Policy into Practice: Zambia Advances Women’s Financial Inclusion

Worldwide, there are various constraints and barriers that prevent women from accessing formal financial services. These include lower levels of education and income, lack of collateral, legal, time and mobility constraints as well as cultural constraints and an overall lack of gender parity,  just to mention a few. In Africa more than 70% of women are financially excluded and there is a persistent gap between men and women when it comes to financial access.

What can stakeholders do to facilitate women’s access to finance? How can they ensure that women can participate in the economy without facing constraints and barriers limiting their success? To answer these questions, Making Finance Work for Africa (MFW4A), New Faces New Voices (NFNV), the East African Community (EAC), and the German Development Cooperation teamed up to publish a policy brief that provides recommendations on how to advance women’s financial inclusion in Africa. The Policy Brief highlights eight broad policy recommendations:

1. Build the awareness of policy makers and other stakeholders with regard to the financial needs of women in different market segments, and bring women leaders into policy dialogue.
2. Modify and adjust legal, regulatory and supervisory frameworks, remove impediments and allow space for innovation to allow greater financial inclusion for African women; inform and build awareness where discriminatory legal provisions have been removed.
3. Refine and strengthen financial consumer protection regulation that addresses the concerns and issues of women clients, balancing protection with expansion of outreach.
4. Invest in financial capability programs for women to reinforce the ability to act as informed and educated financial consumer.
5. Invest in more extensive gender-disaggregated data collection and analysis; conduct policy research and market research to fill knowledge and information gaps, using a gender lens.
6. Support the development of financial infrastructure as a public good, with awareness of what is most likely to support women’s financial inclusion.
7. Harness the force of women’s leadership to promote policy change, stronger governance and sounder management of financial institutions.
8. Expand financing for women-led SMEs and for smallholder women farmers; support alternative financing windows, with careful attribution of roles of government and the private sector.

MFWA works with partners to support these recommendations through country diagnostics that evaluate the needs of women in different markets, raise awareness about the landscape of financial services available to women, and analyze whether or not their financial needs are being addressed. The findings from these diagnostics, combined with the other policy recommendations, can provide the input needed for stakeholders to take actions that can ultimately have an impact on inclusive financial services for women.

The recommendations in action

Getting these recommendations formalized in the policy sphere is important, but they become much more valuable when they are put into practice. There is an excellent example emerging from Zambia. 

One of the key recommendations in the Policy Brief is that a country needs a policy champion to foster women’s access to finance.  In the case of Zambia, Dr. Tukiya Kankasa-Mabula, Deputy Governor of BoZ, has proven to be that champion.  Dr. Kankasa-Mabula is committed to improving access to financial services for women. After contributing to and taking into consideration the policy recommendations she took action and initiated a dialogue process among the national stakeholders.  

Building awareness among relevant stakeholders is another one of the recommendations in the Policy Brief.  In order to do this, Dr. Kankasa-Mabula established a taskforce on Women’s Financial Inclusion.  

The taskforce consists of members from the Bank of Zambia, the Ministry of Gender and Child Development, the International Labour Organisation (ILO), the African Development Bank, the Bankers Association of Zambia, NFNVs and the Zambia Federation of Associations of Women in Business (ZFAWIB). 

Another recommendation of the policy brief focuses on the legal, regulatory and supervisory framework. By reviewing the framework and understanding where modifications are necessary to enable equal opportunities for men and women, national stakeholders have a clearer understanding of what needs to be done and by whom. In Zambia for example, the know-your-customer (KYC) procedures resulted in unequal access for men and women, as women were less likely to have the requisite documentation. It was clear that in order to provide women the same opportunity for inclusion, KYC rules for opening and operating accounts needed to be relaxed by the Bank of Zambia.  This was one of the early priorities identified by BoZ to simplify the requisite rules.  

The task force, with leadership from Dr. Kankasa-Mabula, took on many of the other recommendations in the Policy Brief including:

• Sex-disaggregated data: BoZ required commercial banks to submit collect and submit sex-disaggregated data.  This not only lead to an improved understanding of women’s financial inclusion but also helped to make areas of intervention visible and served as reinforcement for the national policy dialogue process.
• Financial education: BoZ established a financial education coordinating unit (FECU) to manage financial education within the financial sector regulators.
• Expand financing: One of the private sector partners in the process, Standard Chartered bank works closely with NFNV to interact with more women-run businesses that are looking for financing and offers a savings account exclusively for women. Access Bank, introduced an initiative directly addressing women in August 2015 as well.
• Women’s leadership: In Zambia, New Faces New Voices, has a strong chapter that provides policy direction on the promotion of women.

The case of Zambia points to how these policy recommendations can be applied in practice. Clearly the role of the national champion is key in creating the right linkages and partnerships to facilitate a national process that involves all of the stakeholders needed to achieve meaningful change on inclusive finance for women.  Incidentally, the latest FinScope survey in Zambia showed a decrease in the gender gap in financial access between men and women from 6.9 % in 2009 to 3.8% in 2015; it also showed a significant overall increase in financial inclusion to 59.3%. Perhaps This could be partly due to the advocacy programs led by the Bank of Zambia (BoZ) to promote financial inclusion strategies. We’d also like to think that the Policy Brief was helpful in clarifying some of the key actions that stakeholders could do to make these changes happen.