Does Financial Literacy Have the Potential to Transform Women's Lives in Africa?

In 2023, BRAC International Microfinance (BI MF), with support from the Mastercard Foundation Accelerating Impact for Young Women (AIM) program, launched a Financial and Digital Literacy Training (FLT) program for women clients in Africa. The goal: equip women with the knowledge and skills to manage their finances more effectively. Delivered in weekly sessions over six months, the training covers a comprehensive range of topics including wellbeing, financial and digital literacy, and business development. Since launching, BI MF has reached more than 350,000 women in five countries, with 57% living in rural areas and 44% of them young women.

In our first blog published on FinDev Gateway, we highlighted early results from the pilot showing how women were turning knowledge into action - saving more, investing in joint businesses and building stronger social bonds. This year, we share a deeper look at FLT’s impact, with direct feedback from the women themselves on how the training has shaped their lives.

Improved outcomes for financial literacy training participants

Since 2019, we’ve partnered with 60 Decibels to carry out annual Lean Data^SM surveys - short, meaningful conversations that reveal how our services are truly affecting our client’s lives, in terms of client social outcomes, experience and satisfaction. The 2024 report, based on surveys with 1,929 clients (out of which almost half received FLT) across the BI MF entities, included a special focus on the impact of this curriculum. Here’s what we learned:

1. Financial literacy training improves social outcomes. More than just a training, FLT proved to be a driver of transformation, empowering clients to achieve meaningful improvements across multiple areas. BI MF measures its impact across five social outcome areas - quality of life, women’s economic empowerment, self-employment and livelihood opportunities, financial resilience, and household welfare (see graph below) - to calculate a social outcomes score. Clients who completed the training reported a 71% average social outcomes score, compared to 66% for those who did not receive FLT. The difference was greatest for financial resilience (7 percentage points higher), household welfare (6 points higher), and overall quality of life (6 points higher). The impact was especially strong in Tanzania and Liberia, where clients who received FLT outperformed their peers by 13 and 11 percentage points, respectively. 

2. Financial literacy training can improve client experience. In countries where the improvements in social outcomes scores were not as significant, FLT recipients still reported enhanced client experience, greater satisfaction and improved understanding of loans. Clients who received FLT are more likely to continue with BRAC next year compared to those who did not (88% vs. 82%). This could result in improvements in client retention (meaning their tenure with BRAC), leading to deeper impact in the long run. 

3. Financial literacy training has a greater impact on young women. While women of all ages who received FLT had better social outcomes scores than those who had not received FLT, the gains were greatest for young women aged 18 to 35. Overall quality of life for young women who received FLT was 8 percentage points higher than that of their non-FLT peers (75% v. 67%), compared to the 6-percentage point gain for women over 35 (72% v. 66%). In addition, their ability to save was 12 percentage points higher than their peers (68% v. 56%) vs. an 8-percentage point difference for women over 35 (65% v. 57%).  

Why are these gains greater among young women compared to older clients? One reason could be their limited experience in managing businesses and household finances. The FLT curriculum helps bridge this gap by equipping young women with the knowledge and skills they need to confidently jumpstart their entrepreneurial journeys.

The way forward: scaling and deepening impact

Building on these encouraging results, BI MF is committed to refining the FLT delivery model to ensure we can effectively and sustainably scale the curriculum across our entire client base. We are gradually broadening the curriculum to address the unique needs of our clients and exploring how FLT can be adapted for smallholder farmers. A key addition is a new chapter on climate resilience, providing clients with the knowledge on how to identify and cope with the negative effects of climate change. In parallel, BI MF is also piloting refinements to its loan and savings products to enable access to financial services for young women to fulfill their unique needs and support them on their entrepreneurial journey. 

For responsible financial institutions aiming to build resilience among their clients, financial and digital literacy can be an effective way to strengthen livelihoods and create lasting impact. BRAC believes a holistic approach is important for true transformative impact and financial and digital literacy training is one way in which we are looking to deliver impact to our clients.