I met Mary (not her real name), a mother of five from Bong County, Liberia, last November. She joined BRAC in 2020, taking her first loan of LRD 25,000 (USD 130) to stock her small provision shop.
Mary shared the struggles she faced trying to access finance--she lacked the necessary collateral and couldn't understand the paperwork required to apply for a bank loan. As a result, she often had to rely on borrowing from friends and family or taking high-interest loans from
local money lenders.
Since 2020, Mary has taken loans from BRAC every year to expand her shop and now has a loan of LRD 96,401 (USD 500). Her business is thriving, and all her children are attending school.
Mary's story is a positive one, but it also highlights the larger issue of financial inclusion in
Liberia.
According to the Global Findex Database 2021, nearly three out of four adults in Liberia don't have an account at a financial institution. Additionally, Liberian women are less likely to have an account compared to men. What role can the development and financial sectors play in changing this and bringing more women under the umbrella of financial inclusion? Why is financial inclusion important?
Numerous studies show that financial services are essential for people living in poverty and are an important instrument for development. Access to financial services helps individuals to start and sustain businesses, plan for long-term goals, build assets, and manage unexpected emergencies.
Access to responsible financial services boosts women's economic empowerment. When women have access to financial resources and services, they invest in their children's education, in livelihoods that increase their income and savings, accelerating social progress and economic growth.
They create jobs for other women. Collectively, they have the potential to help lift entire countries out of poverty.
Over the past five years, BRAC Liberia Microfinance Company Ltd has been conducting annual impact surveys with 60 Decibels, using the Lean Data SM methodology, to measure outcomes in
our clients' lives.
In 2023, our Lean Data surveys showed that 97% of clients said they earned more and their quality of life had improved after engaging with BRAC. 91% of surveyed clients said they got their first loan through BRAC, which shows we are fulfilling a critical need. The top things they reported were improved ability to afford education for their children, pay household bills, and increased income and business investment.
All the clients we surveyed were women.
BRAC's financial services are designed keeping the needs and requirements of women in mind.
Our group-based, collateral free microloans are exclusively designed for women, empowering them to build financial resilience and achieve economic empowerment. As of September 2024, BRAC served nearly 97,000 clients, 97% of whom are women. Of these clients, 76% earn LRD1061 (USD 5.5) per day. In 2023, we launched a financial literacy training programme with support from the MasterCard Foundation, and so far, we have trained more than 10,000 women.
This new initiative aims to provide women clients with the necessary knowledge and skills to better manage their finances.
When we invest in women, we invest in a better world.
When women like Mary access financial services, there is a ripple effect which goes beyond the individual, with impacts felt throughout the community. Her story underscores the urgent need to widen the scope of financial inclusion, especially in rural and hard-to-reach areas of the country.
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On the occasion of Financial Inclusion Week 2024, I advocate for supportive policies and regulations that would allow microfinance institutions to expand our reach and be sustainable at the same time.
Investors and donors play a crucial role in supporting microfinance institutions and can deploy their significant funding more effectively by prioritizing impact-driven institutions that serve the last mile.
Let us continue to work together to build a financial sector that fosters inclusivity and growth, reaching more young women and ensuring they too benefit from these opportunities. And let's not forget the women and micro entrepreneurs, who represent a large part of the population and play a vital role in driving national progress--let us ensure they are not left behind.
