There has been a lot of discussion about financial inclusion in Tanzania and the considerable progress that has been made over the last decade. New thinking and technological innovation has brought about a wide range of new products and services that are accessible via mobile phones from anywhere in the country, resulting in a fourfold increase in the numbers of people accessing formal financial services.
But where do women stand in this new era of improved financial inclusion? Women make up over 50% of the population and workforce in Tanzania and own over half (54%) of the country’s micro and small enterprises, but their contribution in economic activity, growth and financial well-being is far below their potential. In Tanzania, where many households face the challenges of financial instability, the role of women in sustaining household resilience, improving their families’ prosperity and driving economic growth cannot be overemphasised.
Over the past decade, there has been great progress in improving financial inclusion, and in Tanzania, there has considerable rise in the proportion of the adult population using financial services from 44% in 2009 to 65% in 2017, as reported by FinScope Tanzania. However, like in many developing countries across the world, there is still a gender gap of 10% between men and women accessing formal financial services.
Financial services offer the means for women to take control of their own finances by making and receiving payments using digital financial services, investing in business operations and building a credit history through savings accounts, managing risks through credit services and protecting their family and businesses through appropriate insurance products.
Demographics for women in Tanzania
Taking the demographic data as a whole, it is clear that women face considerable challenges in accessing financial services due to their lack of literacy and numeracy and, despite their business activity, they face a wide range of social, cultural and economic challenges in accessing financial services. As digital financial services have made such an impact on the rise in financial inclusion, 40% of women are being excluded as they perceive mobile phones to be too expensive.
Women's financial product and service usage
Women mainly use their income on household goods such as investing in their children’s education, nutrition and health, and, although they are able to cope with such responsibilities by using appropriate cash flow management tools, FinScope Tanzania 2017 shows that less than half of women (43%) in Tanzania have saved or borrowed in the past 12 months.
FinScope Tanzania 2017
The figure above shows the significant gender gap in the uptake of financial services by women. The gap is highest in the uptake of mobile money and banking services. Furthermore, the graph indicates that women are more likely to participate in savings groups than men.
Women are more likely to borrow and save for cash flow smoothing purposes and less for investment in productivity and asset building. The majority of women save at home (47%) or in savings groups (25%) and predominantly borrow from family/friends (63%) and savings groups (25%). In most cases, they receive money and make payments in cash, however 5% of women receive the money they spend through mobile money, which are mainly linked to domestic remittances.
Broader challenges facing women
Women face a complex mix of challenges in their day-to-day life at both household and community level as well as in major economic activities. Although some of these challenges might not have a direct link to women failing to derive value from the usage of financial services, they, in one way or another, play a major role in holding back women from optimizing their capabilities and opportunities. Addressing such challenges might result in a higher involvement of women in economic activities and, as a result of that, in the financial sector.
In order to unpack the problem statement, a list of specific barriers towards women taking up financial services and deriving value from using them is outlined below;
Financial service provision for women
All formal financial service providers require their customers to have a recognised form of identification. FinScope Tanzania 2017 found out that majority (84%) of Tanzanians have the voter’s card and there was no significant difference in the ownership of the voter’s ID among men and women.
Furthermore, asset ownership is key to accessing both long and short-term credit from a majority of financial service providers and a requirement for many financial services under Know-Your-Customer regulations. In order to assess whether Tanzanian women own assets and have a proof of ownership of those assets, FinScope Tanzania 2017 found out that only 28% of women claim to personally own land, while land ownership for men is at 47%. Further to that, only 2 out of 10 women who personally own land claim to have proof of ownership.
Constraints on Strategies to improve women’s financial inclusion
FSDT Women’s Strategy, 2018
The constraints facing women, service providers and policy makers to include women in the financial sector are complex and deep-rooted. The government of Tanzania has been working to address them through the National Financial Inclusion Framework and has set a target to increase the proportion of women with financial access from 63% to 71% by 2022. The framework, based on evidence from studies and reports, adopts a holistic approach to address challenges and barriers from the demand and supply sides and within the legal and regulatory environment to encourage new appropriate and affordable solutions to enter the market and to build women’s capacity to understand and derive value from financial services and products.
For further information:
Financial Sector Deepening Trust
2nd Floor “De Ocean Plaza”
Plot 400 Toure Drive Oysterbay
Dar es Salaam, Tanzania