Breaking Barriers for Women in Africa Through Mobile Money

Discover the significant role mobile money plays in empowering women and promoting financial inclusion across Sub-Saharan Africa, particularly benefiting female entrepreneurs

Woman of an African fish sales woman wearing a hat and smiling

The success of mobile money in Africa is well known. If you’ve paid attention to the continent’s financial and technology spaces over the past decade, you probably won’t be surprised to learn that it accounts for around 70% of the world’s US$1 trillion mobile money value.

You’d probably also be unsurprised to learn that in Kenya, the country that effectively kick-started Africa’s mobile money revolution, mobile money transactions now account for 56.8% of GDP.

You might not know that mobile money has long played (and continues to play) an essential role in empowering women across Sub-Saharan Africa. 

That’s important because, despite gains in representation (in 11 African countries, women hold over a third of parliamentary seats, more than in Europe), gender inequality remains stark across Africa.

While there are differences from country to country, women throughout the continent fare worse than their male counterparts in several measures, including wages, investment, access to capital, and education.   

Of course, mobile money can’t fix all those issues alone, which requires serious investment and shifts in policy and societal attitudes. But it can significantly improve women’s lives across the continent, especially regarding financial inclusion. 

Taking care of business 

That’s not just conjecturing, either. Research conducted on behalf of the World Bank shows just how substantial the impact has been.

The research notes, for example, that mobile money has enabled Kenyan women to move away from subsistence farming and towards business and retail, helping alleviate poverty in the country. 

The research further notes that,  for individuals and households, mobile money can help reduce transaction costs, lower travel costs, improve welfare by smoothing unexpected income shocks, increase security, and facilitate remittances.

The most significant impact, however, lies in what mobile money can do for female entrepreneurs. 

Using mobile money leads to a 19.8% increase in the likelihood of female-led businesses receiving investments from outside sources.

The average capital investment by female-owned firms is more than six times lower than that of male-owned firms in Africa, which is especially critical.  

That same World Bank research shows that such female-owned businesses are more likely to invest that money in fixed assets and their business’s expansion, offer customers credit, demand credit, and have better relationships with suppliers.

A state of constant evolution 

It’s also worth noting that mobile money has evolved considerably since it landed on the African continent, further enhancing its ability to empower women.

Advances in interoperability, for example, mean that it’s easier than ever for people and businesses on different mobile money systems and in other countries to send and receive money.

Interoperability has massive potential benefits for female entrepreneurs as it allows them to sell their products across borders without relying on traditional international e-commerce infrastructure that can be costly, resource intensive, and require business owners to travel away from home regularly using unsafe or unreliable modes of transportation.

Unlocking new markets is vital for any business’s scale and growth. 

Mobile money will evolve in new and innovative ways in the coming years. And if history is anything to go by, then women will embrace and benefit most from those advancements. 

Breaking barriers across borders

Financial inclusion is the most effective way of reducing inequalities, and that’s especially true for women. And few technologies have fostered that kind of inclusion as successfully as mobile money has.

Money has given unbanked communities and people in remote and rural areas access to financial services that would’ve taken far longer if they’d had to rely on traditional financial institutions.

The fact that it’s had such a profound and lasting impact in elevating women across the continent should, therefore, never be underestimated. 

About the Author: Rashi Gupta is the Group Chief Operating Officer at MFS Africa.