- According to the World Bank, small and medium-sized enterprises with female ownership represent 30 to 37 per cent of all SMEs in emerging markets.
- These businesses have unmet financial needs of between Sh26 trillion and Sh32 billion a year.
According to data by Bloomberg, women drive 70-80 per cent of all consumer purchasing decisions, making them a key pillar in societal development. It, therefore, comes as a surprise to many that men are more likely to get financing from banks compared to women. In fact, 78 percent of lending is done to men.
In many cultures, it is men who traditionally own the land or the house. It is them who confidently and fearlessly approach banks because they have an advantage, knowledge, and confidence that they can easily access funds.
According to the World Bank, small and medium-sized enterprises with female ownership represent 30 to 37 per cent of all SMEs in emerging markets. These businesses have unmet financial needs of between Sh26 trillion and Sh32 billion a year. This is their biggest barrier to growth and development.
How do we address this problem? How do we ensure that financial solutions reach women more equitably?
The first thing banks need to do is gather and dissect information by gender orientation to screen the execution of their interest in women. Data analysis holds the key to helping organisations better understand their information and uncover the valuable insights they need to improve business operations, develop new products and services and, crucially, enhance their customer experience for women.
To truly elevate women’s entrepreneurial spirit and uplift society, the world must become more perceptive and offer a customer-centric value proposition. Banks should endeavour to develop and adopt demand-side metrics that focus on customer attitudes, behaviours, aspirations, and challenges in a uniform, granular and objective manner.
Investing in marketing tools that reflect women’s needs and training relationship managers to serve the women’s market are necessary steps to success. This, therefore, means that women-led businesses need to be viewed differently and given a distinctive value proposition product and service.
Secondly, research by The Global Findex, a comprehensive database measuring how people save, borrow and manage risk in 148 countries, showed that women do not necessarily want differentiated financial products, but to be acknowledged and treated with respect.
Investing in marketing tools that reflect women’s needs and training relationship managers to serve the women’s market are necessary steps to success. This, therefore, means that women-led businesses need to be viewed differently and given a distinctive value proposition product and service.
Lastly, as this is an ongoing process of learning and unlearning, financial institutions need to have a corporate culture shift that has a focused commitment to gender diversity. This will have to come from within the organisation and an internal champion is a critical success factor.
The champion will represent hope and purpose to allay the woman’s fears, demystify the financial jargon, encourage her to continuously upskill, network and expose her to new/future trends that affect her business world. They must encompass the non-financial piece that addresses the things that matter to a woman, are close to her heart, and that impact her business such as education, wealth, protection and health. Hence there will be a need to build internal capacity and get buy-in from the Board and Executive Management to this cause.
Women represent a powerful source of economic development and improving social mobility. They produce more than half of the world’s food and control about $20 trillion in consumer spending. In Africa specifically, they represent 80 per cent of the agricultural workforce, Africa’s single largest Gross Domestic Product contributor. We are now starting to see women venture into unchartered spaces such as oil and gas, mining and manufacturing.
Thinking into the future, every financial institution should consider re-engineering financial solutions that will reach more women. This way, the world has a better chance of attaining shared prosperity.
Collectively, narrowing the gender gap would foster greater stability in the banking system and boost economic growth. This will also contribute to a more effective monetary and fiscal policy not just in Kenya, but around the globe. Dare to Aspire. Dare to Achieve.