Empowering Women: Celebrating Financial Inclusion this Women's Month

According to the World Bank, women encounter significant barriers that hinder their access to financial services. Factors such as limited financial literacy, lack of formal identification documents, societal norms, and cultural constraints often discourage women from using financial products. Unequal access to technology worsens the obstacles for women in accessing financial services.

In a 2023 paper published in Women’s Report titled The current state of women’s entrepreneurship in South Africa”, the authors highlight that South African women consistently experience disadvantages in the labour market, including a higher risk of unemployment. The official unemployment rate in South Africa is now 32.9% (Q1 of 2023), and the unemployment rate for black African women stands at 39.9%.

Overcoming the gender gap in terms of financial inclusion has significant potential, not just from the perspective of equity and fairness, but for its socio-economic benefits. The South African Women Entrepreneurs Job Creators Survey found that women tend to engage in activities in industries that enhance job creation, showing that women’s entrepreneurship is critical to boosting the country’s economy.

According to the Global Entrepreneurship Monitor, women in Sub-Saharan Africa aged 25–34 are more involved in entrepreneurial activities than men, and women with graduate education are 30% more active in start-ups than men with graduate education. This means that supporting women translates to investing in some of the most qualified entrepreneurs in the region and making better use of the educational resources in African countries.

One of the most effective ways of making financial services available to previously unbanked or marginalised communities is through the adoption of digital wallets. The rise of digital wallets in South Africa has been significant, with these tools now owning around 20% of the online payments market.

The use of digital wallets offers many benefits to South Africans, providing them with simplicity, convenience, and security. This is especially advantageous for migrants, small business owners, and women. Various initiatives have demonstrated the positive effects of digital wallets on women's financial empowerment. For instance, the Financial Sector Conduct Authority (FSCA) has highlighted programmes where women entrepreneurs utilise digital wallets to effectively manage their businesses, resulting in improved financial stability and independence.

"Digital wallets offer a safer and more convenient way to make payments, eliminating the need to carry cash and, in some cases, physical cards," says Jonathan Holden, COO of SOLmate, a leading South African digital wallet provider. "This is particularly advantageous for women, as it provides them with greater financial control and security. Digital wallets offer women a convenient and secure way to manage their finances without the need for a traditional bank account. This accessibility is crucial for women in rural areas or those with limited access to banking services, helping them to participate more actively in the economy."

Digital wallets have a significant impact in making international remittances more affordable, convenient, and secure, especially for migrant workers sending money to their families. According to the United Nations, women account for about 70% of informal cross-border trading in Africa. The World Economic Forum reported that migrants sent home $800 billion in remittances in 2022. Improving access to remittances for foreign national women in South Africa has a substantial and broad impact on their well-being and that of their families.

Approximately half of SOLmate’s clients are women,” Holden concludes, “and we are proud to be playing a part in enabling greater financial inclusion for women across South Africa seeking to support families and create opportunities to lead more empowered lives. By making financial services more accessible, digital wallets empower women to participate more fully in economic activities, whether through entrepreneurship or managing household finances.”