What makes this story very sobering, however, is that the story of women’s financial inclusion in Uganda is still largely an informal one
By Rashmi Pillai
On March 8, the world celebrated International Women’s Day. The theme for 2019 is Balance for Better – a recognition of the fact that a gender-balanced world, is in fact a better world. But a balanced world is only possible through deliberate and consistent, collective action.
Active participation of women who constitute 50% of the labour force has well documented macroeconomic gains. Similarly, multiple studies have found that having more women on corporate boards or decision-making positions improves overall organisational effectiveness and growth. Women in the labour force are also twice as likely than men to contribute to family.
Educated women tend to make better health, education and financial decisions for their children and families, ensuring better overall outcomes at a household, community and country level. Therefore, countries and communities that are actively taking collective action to empower women and girls are investing in and securing both their present and future.
Of the global Sustainable Development Goals (SDGs), goal-5 targets gender equality and the empowerment of all women and girls by 2030 – a short 11 years from today. At Financial Sector Deepening Uganda, we are committed to making this vision a reality. The financial inclusion of women and making finance work for women’s empowerment is core to our mission.
In terms of overall financial inclusion, the Finscope 2018 study reveals a minimal gender gap when it comes to overall financial inclusion -- 78% of adult Ugandan men are included in contrast to only 77% adult women.
However, adult men (63%) are more likely to be formally included than adult women (54%), portraying a stubborn nine percentage-point gender difference, that has remained unmoved globally for the past couple of years in formal financial inclusion.
Here is what makes this statistic very interesting for Uganda. Since Uganda has more adult women (54%) than adult men (46%), in terms of absolute numbers, there are more women (5.42 million) who are using formal financial services than men (5.39 million).
What makes this story very sobering, however, is that the story of women’s financial inclusion in Uganda is still largely an informal one. Women are 1.8 times more likely to access informal financial services via their village savings groups and co-operatives than formal services. In fact, 23% of adult women use informal services in comparison to only 15% of adult men (Finscope 2018).
More women than men actively save, borrow and insure using informal services. Statistics reveal that income is a big determinant of whether women will adopt formal financial services. Two out of five financially excluded women are unemployed; while only one in five excluded men are unemployed.
Narrowing the formal financial inclusion gender gap, therefore, requires narrowing the unemployment gender gap. However, the participation of women in income generating activities is not a mere question of job opportunities – it is also a question of social and cultural norms.
Women do 2.6 times more unpaid care and domestic work than men – a socially accepted and well-practiced norm (UN Women). This has a direct impact on the choice’s women make – from whether to participate in an economic activity to what type of economic activity to participate in, to how many hours they can or are willing to work.
Another discriminatory socio-cultural norm is property ownership. Women are less likely to own land, property or other types of collateral in their name than men – reducing their access to credit. Reduced ability to raise capital can predetermine the businesses women choose to enter, invariably impacting their net take-home incomes.
To our credit, there are some global barriers to women’s financial inclusion that Uganda has overcome. A key being identification. Over 84% of adult Ugandans have a valid document to prove their identification in comparison to 85% of adult Ugandan men and increasing.
Primary school literacy is also nearly on par– 57% of male adults have a primary school education in contrast to 54% adult women. The literacy gap, however, gets pronounced on secondary education. One in four adult male Ugandans have undergone secondary education, while less than a fifth of adult women have secondary education.
Technology is a common barrier that women face globally and Uganda is no exception here. Mobile phone ownership is another factor that is less spoken about with respect to women’s financial inclusion. Only 46% of Ugandan women own mobile phones in comparison to 58% of adult men.
The lack of phone ownership limits how women participate in the adoption of advanced digital financial services – beyond just payments. Proactive policy and private sector models that incentivise women to own phones is key to preventing a gender-based digital divide.
At FSDU we have realised that the first step towards closing the gender gap in financial inclusion, is to close the gender-data gap. Collecting sex-disaggregated data tells us about the different barriers’ women face versus men; it also tells us about women’s preferences and how they engage with financial products and services and where the pain points to adoption lie.
Data allows for evidence-based programmatic investment, informed allocation of public and private funds, and the formation of strategic partnerships that further a more inclusive society. Over the next couple of years, FSDU through her partners will work towards reducing the 9-percentage point gender gap in formal financial services while continuing to deepen the usage of formal and informal financial services among women.
Writer is the Acting Executive Director, FSDU