- Gender financing still lags globally
- UN is pushing for gender financing inclusion in national development agendas
- Women reinvest 90 percent of income in household and national development efforts – UN
Gender financing is key to any nations development. Notably, aspiration 6 of Agenda 2063 envisions an Africa whose development is people-driven, especially relying on the potential of its women and youth, the African Union underscores.
According to the Alliance for Financial Inclusion, “Worldwide, 1.4 billion people are financially excluded.”
As a result of the limited financial inclusion, women and youth do not get access to financial products and services, and so they lack secure means to save or invest money, and usually rely on informal lenders for credit.
Granted, technological advances help expand access to financial services for women and youth, especially when you consider mobile money services but still, a major gap remains.
The UN asserts; “Investing in financial inclusion has proven an efficient way for countries to raise people out of poverty, reduce inequalities, build sustainable communities, raise education levels, create jobs, ensure economic stability, and promote growth, while maintaining financial system safety and stability.”
As such, UN Women in Tanzania is working with partners to grow gender financing. Among employed strategies is the integration of a systemic gender financing approach.
To this end UN Women in Tanzania is pushing for the formalization of global frameworks, and gender-responsive laws, policies, that advocate commitment to gender financing.
“Achieving financial inclusion requires both the private sector through launching innovative products and services and the public sector through developing effective policy frameworks and national financial inclusion strategies,” UN Women in Tanzania notes.
To this end, UN Women Tanzania is pushing for renewed efforts for Tanzania to uphold the principles of Gender Responsive Budgeting (GRB).
The GRB is considered to be a transformative enabler to transform development outcomes across all sectors.
Through GRB, the UN foresees re- engagement of stakeholders in public finance management to align with the UN Women Strategic Plan (2023-2027).
UN Women in Tanzania is also supporting gender financing through the integration of gender financing in national development agenda.
AU reaffirms commitment to gender financing
In a recent review of the African Women’s Decade on Financial and Economic Inclusion (2020-2030), AU advocate for Gender and Development Issues John Dramani Mahama affirms the need to grow gender financing across the continent.
The review was done earlier this month led by Mahama under the Women, Gender and Youth Directorate of the African Union Commission.
Held during a High-Level Breakfast Meeting on the margins of the 39th Ordinary Session of the Assembly of the African Union in Addis Ababa, the meeting looked at among other things, achievements of the initiative that was convened in 2020 and followed by “The Women and Youth Financial & Economic Inclusion Initiative” of 2023.
The advocate, who is also the President of the Republic of Ghana, asserts that; “Africa’s path to Agenda 2063 is inextricably linked to the economic power of its women and youth.”
Generally speaking, Mahama, along time gender financing advocate, notes that despite major steps been achieved in financial inclusion especially gender financing, there still remain significant gaps when it comes to implementation.
While the African Union has established continental and global normative frameworks such as the Maputo Protocol, the AU Convention on Ending Violence Against Women and Girls (AUCEVAWG) and the African Women’s Decade on Financial and Economic Inclusion (2020-2030), a significant implementation gap remains. WYFEI 2030 (Women and Youth Financial and Economic Inclusion) initiative.
“Structural barriers, including limited access to credit, land, and digital innovation, continue to stall progress,” he notes.
He cites what he describes as a troubling trend: “Progress on gender equality (and financing) is not only stagnating but, in some regions, facing regression due to economic shocks and climate crises.”
Taunted as, the Champion on Gender and Development Issues, Mahama, has moved to revitalize the AU Gender Champion’s Agenda.
The AU Gender Champion’s Agenda is a High-Level meeting meant to bring about “a critical intervention beyond policy declarations,” he asserts.
In his words, the Agenda seeks to secure high-level political and financial commitments that are necessary to ensure gender financing for Africa’s women and youth.
In the review, it is noted that all over the world, women still face significant barriers when it comes to accessing financial services.
“While the gender gap in access to financial services narrowed from 9 percent in 2011 to 6 percent in 2021, it remains significantly wider in many regions, leaving 745 million women financially excluded,” the review decries.
Mahama maintains that, it is only by investing in women’s financial inclusion or what is now commonly referred to as gender financing, that nations can speed up development and ultimately overcome poverty.
“Women own up to one third of small businesses in developing countries, and can be important drivers of economic growth and job creation,” he points out.
According to the AU, there are prevailing structural inequalities that prevent women from accessing finance, which in turn keep them and their nations from achieving their full potential.
Among These are legal, regulatory, societal, and cultural barriers that the AU says “…prevent women from registering businesses, owning land or property, or opening bank accounts.”
On that note, since the African continent is said to have the highest percentage of women entrepreneurs in the world, it follows that lack of gender financing gravely weighs on the continent’s development efforts.
In this regard, it should be noted that, according to the Global Entrepreneurship Monitor (GEM) Women’s Report, “female entrepreneurship rate in sub-Saharan Africa is 25.9 percent of the female adult population, meaning that one in four women starts or manages a business.”
Similarly, the AU also reveals that women typically reinvest up to 90 percent of their income in the education, health and nutrition of their family and community compared to up to only 40 percent for men, a fact that underscores the need for gender financing.
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Gender financing challenges in Africa
Women entrepreneurs face multiple challenges when it comes to accessing finance.
It is estimated that there is a USD 42 billion financing gap for African women across business value chains.
Major limitations to gender financing include the view that lending to women is seen as a high risk which in turn means women face higher interest rates among other borrowing barriers.
Further still, since women often lack traditional collateral and guarantees, it follows that they are less lendable.
Then there is the double edged sword that on one hand you have financial institutions lacking the capacity to respond appropriately to women entrepreneurs, and on the other, women lacking the financial acumen that is needed to meet the needs of financial institutions.
Worse still, in many African countries, legal and regulatory frameworks hamper women’s involvement in private sector growth.
AFAWA’s approach challenges the gender gap in access to finance and liberates women’s entrepreneurial capacity in Africa.
