Advancing Digital Entrepreneurship and Financial Inclusion for Women in Africa
…bylined by Irene Skrynova, Chief Customer Officer, Unlimint
Entrepreneurship journeys are not always the same for everyone, as they can be influenced by various factors such as their interactions with digital technology, commercial networks, and financial services. These experiences are not immune to gender-based effects either; access to digital tools, commercial resources, and financial literacy can impact the opportunities and challenges that arise as individuals (both men and women), pursue entrepreneurship. In some ways, digital entrepreneurship, as a by-product of fintech solutions, has emerged as a key enabler of financial inclusion for women.
In recent times, there has been a remarkable upsurge in digital entrepreneurship, and women have been leading this trend. This is because it has opened up new business opportunities, leading to increased economic participation by women. With increased access to digital technology and financial services, women are overcoming barriers and developing innovative solutions to tackle societal challenges. The more access they have to digital technology and financial services, the more barriers are being broken down. These digital financial services, including mobile banking, online lending, and crowdfunding platforms, have allowed women to access financing and expand their businesses without facing the conventional obstacles of gender bias and limited networks.
However, despite the significant progress made in recent years, women continue to face significant barriers to accessing digital entrepreneurship opportunities and financial services. These issues are often multifaceted, cutting across several challenges including under-representation, limited access to finance, lack of digital skills, and discriminatory legal and cultural norms. A study by the International Finance Corporation (IFC) found that women entrepreneurs face a $1.5 trillion credit gap globally, with only 16% of women entrepreneurs in developing countries able to access the credit they need to grow their businesses. Let’s explore what strategies can be employed to address these challenges, and who the critical stakeholders required to implement them effectively are?
Closing the Gender Divide in Digital Entrepreneurship and Financial Inclusion Together
The gender divide in digital entrepreneurship and financial inclusion is a complex issue that requires a multifaceted approach. The focus needs to evolve from finding generic solutions to addressing the unique requirements of specific communities. One such approach is through education. Women face greater obstacles as they progress to higher levels of education, particularly in Sub-Saharan Africa, leading many to pursue informal ambitions. As a result, women are disadvantaged in income-earning opportunities and are more likely to experience unemployment, informal employment, or lower-paying jobs than men. Education however serves as a tool for enlightenment demonstrating that providing access to resources and training schemes can transform women’s participation in economic activities.
For instance, in 2021, the United Nations Educational, Scientific and Cultural Organization (UNESCO) collaborated with the Women in Africa Initiative (WIA) to offer online courses targeted at promoting African women’s digital entrepreneurship and digital literacy in the field of Artificial Intelligence.
Addressing cultural barriers that limit women’s access to digital entrepreneurship and financial services is also critical. This ranges from challenging gender stereotypes, increasing women’s representation in leadership positions, and promoting women’s economic empowerment at the policy level. Additionally, encouraging gender-disaggregated data collection is essential for understanding the needs and experiences of women in digital entrepreneurship and financial inclusion. This can help identify gaps and barriers and inform the design and implementation of policies and programs to foster the development of digital entrepreneurship and financial inclusion for women. The African Gender Data Book published by the African Development Bank Group (AFDB) in 2019 is a great example. It provided the AFDB regional member-states with gender-specific data collection tools that can ultimately aid the development of government policies that foster women’s empowerment and financial inclusion.
Facilitating purposeful and results-driven partnerships or collaborations among various stakeholders namely governments, financial institutions, non-governmental organizations (NGOs), the private sector, and civil society is an immense contribution to bridging the gender gap.
Collaboration between various individuals and entities is crucial in bringing about the necessary institutional changes.
Ultimately, the promotion of positive representation involves building more inclusive spaces and engaging with authentic voices that truly represent the underserved community. Many companies are recognizing the importance of this and are actively working towards creating more authentic and representative environments for women entrepreneurs. This is just the beginning of greater things to come.