SPECIAL REPORT: SheInvest to Deliver $1.1b to Women in Africa, Access Bank’s “Beta Friends” Bringing Digital Savings to Market Sellers, Women Move Slowly to Mobile Money: All at European Microfinance Week

AtEuropean Microfinance Platform Friday’s session on gender and financial inclusion during European Microfinance Week, Enrico Pini of the European Investment Bank (EIB) argued that, “It’s smart business,” to boost opportunities for women. Such is the motivation for EIB’s SheInvest program, which is scheduled to mobilize EUR 1 billion (USD 1.1 billion) to invest in entrepreneurship, financial inclusion, digital inclusion and climate-resilience efforts for African women.

Njideka Nwabueze of Nigeria’s Access Bank described her company’s product, “Beta,” which translates as “Good” in the local language. She said that many poor women use informal savings schemes because they do not believe that banks offer products that meet their needs. One of these women’s priorities is easy access to funds. Women who sell products in a market, for example, risk losing a good selling spot if they leave during the day to visit a bank. Also, bank lines can be very long.

This is why, six years ago, Access launched Beta, an interest-bearing savings account that leverages mobile money but is delivered through agents, known as “Beta friends.” For low-balance accounts, no signature or identification document is needed. The Beta friend simply types the new customer’s basic information into the system. There are no periodic or per-transaction fees. However, after the initial product launch, Access did institute a start-up fee to cover the cost of the debit card that each account holder receives. This gives customers access to services via automated teller machines (ATMs), in addition to via bank branches or Beta friends. Through the Beta friend, who visits the user at her place of business, a user can open an account, withdraw cash or deposit cash. Beta friends also seek out new customers and function as a “friendly face” to encourage customers to keep using the accounts over time. The number of customers per Beta friend is capped at 300.

A major sign of success is that Beta customers have asked for second accounts because they are using their first account as a transactional account, and they want another one to dedicate to longer term savings. Users also have asked for other services such as loans and payments, confirming Access’s belief that the financial inclusion arena is a “market for growth.”

Echoing some of the features of Beta, Elisabeth Ballreich of Women’s World Banking praised the implementation of tiered know-your-customer (KYC) requirements, as well as using agents to meet customers in their homes and places of business. She also encouraged tailoring products to customers’ needs in terms of language, payment habits and other characteristics. As an example of cultural needs, Ms Ballreich points out that in many parts of the world, such as much of Pakistan, it is not acceptable to send male agents to solicit women to enroll in financial services, which requires the collection of personal information such as phone numbers. Ms Nwabueze noted that many women in northern Nigeria scarcely leave their homes at all, so female agents must visit them at home in order to reach them.

On a broader level, Ms Ballreich noted that the gender gap between men’s and women’s account ownership has persisted at 9 percent even as the rate of women’s account ownership rose from 58 percent to 65 percent from 2011 to 2018. She attributed this to women tending to have less free time than men and being more tied to the home by various cultural pressures. On average, women also are less literate as well as less likely to have identification documentation, a regular income or a mobile phone. In addition, Ms Ballreich said, women are usually slower than men to place trust in financial institutions and new technologies.

Ron Everts of PHB Development described an initiative by Ahli Microfinance Company (AMC) of Jordan to launch two new efforts: (1) offering mobile payments and disbursements via mobile network operators (MNOs) and (2) moving loan officers to using tablet computers so they can perform credit scoring in the field. During the process, AMC learned the following lessons: (1) the switch to digital services requires a clear business case to drive the process; (2) incorporation into the entire strategy of the business is key; and (3) a slow rate of introduction is helpful because digitization reaches into all of the business’s processes. While it was not initially the goal of the implementations to increase financial access for women, that is what happened. And Mr Everts noted that boosting social performance is correlated with financial sustainability. This is consistent with the observation, by Yasser El Jasouli of MFI Insight Analytics, that men have higher rates of default than do women, at least in rural areas.

Bridget Dougherty of BRAC International illustrated how women’s preferences sometimes surprise practitioners. When the mobile money service bKash started to gain market share in Bangladesh, BRAC staff were concerned that clients would start drawing down their savings balances from BRAC and move their funds to bKash. However, only 15 percent of women chose to do so. Echoing Ms Ballreich, Ms Dougherty said, “The switch to digital is not automatic, especially for women.”

Ms Dougherty went on to note that while designing a new financial technology (fintech) product may seem like a challenge, getting an organization’s computer system to integrate with a new fintech feature is often much more difficult. At the same time, organizations should beware of the difficulty of acclimating staff to new products. Given these challenges, she said, the question is “not if, but when the organization will invest in MIS [management information systems] and staff training.”

An audience member asked how regulators can help, beyond creating tiered KYC requirements, which have looser policies for lower-balance accounts. Mr Everts suggested the wider adoption of electronic signatures, which are not yet accepted in Jordan, among other countries. Ms Dougherty suggested ending taxes on mobile money transactions, such as exist in Kenya. She also pointed out that in Myanmar, SIM cards for mobile phones are not linked with individuals’ identity documents, which complicates the KYC process. Ms Ballreich suggested broader usage of “regulatory sandboxes,” which allow time-delimited testing of new ideas.

This feature is part of a sponsored series on European Microfinance Week, which took place from November 20 through November 22, 2019. The event is held each year by e-MFP, and MicroCapital has been engaged to promote and document the event on-site each year since 2012.

Sources and Additional Resources

European Microfinance Week 2019
https://registration.european-microfinance-week.eu/emw2019

NextBillion: Three Key Sessions from European Microfinance Week 2019
https://nextbillion.net/three-key-sessions-from-european-microfinance-week-2019/

MicroCapital coverage of this year’s European Microfinance Week and past years’ since 2012
https://www.microcapital.org/category/european-microfinance-week/

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