

Working with local partners, the women were provided with the devices and a six-month supply of data (1 gigabyte monthly) for six months. The pairing – which had additional financial literacy tools bundled, allowed them to access the Internet; predominantly to promote their businesses through leading platforms such as Facebook and WhatsApp.

The micro entrepreneurs typically advertise their products and also use the phone to communicate with customers and suppliers through phone calls, text messages and social media platforms; as well as conduct mobile money transactions with the goal of expanding their operations.

The capital-intensive project received funding primarily from leading financial services provider Visa Inc., which allowed for feasibility studies and logistics – but most importantly, a 75 percent subsidy on the smart mobile phones for the women.

The Visa Inc. contribution transcended financial support. Its reputation, built on a decades-old solid track record, was key in engagements with the nation’s chief financial industry regulator – the Bank of Ghana (BoG) – as well as with other partners, including mobile service operators like MTN Ghana.

In all, 483 women with an average monthly income of US$43 participated in the project over a six-month period – with 96 percent of those surveyed willing to purchase smartphones at around the GH¢95 mark. That translated to approximately US$15 at the time, or about one-third of their monthly income.

Most importantly, the majority of participants not only reported enhanced financial literacy and a positive return on their investment – as they were able to reach more customers and access a wider range of services – but also gave indications that they would be willing to invest in a data plan to grow their businesses well beyond the programme.

While some barriers remain, the project has shown the eagerness of women business owners to own and use mobile technology to grow their enterprises; and a multi-stakeholder approach will be required to provide them with all the resources they require and shorten that 100 year-plus wait for gender economic parity. This is a rallying call to all.

>>>the writer is Lead for Africa, Strategic Impact Advisors

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