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Policy and Women’s Financial Inclusion for Women-SMEs
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The following is a panel transcript (edited for length and clarity) of a panel that was held on March 14, 2024 at the Hyatt Regency in Addis Ababa, Ethiopia, as part of the FinEquity Africa Annual Convening.


Yasmin Bin-Humam: Thank you all for joining us. We have an esteemed panel here today to delve into the pathways of empowering women entrepreneurs with financial sector policies and regulations. With that I will turn my first question to Audrey. How do governments reflect strategic commitments to women’s entrepreneurship and financial inclusion, and how does the Alliance for Financial Inclusion (AFI) support them?

Audrey Hove: Thank you very much Yasmin for the good question. In terms of an appreciation of gender-inclusive finance (GIF) with a particular focus on women-SMEs (including women-led and women-owned SMEs) , this thematic area has become more pronounced and relevant for AFI members. Each year we conduct a member needs assessment to understand the areas of interest of our members, and in the recent past GIF has become one of the top priority areas for regulators and policymakers.

Governments are reflecting their commitment to women’s entrepreneurship and financial inclusion through the development of National Financial Inclusion Strategies (NFIS). In many cases, the process is led by central banks or ministries of finance. Some of the NFIS are being aligned to countries’ national blueprints. For example, Zimbabwe has the National Development Strategy 2030, which also provides financial inclusion as a key pillar to the attainment of the Strategy. A financial inclusion strategy can also stem from a country being a signatory to one of the international treaties such as, the UN 2030 Agenda for Sustainable Development. AFI has developed a number of frameworks, toolkits, and case studies, to support members in developing their NFIS. Our work covers the pre-inception, inception, and implementation phases of the NFIS.

You are all encouraged to read AFI’s Framework on Integrating Gender into NFIS which provides step-by-step guidance. People often ask the question “How can one integrate gender,” Without guidance, it is a very difficult task.

For an effective strategy, getting the buy-in of key stakeholders at a high level is always very important. We have seen some of our members (who are central banks) working closely with ministries of finance–particularly from a budgeting perspective. You can have a good strategy but if there are no resources to support implementation, the strategy will just sit on the shelf.

We also have a number of knowledge products to guide policymakers and regulators in creating an enabling environment to support financial inclusion for women SMEs. A sound regulatory environment will enable women SMEs to thrive and will also contribute to closing the financing gap for SMEs.

Yasmin Bin-Humam: This is a perfect segue. In Zambia, gender is reflected both in the NFIS and in the strategy of the Bank of Zambia itself. Brenda, can you tell us about it?

Brenda Mwanza: Thank you. Taking up the issue of NFIS, I’ll put it into context that from a very high level, the government has recognized financial inclusion as an enabler of economic development. In the 2022-2026 National Development Plan, Zambia has included the objective of improving the livelihoods of the disadvantaged, particularly women and youth. Zambia has revised the national gender policy to enable opportunities for both women and men in the financial sector as well as in national development. Some of the revisions include enabling women to have legal ownership of land, property, inheritance, and administration of property. In addition, women are allowed to sign off on contracts, make decisions on residence, and set up businesses. In parallel to this, the Bank of Zambia and the Ministry of Finance have been the leading institutions for developing the NFIS to achieve universal access and usage of affordable financial products and services by all, particularly the underserved women and youth.

The Bank of Zambia has developed action plans to implement the initiatives identified in the NFIS. This includes support to financing as well as stakeholder engagement to ensure the initiatives we are putting out are actualized. The Bank of Zambia has also established a gender policy and strategy to facilitate the implementation of gender mainstreaming within the Bank of Zambia and to promote women’s financial inclusion among the regulated financial service providers. In this regard, we are currently building capacity for mainstreaming gender within the Bank of Zambia as you need all the staff, especially the males, to buy into and agree with affirmative action. Other areas we are engaging in include equal opportunities for employment service provision, promotions, loans, and including women in the decision-making governance structures. The Bank of Zambia has also supported providing scholarships for students, including women, who are studying at the university.

In the financial sector, the Bank of Zambia has supported financial inclusion surveys to provide necessary information on financial access, usage, and barriers across the country. The Bank of Zambia has been working with AFI and AFD to develop a platform on which all the FSPs can provide sex-disaggregated data on financial access and usage of products. Sex disaggregation of data is also a feature of our credit monitoring tools. This enables the identification of gaps, evidence-based decision-making, customer-centric product design, and the development of targeted initiatives and policies to support financial inclusion.  Because of this, we can really come up with appropriate, good initiatives.

Yasmin Bin-Humam: Sewit, please tell us about how Ethiopia is doing at a high level.

Sewit Tadesse: I’m glad Brenda went into the details! In Ethiopia there are high-level commitments for digitization, women’s economic empowerment, and financial inclusion. These themes are reflected in Ethiopia’s development strategy.

The NFIS was drafted in 2021 and goes to 2025, and women are explicitly mentioned as a target group for financial inclusion. Rural women are especially targeted because of the double burden of being female, and away from urban and peri-urban areas where there are quite impressive levels of mobile money usage and penetration of financial institutions. The National Digital Payment Strategy explicitly mentions the need to be gender intentional, and explicitly mentions the need to target women, but actually diverges from the NFIS by mentioning women-led MSMEs as a priority. There is a need for harmonization. The National Women’s Policy is being re-drafted and is actually in parliament right now.

There is a recognition of financial inclusion as a vehicle for women’s economic empowerment. The Ethiopia coalition of the Women’s Digital Financial Inclusion Advocacy Hub brings the stakeholders together to ensure there is a level environment in terms of targeting, priorities, and collaboration.

Yasmin Bin-Humam: Once you have high-level commitments, you have to implement them. Brenda alluded to some of the dynamics. To my mind, there are three mechanisms for this. One is initiatives, things like funding financial literacy programs, credit guarantee schemes, scholarships for students studying finance, and so forth. The second is directly mandating that FSPs do certain things and serve more women, more effectively. The third is to adopt a broader–within the financial sector–cross-pillar approach to regulation. Turning to our panelists with these pathways in mind, in Zambia the Bank of Zambia has requested that FSPs use a gender assessment tool developed by the ILO, called the FAMOS tool. Perhaps you can share with us what is the challenge that this seeks to address and how it is proceeding.

Brenda Mwanza: FAMOS stands for Female and Male Operated Small enterprises. This is a tool which FSPs are meant to apply to assess their own institutional capacity in terms of how they are financing male and female operated enterprises. This tool was developed by ILO and introduced to the Bank of Zambia in 2010, but traction really started in 2015 when it was localized with FSPs and more recently, with payment service providers. It has been observed that a lot of transactions, particularly by women, are being done using mobile payments.

On-site examinations of FSPs are mandatory, and banks are aware that a FAMOS expert will accompany the supervisory team to interview the management, staff, as well as some clients. The goal is for FSPs to realize the opportunities available to them and start developing products that will facilitate more credit to women. We have seen through credit monitoring that women SMEs are at the bottom end of credit. This is because they have issues with collateral and with financial record-keeping. Financial literacy is another challenge, and for many women even walking into a financial institution is something they are afraid to do. The FAMOS assessment helps FSPs realize that they need to step up in terms of what can they do to develop financial products that support women SMEs as well as to mainstream gender in their operations with the support of the Bank of Zambia. Because this tool is applied during on-site inspections there is consistency and a positive response to them.

Yasmin Bin-Humam: It sounds like Zambia is taking a guidance and capacity-building approach, but other countries are a bit more heavy-handed with these types of regulations. Audrey, can you tell us what is going on among AFI members?

Audrey Hove: Thank you, Yasmin. I like the example from Zambia. Again, different markets have different ways of operating. State Bank of Pakistan is implementing an ambitious gender project called Banking on Equality (BoE), where they are looking at mainstreaming gender in everything that they do as an institution and for the financial sector. In the BoE policy, the central bank has set ambitious targets for credit to women. AFI supported the State Bank of Pakistan to develop a curriculum and training of trainers to understand and mainstream gender in their policies and activities. While setting specific targets for financial service practitioners is good, for regulators it also comes with responsibilities.

Another example is that of the Reserve Bank of Zimbabwe (RBZ) which encourages the banking sector to set up women’s desks and SME units to support loan targeting. While it relies on moral suasion, because of the benefits that come along with having such a dedicated department or unit, by around 2021, out of 18 commercial banks, 13 had established SME units due to moral suasion by the RBZ and greater understanding of the business case of serving women-SMEs.

Regulators must consider the nature of incentives they extend to the private players if a target is to be set – and that comes in the form of creating an enabling environment. It is okay to demand that 20% of loans go to women SMEs, but that should be supported by adequate infrastructure for the private sector to work towards that goal. Again, this should be supported by clear actions. What does the regulator do if the target is not achieved? Levy penalties? What is the nature of the penalty? Is it enforceable?

Yasmin Bin-Humam: Absolutely. The self-awareness, and capacity of the regulators can inhibit some of these approaches. Countries like Mexico and Ecuador are also picking such initiatives. Which brings us to the question of licensing. Audrey, can you start us with how licensing shapes the market dynamics for support to women SMEs?

Audrey Hove: Yes indeed, licensing of financial institutions plays a critical role in supporting women MSMEs. In different markets, for regulators, it cannot be a one-size-fits-all if all segments are to be served. A market can include commercial banks, deposit-taking MFIs, MFIs, and SACCOs, among others… all of which have different licensing requirements and are meant to serve different segments.

This morning we have been talking about developing products and services that are suitable for women. Big banks often need to get approval from their head offices, and the process to make changes can be lengthy and difficult. Small institutions are more agile as they can sit around a table and say we just came from the village, this is what women want, can we design something? Smaller institutions generally have the interest and ability to respond more quickly.

Regulators need to apply a risk-based approach in terms of licensing and regulating financial institutions with regard to capital requirements and prudential supervision. They should also understand that women customers who are well-served will graduate into higher levels of financial institutions.

Yasmin Bin-Humam: Brenda, can you tell us who are the main providers of credit to women SMEs in Zambia and how have regulators enabled them, followed by a perspective on Ethiopia from Sewit?

Brenda Mwanza: The main providers of credit to women SMEs are the microfinance institutions. We have a few commercial banks that in the recent past designated percentages of their portfolios to SMEs as well as government schemes. Bespoke initiatives are in response to the barriers (lack of collateral, risk profile, illiteracy, low income, high interest rates, etc.) associated with women entrepreneurs.  However, more recently, a few banks have realized the value propositions of serving women SMEs from studies and data showing that women have lower rates of non-performing loans and save large amounts of money in informal savings groups. Bringing this information to light has led to the development of financial products catering to more women in savings groups and village banks.

Sewit Tadesse: I’ve been working with women entrepreneurs for most of my career. Access to credit depends on which phase of the entrepreneur’s life cycle you’re talking about. Most startups begin with loans from family and friends or less formal savings groups. There are MFIs serving women-owned MSMEs such as Peace MFI, and SACCOs, some of whom are organized by WISE. As startups grow and the need for capital grows, they hit a wall because there is a financing gap between the micro and the small. At that point, there’s a challenge. Banks don’t want to take the risk for such a small loan and MFIs or SACCOs cannot meet that demand. There are a lot of initiatives trying to address this. There’s the Women Entrepreneurs Development Program and SME finance interventions there as well.

On the policy side, there are interventions on movable collateral. Women can’t access loans because they don’t have the right collateral which is usually houses. Ethiopia is a complex country with over 80 ethnic groups – in most of them women should not own land or houses and can’t get collateral with the approval of family – so this is an area the government is targeting through policy reform. Enat Bank is a women-owned and women-led bank established to serve women-owned enterprises. It is not big enough to serve all the demands, but it is there.

Yasmin Bin-Humam: AFI has published case studies on the enabling regulatory environment for women’s entrepreneurship and there are many ‘buckets’ of regulation that are covered, Audrey can you tell us why such a far-ranging approach is necessary and what are the most common buckets?

Audrey Hove: With the support of the African Development Bank under the AFAWA project, AFI has undertaken seven case studies to better understand the landscape of the policy and regulatory environment for women MSMEs. Under the same project, AFI will be developing an additional 13 studies in 2024 to bring the total number of case studies to 20. From the first seven case studies, AFI considered the common barriers to women MSMEs.

Low income levels of women make entrepreneurship difficult. Generally, women do more hours of unpaid domestic work, so they earn less and do not generate enough income to support their entrepreneurial activities, Further, due to their domestic chores, which impact their mobility, they face challenges with physically visiting financial institutions, hence prefer services that are delivered in the comfort of their spaces.

Socio-cultural norms such as limited/controlled mobility are a common barrier, hampering the exploitation of business opportunities for women-led MSMEs, thus impacting access to markets and access to finance. Women are often considered minors even though their constitutional rights may be clearly expressed in law. Women often lack sufficient identification documents, for know-your-customer (KYC) requirements, which is challenging for FSPs who need to know who they are dealing with.

In many jurisdictions, women face barriers to the inheritance of fixed property, which affects their ability to pledge property as security. Mobility barriers were also identified as a key challenge to women.

Our case studies also noted deficiencies in business skills amongst most women-SMEs hence the need for capacity building.

Inadequacies in credit infrastructures were noted as another barrier to access to finance by women-SMEs. If a market does not have a collateral registry, a credit reference system, or a credit guarantee scheme – it becomes more difficult for women SMEs to access finance. Insufficient sex-disaggregated data is another barrier. You only manage or support that which you know. If you have no details on where women SMEs are operating and what their needs are, is difficult to design products for them.

A crucial learning that came from this was the lack of definition of women-SMEs. If we do not know who a woman is, how can we come up with solutions to address the barriers that may exist? Some markets have a definition of women SMEs and some markets do not. We are growing our understanding of the impact that lack of definition has on women SMEs’ access to finance.

The case studies also revealed that a number of countries are implementing initiatives aimed at supporting access to finance by women SMEs. For example, dedicated gender units across ministries and across departments were found to be common.

Six out of the seven markets we undertook studies in have a national financial inclusion strategy (NFIS) that has specific targets for women SMEs. Some have additional frameworks to support women SMEs. Initiatives such as setting up women's desks and SME units are not very common in many markets but exist in places like Zimbabwe.

One case study features a dedicated women’s bank, similar to what was referenced earlier for Ethiopia. Nigeria has strengthened its overall framework dedicated to women's financial inclusion that lays the foundation for an accelerated reduction of the gender financial inclusion gap. DRC has some FSPs that are engaging prospective women customers as part of their strategy to better serve the women’s market. As we heard from Brenda, the Bank of Zambia has implemented the FAMOS tool. A few markets highlight the need for gender-intentional consumer protection frameworks and women-targeted financial service delivery channels for women. The infrastructure dynamics I mentioned earlier proved a common challenge.

AFI will continue to analyze the member markets and engage on how financial sectors can be reshaped to better serve women SMEs.

Yasmin Bin-Humam: Going to a more granular level Brenda, perhaps you can tell us how gender has been incorporated into regulatory approaches in Zambia.

Brenda Mwanza: The following regulatory approaches have been implemented in Zambia: The Movable Property (Security Interest) Act of 2016 was enacted to facilitate movable asset-based lending for people who do not have the traditional land collateral for accessing credit from financial institutions. This model of lending was intended to also support women. During the first two years of implementation, 7,600 applications were made using movable assets such as household goods like televisions, machinery, motor vehicles, and agricultural implements.  

Previously, most of the formal institutions required documentation such as national IDs, proof of residence, references from people with accounts, and evidence of prior loan repayments. Therefore, women, particularly those who don’t have IDs, found it difficult to open accounts, even on mobile platforms. The Bank of Zambia has now eased the KYC requirements. You just need to have an ID, be it a national ID, or a driving license, and those in the informal society can get a letter from the head of their community who can attest to support their opening of the account on the sim card or at an MFI.

The implementation of the national financial switch and interoperability between financial service providers has enhanced the uptake of digital financial services (DFS), particularly extending to rural and distant parts of the country. DFS are favored among women, but digital literacy is a challenge. Policies and strategies have championed the production of very simple mobile phones and digital financial services using USSD so that even those who are illiterate are able to utilize them. Services are also provided through simple voice activation messages in different local languages, for example pressing 1 as an option for depositing money. It has been observed that more women are able to buy inexpensive sim cards without necessarily owning a mobile phone and they can go to mobile agents (found all over the country), and save on wallets, make deposits, access loans, make transfers, and pay for commodities. These dynamics have benefitted a lot of women, as well as women-led informal micro-enterprises who in turn support the women SMEs.

Regulatory sandbox guidelines have been established to encourage the testing of innovative product designs and fintechs. Implementation of the FAMOS tool and gender mainstreaming are also important aspects of the Bank of Zambia strategy and NFIS as already mentioned.

Yasmin Bin-Humam: We have 10 minutes left, and I would like to further explore the role of data. Audrey, what are the different kinds of data, the pros and cons for the regulator of each kind of data, and how does AFI support its members in data generation & analysis? To Brenda, how has data-informed policy & regulation at the Bank of Zambia. Finally, to Sewit, what role can members of the advocacy hub play in generating data and using it for advocacy?

Audrey Hove: You can only manage that which you can measure. Supply-side and demand-side data are both important for regulators to support decision-making.

Regulators should facilitate the collection of supply-side data for continuous monitoring. Some AFI members are more technologically advanced, while some still lag behind and use manual data collection methods, but as long as they are able to collect that data, we take it as a positive step. Demand-side data is a critical complement in terms of coming up with evidence-based policies. However, just data alone without an explanation of what speaks to the data is not good enough. Therefore, there is always a need to have a qualitative analysis of the data.

In terms of pros and cons, supply-side data is a lot easier to collect. For some markets, it is a bit expensive, especially if it is not automated. In such cases, quality may be questionable and data becomes prone to data manipulation and data errors. But we have also seen some of our members who have invested in systems to automate the collection of data such as the Bank Supervision Application, largely adopted by members in the Southern African Development Community (SADC) region. It also requires financial investments by FSPs in supervisory technology, but it means analysis can be done on a real-time basis, and informed decisions can be made.

AFI has developed guidance on the collection of data, including specifically on sex-disaggregated data and these knowledge products, which are available on our website, for supply-side data collection. We also have capacity-building programs to support our members' design of data collection templates, incorporating gender considerations and how to analyze data sets for evidence-based policies. AFI members can learn from their peers how they can collect and analyze data. On the demand side, we leverage the results of the Findex surveys and we also encourage our members to undertake regular country-level demand surveys such as the FinScope surveys by Finmark Trust.

[Damola Owolade, Finmark Trust, from audience: FinScope surveys are done every three years or five years depending on the funding model. In some countries, there is a syndicated model where FSPs pay, and in other countries donors pay, and in other countries governments budget for it.]

Audrey Hove: Resources permitting, AFI sometimes provides funding to members for the collection of demand-side data. In 2022 we supported a number of our members including the Central Bank of Suriname, the Palestine Monetary Authority, and the Bank of Mozambique.

Brenda Mwanza: The Bank of Zambia provides a budget to conduct FinScope surveys every five years to collect information on demand, access, use, behavior towards financial providers, and challenges faced. FinScope findings can be analyzed by sex, region, and age. The indicators allow us to assess levels of financial inclusion, financial health, financial literacy, impacts of COVID-19, as well as green finance and climate change effects. The importance of data cannot be over-emphasized in making evidence-based decisions, policies, regulations, and initiatives in response to addressing financial inclusion gaps that have been identified. The FinScope survey reports and the data sets are also available to the public and private sector.

We also have an automated system (BSA) to collect data directly from FSPs as Audrey mentioned. Between FinScope surveys, we are therefore still able to monitor to access and usage of financial products and services. We have included sex as one of the mandatory data points that all the institutions have to provide, and this is also collected in the sex-disaggregated data platform that includes data from payment service providers including mobile network operators. It has built our understanding of volumes and who is using DFS. We also have a credit monitoring tool where data is mapped by credit applications and approvals and disaggregated by sex and youth. This provides granular information to support product development by FSPs and targeted initiatives or interventions by government and financial sector stakeholders.

Sewit Tadesse: The advocacy hub has three pillars: networking, capacity building, and sub-grants. This year we were able to give out seven sub-grants in Ethiopia. We had very diverse submissions. Five of those selected have a data collection or research component. There is a demand for research and knowledge production on different intersectional segments. For example, we have a National Association of the Blind supporting visually impaired women, we have an association targeting women at the grassroots level to build digital financial capability, and we have an organization working with refugees to target digital financial capabilities for internally displaced persons (IDPs) from two different regions, as well as MSMEs in Addis Ababa. There is a lot of demand for knowledge production that is contextualized to specific segments in order to provide a nuanced understanding of where the gaps are and which barriers affect women.


About this event

Addis Ababa, Ethiopia
COP Topics:
Women's Economic Empowerment, Policy & Regulation
Yasmin Bin-Humam.

Yasmin Bin-Humam


Yasmin Bin-Humam currently supports CGAP’s project on supply-side gender disaggregated data for financial sector regulators and supervisors. She also leads CGAP’s work stream on the nexus of gender norms and financial sector regulation and supervisory practices, and continues to support institutional change management for CGAP’s application of a gender lens across all CGAP work programs. 

Audrey Hove.

Audrey Hove

Alliance for Financial Inclusion (AFI)

Audrey leads the Gender Inclusive Finance (GIF) workstream at the Alliance for Financial Inclusion (AFI), the world’s leading organization on financial inclusion policy and regulation with 86 members (central banks and financial sector regulatory institutions) in 82 countries. Her role entails leading the conceptualization, coordination, and implementation of financial inclusion policies and initiatives to support AFI member institutions in their drive to promote gender inclusive finance. Prior to joining AFI, Audrey acquired extensive knowledge, skills and experience in financial sector regulation, supervision of banking institutions and policy development, having worked in the Reserve Bank of Zimbabwe for close to two decades, leading various functions and portfolios. 

Brenda Mwanza.

Brenda Mwanza

Bank of Zambia

Brenda Mwanza is a development economist with a wealth of experience in macroeconomic and financial sector analysis, policy development, survey implementation and data analytics, gained at the Bank of Zambia over a period of more than 28 years. Currently serving as Assistant Director- Financial Sector Development, her role entails coordinating financial inclusion and financial education initiatives. She is also a Board member of the Securities and Exchange Commission and the Micro Insurance Technical Advisory Group Association in Zambia.

Sewit  Tadesse.

Sewit Tadesse

UNCDF Policy Accelerator

Sewit Haileselassie Tadesse is the Gender Advisor based in Addis Ababa, Ethiopia. Her most recent experience covered program development with USAID’s Office of Transition Initiatives' Ethiopia Support Program. She has expertise is in program design, coordination, research, partnership management, and project management with a focus on incorporating gender perspectives in peace and development programs.