The past two years have shown us that challenges in the financial inclusion gender gap exacerbated by the COVID-19 pandemic need to be closed for women to have equal access to finance as men. The World Bank reports indicate that COVID-19's economic repercussions disproportionately affect women. Women-led businesses have experienced more of a decline in income opportunities than male-led businesses and jobs.
There is a wide array of challenges women faced during the pandemic. However, the pandemic has presented a window of opportunity to re-set and address enduring and stubborn gender inequities and hasten the process toward equality for a remarkable economic recovery. Our ongoing research on the Women's Leadership for Financial Inclusion (WLFI) and Economic Recovery reveals the need for women to acquire relevant skills to negotiate these challenges, take advantage of technological advancement, and equip women with digital skills.
To advocate for women's financial inclusion and ensure that policies are put in place to close the gender financing gap in public and private sectors, New Faces New Voices (NFNV) Zimbabwe convened a National Roundtable on August 11, 2022, in Harare. The roundtable aimed to engage stakeholders on women's financial inclusion pillars of the National Financial Inclusion Strategy phase II and share evidence of women's financial inclusion status in the country.
The Chairperson of NFNV, Dr. Lucia Mandengenda, shared the role of NFNV Zimbabwe in the national financial inclusion discourse. As a convener and advocate for financial inclusion, the country chapter has collaborated with the Reserve Bank of Zimbabwe on the National Financial Inclusion Strategy (NFIS) Phase I and will continue for the second phase.
"NFNV Zimbabwe has seen gains and economic benefits from closing the gender financing gap. Evidence from the latest Global Findex report shows that the gender gap had narrowed from 9% to 6%. However, some parts of Southern Africa remain with a wider gender gap due to women having lower access to smartphones and internet connectivity, affecting their access to digital financial services, whose usage had been accelerated by the COVID-19 pandemic" - Dr. Lucia Mandengenda.
The complexities of gender inequality do not require a one-size-fits-all solution. Given that ideal policy strategies differ in different contexts based on the pace of economic development, the size of the gender gap, and other factors, we pulled perspectives from various stakeholders to pinpoint areas for policy recommendations and policy actions. The Graca Machel Trust's Director of Programs, Ms Shiphra Chisha, highlighted the critical role the Trust is playing in interventions toward women's economic empowerment is vital for the progress of the Africa Union's Agenda 2063 and the United Nation's Sustainable Development Goals. "Women's financial inclusion should spur inclusive development and impact positively on families and societies," she said.
"The importance of evidence-based interventions, understanding the entire ecosystem and engagement and collaboration among stakeholders. Approach women's financial inclusion needs to consider its multi-layered nature beyond just access to enable women to smoothen consumption, mitigate risks, self-employ, grow their assets and create wealth. Without access to financial services, women will be marginalized and unable to fully engage in productive economic sectors" - Ms Shiphra Chisha.
What can work to close the gender financing gap
Finmark Trust (FMT) has been a subject matter expert and collaborating partner in financial inclusion, fighting poverty and inequality in the SADC region to make financial markets work for the poor" by promoting financial inclusion and regional financial integration. Drawing from the FMT FinScope Survey data that provides credible indicators for policy formulation and monitoring and evaluation of financial inclusion targets, the Country Coordinator for FMT, Blessing Mautsa, demonstrated broad areas that can be used to support expanding access, usage, and quality of financial services for individuals and small businesses through the provision of credible data:
- Measure levels of financial inclusion for both consumers and small business owners.
- Describe the access landscape - types of products and services used by individuals and small business owners.
- Identify the drivers of, and barriers to the usage of financial products and services
- Assess the size and scope of micro, small, and medium enterprises (MSMEs) in Zimbabwe.
- Identify the most binding constraints to MSMEs'
- development and growth with a focus on access to financial markets
- Segment the MSME sector into market segments and identify the needs of different segments to stimulate related product innovation
- Stimulate evidence-based dialogue that will ultimately lead to effective public and private sector interventions that will deepen financial inclusion
- Assess whether the current financial policy and regulatory environment create a conducive environment for financial inclusion.
- Assist Government in making regional and international benchmarking against other countries in the region.
Policy responses for women's financial inclusion
The Director in the Ministry of Women Affairs, Community, Small and Medium Enterprises Development, Mrs. Julia Mapungwana, shared barriers, constraints policy response, and some strategies that need to be considered for women's financial inclusion and strategies for broad-based women's economic Empowerment.
Barriers and Constraints to Women's Financial Inclusion
- Lack of acceptable collateral: women lack acceptable collateral security, such as immovable property, required by most financial institutions, which is further compounded by traditional property rights, which are skewed against women, particularly in rural areas.
- Low literacy and formal education levels: Lower financial literacy rates among women make it difficult for them to navigate the loan market.
- Lack of information on financial products: Due to lack of information, women usually access funds from informal sources such as loan sharks, unregistered savings and credit schemes, friends, relatives, and suppliers, which is usually costly and inadequate.
- Unequal gender division of labour in unpaid productive and reproductive activities: such as household chores, leaving very little time to devote to the business, which further curtails their potential to grow the business out of the subsistence level.
- Discrimination and Stereotyping: Women have also faced discrimination and gender stereotypes regarding access to financial resources.
Policy Responses for Women's Financial Inclusion
Zimbabwe Constitution - Section 17 of the Zimbabwe Constitution explicitly provides gender balance, whilst section 56 provides for equality between men and women and non-discrimination in access to resources and participation of women in all spheres of life. The National Gender Policy and the Broad-Based Women Economic Empowerment Framework provide a guiding framework for mainstreaming gender in all sectors of the economy. Strategies under the policy include;
- Developing and implementing equal access to entrepreneurial opportunities and equity in business ownership in critical economic sectors.
- Developing and implementing affirmative action initiatives to enhance business skills and competencies and access to finance, land, and other productive resources and technologies.
- Developing mechanisms to improve the performance of MSMEs and putting measures to support young women in business.
- Enhancing Women's Business Ownership or Entrepreneurship; Facilitating the Participation of Women in key Economic Decision-Making Positions and ensuring Employment Equity.
- Assisting women from disadvantaged backgrounds to participate and benefit from viable informal and formal economic activities to enhance their livelihoods.
- The achievement of BBWEE will be measured against four primary outcomes, which include (i) the extent to which women own businesses; (ii) the percentage of women in formal or gainful employment; (iii) the level of women's participation in economic decision-making processes and appointment to key decision-making positions; and (iv) the extent to which women from disadvantaged backgrounds are operating viable livelihoods economic activities.
Strategies for Broad Based Women's Economic Empowerment
- MSMEs Development: Ministry is mainstreaming women's participation in all MSME development programmes, including access to finance and financial literacy.
- Stimulus Package for MSMEs and Women: Treasury disbursed ZWL 50 million stimulus packages in 2020 through Zimbabwe Women Microfinance Bank (ZWMB) and Small and Medium Enterprises Development Corporation (SMEDCO) to bail out MSMEs and women affected by the COVID-19 pandemic.
- Zimbabwe National Financial Inclusion Strategy: The Women and Finance Development thematic working group was constituted with a core mandate to promote and develop innovative financial products for women and facilitate capacity-building programs for women to complement access to financial service
- Establish a Women's desk and SMEs Unit in Banks: Banking institutions have established women's desks and SME units to develop tailored products and services for women and SMEs. A minimum of thirteen (13) banks have established SME units, and 11 banks have established women's desks.
Key outcomes and policy recommendations from the discussion panel
Reflections from financial services providers, microfinance institutions, executives from professional women organizations, women in business networks, women in mining, and heads of credit institutions;
- There is a need to close the gap between policies and their implementation. A case in point is collateral issues raised by bank representatives at the roundtable to have an alignment of regulation on collateral and low-collateral loans that financial service providers are issuing to target groups.
- Ministry to push for timeous disbursement of funds for women's funding to state banks
- All women's financial ecosystem stakeholders must partner and approach issues collaboratively to aggregate efforts. The ministry and central bank are at the centre of these interventions to ensure the linkages and collaboration among stakeholders.
- Financial institutions should use the evidence-based research from the Finscope Surveys in their approach to designing and delivering products for women, following suit on how national financial inclusion targets are set by the central bank.
- Policies should speak to the digital world that has been accelerated by COVID-19.
- In addition to financial literacy, legal literacy is required to help women with formalisation, meet statutory compliance and run businesses beyond sole trader ownership that is prevalent among women-led enterprises.
New Faces New Voices (NFNV) was conceived in 2009 as the business and finance pillar of Multiplying Faces Amplifying Voices, an initiative founded by Graça Machel to give African women a platform to influence change across different sectors. It focuses on expanding the role and influence of women in the financial sector. Read more here