Women and the Solidarity Economy

For Africa’s women, limited access to financial services, cultural norms and gender bias, and inadequate legislative and regulatory framework, all contribute towards delayed realisation of economic development. 

April 9th, 2015

As we approach the end of the Millennium Development Goals (MDGs) in 2015, in retrospect there is an acknowledgement of how women’s financial exclusion may have affected many countries inability to reach their goals. This realisation is also an opportunity to reflect and review the sociocultural and legal environment affecting the status of Africa’s women in financial services. This is especially so because in Africa women’s economic empowerment is still about fundamental rights of women and basic access to financial services. Gender plays a particularly important role in the realization of economic development goals, as women are much more financially excluded than men. Meanwhile, access to and use of financial products and services is increasingly seen as a major driver of economic development in Africa. For Africa’s women, limited access to financial services, cultural norms and gender bias, and inadequate legislative and regulatory framework, all contribute towards delayed realisation of economic development. 

Yet, financial inclusion of women has social benefits as supported by research which shows that women use their earned income and savings more productively, channelling a large share to children’s nutrition, education, health and overall well-being (Burjorjee et al, 2002). However, the exclusion of women in Africa is a challenge that women in general and entrepreneurs in particular face to accessing finance.  

 Access to stable, secure and fair financial services is important for consumers everywhere, particularly to women in Africa who disproportionately still face financial access barriers that prevent them from full participation in the economy and consequently from improving their lives. Effective women’s rights and consumer rights advocacy must therefore seek to understand the need for and advance equal opportunities and rights for women and men as a prerequisite to economic and social justice.  

Women: the unbanked and unemployed majority 

According to a recent Global Financial Inclusion Report (Global Findex, 2014) – a comprehensive database measuring how people use financial services products across 148 countries – women in developing economies are 20 percent less likely than men to have an account at a formal financial institution and 17 percent less likely to have borrowed formally in the past year. In Africa, which still has the highest percentage of the world’s unbanked; the gender gap persists among the 23 percent of adults with access to formal financial institutions.  Throughout Africa, there is a wide variance in access to banking services ranging from a mere 7 percent in Central Africa to 42 percent in Southern Africa. 

The marginalisation and exclusion of women is undeniable and impossible to ignore, on virtually every financial services measure, be it access to banking and credit facilities or with regards to consumer education, women are more economically excluded than men. In addition to statistical and general gender bias in the market, cultural norms and practices, as well as regulatory and legislative environments also contribute to the pervasive exclusion of women. Considering  financial services and the disadvantage of women, a study found that in nine countries in Sub-Saharan Africa, the gender gap in financial services is explained by differences in education, income, employment and statuses as the household head. Once the study controls for these characteristics, the gender gap in access to finance disappears (Atterido et al, 2011). 

Formal employment statistics show a general gender bias against women. There is statistically low penetration of women in the formal workforce at 40 percent, despite women being the majority of the population. This pattern places women in Africa at a particular disadvantage.  

Women: the landless disempowered majority

Socio-cultural barriers to land and property ownership have disparate impacts on women’s access to not only regular banking but also finance in order to support their entrepreneurial and business ventures. Although in many countries there has been substantive progress in advancing women’s participation in overall economic development, African women’s contribution is severely constrained by their lack of access to finance. Land ownership data shows that only 19.2 percent in Zambia, 19.7 percent in Tanzania, 23.1 percent in Mozambique of agricultural land is owned by women (FAO, 2014), to name a few examples. Although the last decade has seen progress in this regard, women’s limited ownership creates serious obstacles to accessing capital from banks and other financial institutions, which usually require collateral for the loans in the form of title, property and land. For instance, it is only as recent as 2010 that the High Court of Swaziland for instance ruled that some married women would be allowed to register property in their own names despite a 2005 Constitution that granted women an equal status, after centuries of being classified and treated as minors. 

In many African countries, culture and gender discrimination also restrict women’s economic and physical mobility; confining many of them to subsistence agriculture production in rural areas and further limiting their economic prospects as well as their access to finance. This unfavourable status of women contributes to the negative perceptions of women’s economic capacities by the banking sector.  As a result, women are subject to “gender stereotyping” in their relationship with lending institutions. Such unfavourable socio-cultural status of women contributes towards negative perceptions of women’s economic capacities by the financial services industry. This is so despite the many documented stories from the microfinance sector where women are renowned for being better payers than men. Yet, the credit histories from this sector are not available to the wider banking sector, thus further placing them at a disadvantage. This is consistent with the finding of a study of bank loan officers which, for instance, found that women are perceived as being less entrepreneurial than men (Buttner and Rose, 1988). 

Furthermore, restrictions on opening a bank account, such as requirements for a male family member’s permission, restricting women’s access to accounts, are part of the historic oppression through cultural norms and practices that affect African women’s overall access to financial services. Even in cases where women have access to financial services, it can be in name only – whereby cultural norms and practices are such that the decision-making authority around the use of those funds often lies with a male member of the family. 

As such, women entrepreneurs in Africa (including women in Kenya, Namibia and Uganda),  still face a number of specific hurdles. i Key among these are the differences in land tenure rights between men and women which have historically left women disadvantaged, with less access to credit and markets. Women’s access and rights to land and property depends on their relationship to male family members – as a wife, daughter, sister or mother. According to customary law in patrilineal communities, in most cases a widow will only inherit her husband’s property if there are no male heirs. Widowhood, divorce, or desertion still makes women particularly vulnerable especially in African societies (Poverty Matters, 2011).

Women entrepreneurs remain woefully underserved as evidenced in a study conducted by the African Development Bank (Triki et al, 2013). Even in countries reporting an increase ranging from 10 percent to 30 percent over the last decade in the number of women-run enterprises (such as South Africa, Zambia, Egypt, Ghana, Ivory Coast, Nigeria and Ethiopia), these firms receive on average less than 10 percent of all capital invested. In Uganda, women own about 40 percent of businesses with registered premises but only receive about nine percent of commercial credit.

A case of half measures and irresponsive legal frameworks

Access to credit can open up economic opportunities for women, and bank accounts can be a gateway to the use of additional financial services. 

However, even if women can gain access to a loan, they often lack access to other financial services, such as savings, digital payment methods, and insurance. Lack of financial education also limits women from gaining access to and benefitting from the full suite of financial products and services in the market. 

Starting a business can also be difficult for women. In Cameroon, for example, although a woman is now legally allowed to start a business without her husband’s consent, a husband may still formally object to his wife’s exercise of a trade or profession if he judges that it is not in the interest of their marriage or children. In Swaziland, women are not allowed to register property and they need a male guardian’s consent to open a bank account or start a business. In the Democratic Republic of the Congo the law requires a woman to physically take her husband with her to register a business (Poverty Matters, 2011).

Inadequate legal and regulatory frameworks in most African countries contribute towards the unfavourable environment for women to gain financial inclusion as evidenced by laws in many African countries that still explicitly differentiate between men and women’s property rights. Sadly, a whopping 25 out of 35 Sub-Saharan countries covered in the 2012 World Bank’s Women, Business and the Law Report legally differentiate benefits by gender with only ten (Angola, Burkina Faso, Ethiopia, Kenya, Liberia, Mauritius, Namibia, South Africa, Zambia and Zimbabwe) that did not have legal differentiation. This legal differentiation between men and women robs the latter of de jure or de facto appropriate property rights to ensure access to and enjoyment of financial services and overall economic empowerment. 

In addition, when it comes to legal frameworks, women also typically lack control over their joint or shared assets which they could otherwise use as collateral in accessing financial services. In fact, even where the statutory rights provide gender equality, the coexistence of multiple legal systems, such as civil and customary, in relation to women’s legal status to inherit property such as land or housing creates further insecurity for women in dealing with financial institutions (Bardasi et al, 2007). For example, in Kenya the constitution grants equal rights to men and women, however certain tribes are exempted from this rule and they opt to apply their customary law. 

In several African countries, women are not able to make legal transactions let alone apply for credit, unless a male family member signs for them. Such requirements exist for instance in the Democratic Republic of the Congo, Namibia, Rwanda, Swaziland and Uganda where a male family member’s signature is necessary for any woman seeking to open a bank account, or to make money transfers. All these barriers mean half measures for women in accessing financial and others services and very little if any protection for them from the law. 

A case of missed opportunities 

African women remain on the edge despite being a huge potential market for financial institutions. In South Africa, where racial disparities are still a challenge, according to a study commissioned by the International Finance Corporation IFC and conducted by the Department of Trade and Industry, only 38 percent of Black women are formally banked against 44 percent of Black men and 94 percent and 91 percent respectively of White men and women.  While 88 percent of banked White women are able to reach their bank within 10 minutes, the corresponding percentage for banked Black women is only 22 percent. Forty two percent of Black women are financially excluded – they have no financial products at all. This compares to only five percent of white women who have no financial products at all. The remaining 20 percent of Black women use informal products such as stokvels, savings clubs, burial societies and informal sources of credit or have other formal products such as insurance and retail credit. (IFC et al, 2005). The majority of the potential market – Black women – remain untapped and excluded. 

In general – women especially in Africa – are significantly more likely to report saving using a community-based method such as a rotating savings and credit association, known as a susu in West Africa. In Sub-Saharan Africa, for example, 53 percent of female savers report using a community-based method, compared with 42 percent of male savers. The high use of these “semiformal” products—where users commit to regular saving might suggest a missed opportunity to provide safe, affordable financial products to people without formal accounts, particularly women (Demirguc-Kunt et al, 2012).

The amount of money that these clubs have collectively mobilised is impressive. For instance,  chamas in Kenya are widely reported to have helped accumulate $60 billion Kenyan Shillings, or roughly $600 million US dollars. Their effect on individuals’ lives can only be transformative leading many African women and their families to experience much success that would have otherwise not been possible had they solely relied on formal financial services sector. 

While access barriers are significant, the opportunity for financial services companies who can provide affordable, appropriate and accessible products to meet the needs of especially those who are self-employed is significant. The size of this market and its potential to alter the status of household income and security warrants the attention of policy makers and financial product providers in a way that advances women’s economic empowerment as “smart economics” and a good practice in pro-poor growth while also underscoring the importance of the fundamental rights of women’s equality.  

There has been a general emphasis on women accessing credit and this is understandable. However women in Africa need access to a range of financial products yet they remain the most untapped market. Furthermore, there has been a tendency in the development and donor community to emphasize access to credit, particularly micro lending, as the silver bullet while the challenge is to reach poor women who are landless labourers, smallholder agricultural producers, cross-border traders and factory and domestic workers to ensure that these women also have access to the opportunities and benefits of economic growth and trade (Mayoux, 2009). This group of women is even more marginalised as they also have low levels of literacy, limited to no access to and control over resources as well as the lack of access to networks and people who can assist and support them exacerbates their marginalisation and access to economic empowerment. In fact, the lack of education, work experience, and financial literacy skills results in an inability for women to “navigate the system,” which leaves them disadvantaged when it comes to seeking financial services (Hallward-Driemeier, 2011).

Mobile financial services are also being hailed as the new and emerging frontier – with promises of narrowing the financial exclusion especially for women in the developing world.  There is over 150 mobile money deployments live and over 110 more planned worldwide at present. For instance, markets such as Tanzania, Uganda, and South Arica are realizing success and are potentially able to replicate the widespread adoption of Safaricom’s M-PESA service in Kenya. Meanwhile, mobile operators, financial institutions, governments, and other service providers are figuring out how to build attractive and user-friendly services, distribution networks and marketing approaches to embed mobile financial services into their national infrastructures with viable, long-term business models. A consistently overlooked theme in these discussions has been women, including their wants and needs for and use of mobile financial services, as well as their critical role in the success of any mobile financial services deployment (GSMA, 2012). 

There is an already existing gender gap in terms of women’s ownership and use of mobile services generally. Despite the proven role women’s financial inclusion can play in advancing economic development and empowerment, and despite the role mobile might play (in 2012, an estimated 1.7 billion people had a mobile phone but not a bank account ). The linkages between women’s financial inclusion and mobile financial services thus far have not been sufficiently highlighted and elevated for discussion according to a study on women and mobile financial services (GSMA, 2012). 


Although the last decade has seen much improvement in the area of women’s economic rights, so much more can be strengthened to improve national administrative and legal frameworks relating to land, inheritance and property rights. Ensuring women’s economic empowerment requires a holistic approach and long-term commitment to integrating gender-specific perspectives at the design stage of policy and programming in the financial services sector. At the global level, with the fast emergence of mobile banking, governments must be proactive in ensuring an inclusive broad-based digital financial system as a path to growth and increased participation of women in the economy. Most importantly, fundamental women’s rights seeking more equitable access to assets and services, improvement of employment opportunities including increasing recognition of women’s vast unpaid work, must remain central to the design and implementation of policies and programmes to ensure financial inclusion for women in Africa. 

Onica Makwakwa  rior to joining CI, Onica spent more than 17 years handling the advocacy, fundraising and overall management of national and international non-profit organizations in Washington, DC. A native of South Africa, Onica is based in the CI Office for Africa in Pretoria, South Africa. 


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