By MUHIDIN SHIFA

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By BEZAWIT FANTU

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From time immemorial, rural women in Ethiopia have believed banks located in urban centres and cities are for the rich people with higher incomes but times are changing as women now use their mobile phones to access banking services.

A week-long survey conducted last August has found that widespread phone ownership portends a good opportunity for financial providers to roll out digital financial services (DFS) enabling rural women to understand how banks operate and which banking products are beneficial to them. 

“Promoting DFS as a quick way to make financial transactions will be attractive to women. All the respondents interviewed from the eight banks, one microfinance institution and a public non-bank (Fintech) that provides digital financial service (DFS) acknowledge that targeted awareness campaigns for women have attracted more women to open formal accounts using their mobile phones,” says the study.

The survey, conducted as part of the 8QM training with the Fletcher School and the Women’s Digital Financial Inclusion (WDFI) Advocacy Hub, concentrated their interviews within Nefas Silk Lafto sub-city where they engaged low-income Ethiopian women seeking their thoughts about banks and existing disassociation fuelled by lack of stakeholder engagement. 

It observes young educated women now prefer to use DFS as opposed to the traditional physical banks that many find cumbersome, ‘with long processes for carrying out transactions. Mobile-enabled financial services, they say, are highly preferred for their shortened and paperless processes when one is sending and receiving money or paying for goods and services. 

Many observed that banks were located far away from their workplaces and homes raising safety and accessibility concerns. The interviewees also showed lack of awareness of the potential value of these banking services or felt embarrassed to go to a bank branch to deposit small amounts of money. 

The survey suggests that for women’s financial aspirations to be realised, they need to be empowered with financial skills, be informed about financial products and the positive impact the banking products will have on their livelihood as well the reassurance that these products are safe and can be trusted. Limited digital and literacy skills exposes women to misconduct, indebtedness, theft, as well as monetary losses, which hamper their confidence and their ability to actively access and use Digital Financial Services.  

According to CGAP (2022), women across the world are more likely to be victims of fraud and data misuse, which are often fuelled by the negative effects of discriminatory social norms on women’s financial independence and behaviours. 

In the interviews we conducted in Ethiopia, women also highlighted that despite their aspirations to save, they did not feel capable to do so because of their limited financial skills and awareness of the services that are available to them. In 2023, a new study by Girl Effect, will contribute to expand this work by looking at the barriers that young people face to access digital technology and the benefits on every aspect of their lives, including mental well-being.

The pathway for inclusion for one of Africa’s fastest-growing economies

With educated young women reporting the adoption of DFS technologies, Africa’s digital transformation is well underway and a few countries are on a particularly promising trajectory. Ethiopia, being one of them, is embarking on the next stage of digital transformation, the real test will be how quickly and effectively the country can create an environment where women can thrive. 

Scaling up the benefits of digitalisation requires bold, coordinated and inclusive policies that reduce the digital and financial gender divide and promote more opportunities for women, especially in underserved communities.

The new National Financial Inclusion Strategy (NFIS), which was approved in March 2022, is a key achievement which shall boost financial inclusion and ensure women can profit from the growing investments on infrastructure and new regulatory frameworks to educate and safeguard consumers. This strategy elevates the role of gender intentionality, mainstreaming it across all focus areas and action programs to ensure that all products, services, channels, and initiatives are designed with women in mind. In particular, it calls for digital financial literacy interventions to help prevent and mitigate risks by creating awareness and enabling control so that women have more access and increase their usage of formal DFS.

A new multi-stakeholder hub to support implementation 

Implementation is typically considered the responsibility of the government and this is a grave mistake. Identifying and addressing women’s diverse needs requires not only willingness of the government to solicit feedback when developing new policy and regulatory frameworks, but also a proactive business community and civil society prepared to advocate on issues that impact millions of lives. It is up to the business community, civil society, and everyone to work with policy makers on making the Ethiopian digital economy a reality and, most importantly, an opportunity for all. Without multi-sectoral engagement and support across the board, the transformative impact promised by those national initiatives will be constricted. 

 To successfully harness digital technologies for advancing women’s financial inclusion, while mitigating the downside risks associated with these new technologies, three aspects emerge as essential pre-conditions; first, they should start with implementing the right policy and regulatory frameworks that foster innovative, accessible and customer-centric digital financial services and products followed by regular and informed engagement between stakeholders from all sectors of society, including policymakers, regulators, the private sector and civil society.

Lastly, multi-stakeholder advocacy strategies should be co-created with women to ensure their needs are at the forefront of policy and market solutions.

The National Bank of Ethiopia (NBE) is committed to integrate these three aspects in the implementation of the NFIS by creating an inclusive and participative approach open to key actors from all sectors of society. In collaboration with UNCDF, NBE will leverage the Women’s Digital Financial Inclusion (WDFI) Advocacy Hub as a channel to engage such diverse stakeholders in implementing key components of the strategy, especially those aimed at reaching women. 

In turn, as a member of the WDFI Advocacy Hub, Girl Effect will support women to access DFS by developing insights and leveraging the stories of young early adopters to inspire and encourage others. Understanding women’s and girls’ realities and lived experiences is central to inform collaborative action and drive impactful and inclusive solutions.

With a unified focus on advocacy, collective actions can create an environment where women can make an informed choice on their financial future and lift up their communities and national economies. In 2023, UNCDF will continue to support the WDFI Ethiopia Coalition by facilitating access to training and insights, and channeling financial resources to support the implementation of innovative practical solutions. 

 This is a call to action to those who want to be agents of change in the digital journey of their own country. Join the conversation, join the Coalition, join the movement to accelerate women’s digital financial inclusion #ItsHerEconomyToo.

Muhidin Shifa is Principal Financial Inclusion, Financial Consumer Protection and Financial Education Coordinator at the National Bank of Ethiopia. Bezawit Fantu is Gender Manager at Girl Effect, explore the pathways for women’s digital financial inclusion in Ethiopia.