Building Women-Focused Finance

#bwffconf

Building Women-Focused Finance: The Global-Local ExperienceLisa Peterlechner

GIZ

#bwffconf

Building Women-Focused Finance

#bwffconf1- Usage of financial services by rural women in Uganda

• Relatively low access to financial services:– Only 28% of Ugandans have access to formal financial services

• Rural areas disadvantaged compared to urban areas:– 38% of urban population use banks, compared to 15% of rural

• Women disadvantaged compared to men:– More men (31%) than women (26%) are formally served – More women (31%) than men (28%) feel financially excluded – Women in rural areas are 6.1% less likely to save than men

Women in rural areas are most disadvantaged

• Study in 8 GIZ partner Savings and Credit Cooperatives (SACCOs):- Women represent less than 30% of board, management and membership- Women who use financial services, often save more and repay better

Building Women-Focused Finance

#bwffconf2- Barriers for rural women

• Gender division of roles at family/ household level– Financial management is the responsibility of men– Women focus on production, men focus on marketing -> women have less income– Women work more hours a day and most of it from home

• Male domination and spousal interference– “It is better to have a wife who is illiterate and poor but manageable than one who is educated

and rich but difficult to manage”– Women are not allowed to open accounts or if they are, men control the accounts

• Women’s lack of property rights – Land is the number one asset in rural areas, women own only 7% of registered land

• Lack in education, low self-esteem– Perception that financial services are for the well educated and well-off– Idea that SACCOs / MFIs = loans = dangerous: “One woman failed to pay and they came and

took her baby’s bed sheets”.• Financial products, policies and procedures which do not take account of women

specific needs and challenges– “Women contribute a lot of income to the household but they are denied loans, because they

are regarded to be inferior and they do not have collateral.”– High entrance cost: relative to their income, the costs of opening an account equals 15% of

women’s monthly income, whereas it is only 8% for men.– Focus on business loans, whereas women have more diversified needs (education, health, a

variety of savings products, etc.)

Building Women-Focused Finance

#bwffconf

SACCO

Community

Training of savings groups

Media campaign

Support in comm. strategy

Gender training

Gender auditSACCO leaders are

sensitized on Gender

SACCO has and applies a Gender policy

Men are sensitized on

the benefits of women joining SACCOs; more

women are willing and able to join a SACCO

Men and women are targeted in mobilization

campaigns

Incr

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d fe

mal

e pa

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patio

n in

SAC

COs

GIZ

FSD

Gen

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trat

egy

for S

ACCO

s2 – A holistic approach to increasing female participation

Gender sensitive product dev.

SACCO products are adapted to the needs of

men and women

Female leadership training

Women contribute more and better

Building Women-Focused Finance

#bwffconf

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3 – Focus on linkage bankingLinkage banking: Combining the convenience of informal financial services with the safety

and opportunities of formal financial services

The clients’ side:• Benefits of informal groups:

– Focus on saving, small transactions, no fees involved, groups are close by (responding to Gender division of roles at family/ household level)

– Social supervision, no need for collateral (responding to women’s lack of property rights)– Saving and lending with peers, in a modest setting, with simple and transparent procedures

(responding to lack in education, low self-esteem)– Participation in groups usually meets more acceptance with spouse (responding to male domination

and spousal interference)• Benefits of formal financial services:

– Savings need to be safe– Need for bigger loans, for more diversified financial services usually arises after some time

Benefits for financial institutions:– Access to a new client segment which is otherwise difficult to reach– Low transaction costs– Usually high savings– Qualified clients with a track record in saving and borrowing

Building Women-Focused Finance

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Thank you for your attention