Women in Fintech: Leading the Charge for Financial Inclusion in Africa.

As defined by the World Bank, financial inclusion is the enabling of individuals and businesses to access useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit, and insurance – delivered responsibly and sustainably. In Sub-Saharan Africa, mobile money is one of the biggest drivers of financial inclusion, particularly for women. It has achieved this feat by enabling simple account opening which then facilitates  mobile payments, savings, and borrowing. In 2020, mobile money transactions in Africa were valued at $490bn.

In 2021, this figure increased significantly to over $700bn, accounting for 70% of mobile money transactions worldwide. In 2022, the value of mobile money transactions in Sub-Saharan Africa alone was $832bn, making the region far and away its biggest adopter globally. Despite these achievements, there are still hurdles to be overcome to ensure that more people are financially included. While the percentage of adult Nigerians considered financially included — including those with bank accounts, insurance, and mobile money — rose from 56% in 2020 to 64% in 2023, it still falls short of the 95% target set by the Central Bank of Nigeria. It is estimated that only about 52% of Nigerians own a bank account.

According to the 2021 World Bank Global Findex Report, “one-third of the mobile money account holders in Sub-Saharan Africa say they could not use their mobile money account without help from a family member or an agent.” It also disclosed that women are “five percentage points more likely than men to need help using their mobile money account.” The report highlighted other significant barriers, including financial illiteracy, poor product design which denies accessibility, and unexpected transaction fees. 

Leading the Charge

In recent years, there have been some positives with African women in tech leading the charge to drive financial inclusion in Africa by creating solutions. Odunayo Eweniyi is the Chief Operating Officer (COO) and Co-founder of the popular online savings platform in Nigeria-, Piggyvest. Piggyvest has made huge strides since it launched eight years ago. The platform boasts nearly five million users in Nigeria. Between 2016 and 2023, it paid ₦1.1 trillion to its customers. Last year, the company released a savings report that shed insights into the spending habits of Nigerians. 

Eweniyi recognizes there’s still a long way to go in driving financial inclusion and has said that collaboration between the public and private sectors is critical in realising this goal. During a roundtable held in February, she said, “the scale of the work is massive; I don’t know how we’re going to do it, but collaboration is the first point to getting started.”

Beyond collaboration, other female fintech industry veterans have cited literacy as a big hindrance to financial inclusion. In an industry that keeps growing daily, customers and potential customers are not always up to speed on the options and products available to them. Solutions may abound but if the demographic that needs these solutions the most is unaware of how to access or use these products, they will remain financially excluded.  According to industry veteran and digital payment strategist, Chinwe Uzoho “vulnerability and lack of knowledge/understanding of the consumers of these financial products, lead them to make poorly informed decisions about these products. This can lead to them falling prey to scams, unscrupulous lenders, or making poor financial decisions that cost them more in the long run“, she says. Uzoho has decades of experience in  retail banking and fintech product innovation. As Group Head, Retail Banking at Access Bank, she managed a team of  22 regional managers across 83 branches and implemented product strategies that successfully penetrated Africa’s financial markets. 

Ebehijie Momoh, Board Advisor of ByDee Solutions and Area Head, West Africa for Mastercard shares the same opinions as Uzoho. Drawing from her experience leading retail banking in west Africa for prestigious international banking groups, she agrees that financial literacy is one of the biggest challenges to inclusion stating that “people just don’t know how to access what is already available!” She recommends creating awareness and deliberate effort at financial training, to improve inclusion. 

Uzoho, on the other hand, recommends that the fintech industry must also be deliberate about consumer protection and product education.  “The only way to ensure that the end users have confidence in the products and services is to promote self-assurance in the use of the digital services, through adequate training and full disclosure of the key product information. This will enable the consumers to make informed decisions and select the products that are appropriate to their needs.”   

Uzoho also recommends tailoring solutions to meet specific demographics in the local market.  While creating financial solutions and products, there is also a one-size-fits-all approach that sometimes becomes a challenge in some demographics. Financial needs and resources vary greatly, while some countries boast high tech adoption, others struggle with basic infrastructure.  A mobile banking app might be useless in an area with unreliable internet and USSD may be more appropriate. “It is important to understand the market/ different demographic groups, such as students, young adults, adults, etc, and come up with a segmentation approach that will help for ease of acceptance and empowerment of financial knowledge and products/services. This should include knowledge from the basics to more advanced concepts, so that they can make better informed financial decisions that will ultimately improve their lives and general well- being.” Uzoho states. 

Yinka Edu of Udo Udoma & Belo-Osagie, a leading law firm that works with fintechs, Telcos and financial institutions,  echoes the same sentiment on financial literacy and as well as the need for local solutions built for the African market. In her view, there is the institutional exclusion that stems from a lack of IDs which is a big obstacle to financial inclusion. Financial institutions are legally obligated to know their customers (KYC) but the irony is that those who often lack formal ID are the ones who could benefit most from financial services. According to Edu, “in particular, I see identity as being critical.  With the know-your-customer mandates, and the risks associated with working with people not properly known, a lack of formal evidence of identity excludes people from access to financial services and possibly even government services.” she says. She calls for the improvement of identity systems to tackle financial exclusion and recommends home-grown solutions, “Just as we have started getting comfortable with alternative credit scoring methods, we need to look closely at alternative ways of verifying identity, addresses etc. just as India came up with its own system, this requires a home grown solution.” 

Impediments to women’s impact

It is clear from the examples above that African women in the fintech industry are shaping the financial landscape while  advocating for financial inclusion. These women are leaders in the industry driving business growth while also building  financial products and services that cater to the specific needs of underserved segments, particularly women. Despite the contributions of these phenomenal women (and many more), women still face hurdles. 

For years the commonly cited challenges faced by  women in the fintech industry are, limited access to capital and gender bias. These problems are not unique to just women in the financial industry but women in the corporate world all over. In a 2023 report, of over 2,000 African startups surveyed, only 14% of them had at least one female co-founder, and 10% had a woman CEO.  According to the report by The Big Deal in 2023, 85% of all startup funding was raised by a solo male founder or a founding team with at least one man. This means that only 15% of the funding was raised by a solo female founder or a founding team with at least a woman. 

This large disparity in funding makes it tough for female-led fintech companies and their solutions to proliferate in the industry. To tackle the problems of financial inclusion, a multi-pronged and gender-balanced approach is needed.  Increasing female representation in the fintech industry fosters innovation. Diverse teams bring a wider range of perspectives to the table, leading to more creative solutions for reaching the unbanked populations. Women can leverage their understanding of digital technology, years of industry experience, and unique innovative ideas to develop financial services that are convenient and user-friendly, especially for those in rural areas with limited access to traditional banking infrastructure.

Also, noting that women are more financially excluded than men, women are often better equipped to build trust with other women.  Social and cultural norms can sometimes create barriers for women seeking financial services from male representatives. Female financial industry leaders can bridge this gap by creating a more welcoming and comfortable environment for women to engage with the financial systems and solutions tailored to women specifically.

In conclusion, while recognizing the critical role women play in financial inclusion, we must acknowledge the existing hurdles. Overcoming these hurdles, including the scarcity of access to funding and networking opportunities for women in fintech, is crucial for the industry's ability to achieve financial inclusion for all Africans. Women are not simply valuable contributors  to the fintech industry; they are key players in achieving financial inclusion for all Africans. Initiatives that provide financial support and business guidance specifically for women-led fintech ventures are crucial.  By increasing women's participation, we can unlock their unique perspectives and skillsets, paving the way for a more inclusive and prosperous future for the continent.