Opening remarks by Dr. Natu Mwamba at High-Level Conference “Bridging the Gap: Commitments and Actions for Women’s Financial Inclusion”

Opening remarks by Dr. Natu Mwamba at High-Level Conference “Bridging the Gap: Commitments and Actions for Women’s Financial Inclusion”. Check quotes against delivery.

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Your Excellency, Vice President of the United Republic of Tanzania, Samia Suluhu Hassan,

Executive Director of the Alliance for Financial Inclusion, Dr. Alfred Hannig,

Honorable Ministers,

Honorable Permanent Secretary from the Republic of Burundi,

Honorable Governors of Central Banks,

Honorable Deputy Governors,

Honorable Members of the Financial Inclusion National Council,

Executives and CEO of various institutions,

Distinguished Delegates,

Ladies and Gentlemen,

Good Morning,

I am delighted and feel honored to welcome you all to this grand High-­Level Conference on Women Financial Inclusion. This is a special event that the Bank of Tanzania has jointly organized with Alliance for Financial Inclusion, our partners in the quest to address the barriers that exclude the populace from accessing and using formal financial services.

The special aspect of this event is, the focus on devising smart policy approaches that aspire to address the barriers that affect an important segment of our society i.e. women, and if we get it right, we shall achieve significant financial inclusion in our countries.

This is because the empirical evidence on the impact of women economic activities in micro level have spillover effects to the macro level in a country. Before I explore further in the two aspects on how we can address the barriers that affect women, let me draw some perspectives to the current situation in Tanzania, acknowledging the Government efforts and using recent statistics.

I will focus on the two major aspects of financial inclusion, access and usage of formal financial services. And show how women fair. The Government of the United Republic of Tanzania seriously considers enabling gender and other vulnerable groups to access formal financial services. It is evidenced by the Women and Gender Development Policy of 2000 that aims to ensure gender mainstreaming in all policies, programs and strategies. The Policy is implemented through a National Strategy for Gender Development, which was developed in 2008.  

The outcome of this policy relevant to financial inclusion is the establishment of Tanzania Women’s Bank that provides entrepreneurs training and loans to women entrepreneurs and the introduction of Women’s Development Funds in every district in the country. On our part as the Bank of Tanzania, we have facilitated the licensing and we are supervising the Women’s bank to ensure that it is financially sound to continue deliver its objective of reaching out more women.

We have also established a joint (public and private sector) framework on financial inclusion, which we have recently (February, 2016) approved new measurement framework that includes disaggregated targets on Women Financial Inclusion. We are currently monitoring implementation of the targets under the National Financial Inclusion Council, which requires addressing the specific barriers that affect women to access and use formal financial services.

At this point, I will like to draw your attention to what statistics reveal to us. According to the FinScope survey of 2013, we have noticed that women use less formal financial services compared to men that is 63% men use formal financial services compared to 51.2% women. The level of exclusion is also high amongst women at 31.6% compared with 22.7% men. However, this should not discourage us, for if we take a deep dive in the numbers, we notice interesting perspectives on how women use and access financial services. It is important to pay attention to these details, for in them, we find trends, which I consider opportunities for us to address the following barriers.

(i) Women access to financial services, the barriers and opportunity:

Statistics show us that in terms of connectivity women own less mobile phones 53.2% compared with men 70.5% and yet have access to others mobile phone service at 91%. What is the reason for this low level? It could be affordability if so, is it the cost of the mobile device? Can we have incentives to have women have direct ownership of mobile phones? We notice that 91% of women have access to a mobile phone that necessarily is not theirs.

Women, also lack appropriate information on location of financial access points compared to men. Even for informal services that they use often, for example 36% of men are less likely to know a MFI location compared to 40% of women.

How should we structure our financial awareness programs? Is there a correlation with knowledge of a location to the use of the same? Most likely. We need to find appropriate interventions on awareness and financial literacy relevant to women.

Addressability is another barrier for women to access formal financial services. Women are less likely to have proof of identification as well as proof of residence compared with men. 73.3% of women have proof of a document compared with 81.3% men. We are working on National Identification, and we hope that women aspects will be considered in the process of registration and issuance of the IDs.

(ii) Women usage of financial services, the barriers and opportunity:  

Women like men manage their financial needs by using financial services. But, there are differences based on the needs to address cash flow, risk management, asset building and investments in productivity. Each of the gender has its own unique strengths. This is opportunity in developing specific interventions to enhance usage for women.

Women are strong in prioritizing payments for utility bills, medical expenses, cooking fuel, source of lighting and rent compare to men. That is 34% of women compared with 28% men. This is an opportunity to provide access to connectivity to women to meet the demand for such payment needs, that will not only boost volumes in the digital space but also enable women have access to other capabilities to manage their financial needs.

Women tend to save for a purpose and would use their savings as coping mechanisms than resort to borrowing compare with men. 50% of men would borrow when faced with a risk while 43.4% of women would do the same. This indicates that, risk instruments such as micro-­savings, micro-­insurance and others can be more appealing to women. The drivers of women savings are more skewed towards smoothing out cash flows in terms of living expenses, education or school fees, medical expenses, and other social expenses.

It is therefore imperative that the supply-­side meet women on provision of financial services that are able to address such fluid cash flow needs. Digital financial services offer such opportunity. Women borrow from informal services compared with men. They trust in and have confidence with the informal providers.

The key question is why? Partly it is because, the informal providers are able to meet the demand of women cash-­flow needs, and their volatile and sporadic nature becomes easily accommodated in the informal providers. Can the formal providers mimic this? Can digital technology tap into this opportunity? Yes, they can. We are already seeing in-­roads to this through partnerships that provide micro loans, via banks and MFIs with Mobile network providers. But more needs to be done.

Ladies and Gentlemen:

As I have pointed out, women are significantly active in financial management in their lives. At micro-­level, they are managers of household expenses. There is significant transaction based in this level, despite the low value, the volumes are high and very frequent.

The power of technology can and has shown positive ability to address this need. We can only achieve effective results to tap into these issues and more on broad macro-­level financial needs of women if we have national strategies for financial inclusion with clear objectives and targets that can be measured.

I am so pleased that, we will be discussing this today, and I am confident with the presence of the acclaimed experts like you all we will be able to come up with concrete deliverables that will resonate our regional and international resolve to address financial inclusion issues for women through the AFI fraternity.

Today, we are blessed to have several woman entrepreneurs providing us with exhibition of their products. There products range from mining, spices, textile, accessories and agro processing.

Please find time to visit the exhibitions which are on the ground floor. To conclude, I would like to thank AFI office and BOT team for their tireless efforts and rounds of meetings in trying to make this conference a success;; without forgetting our close partner here in Tanzania, the Financial Sector Deepening Trust (FSDT) for the financial support they have provided that has made it possible for the Bank of Tanzania implement some of the activities related to this conference.

Ladies and Gentlemen:

I would now wish to take this opportunity to humbly request your Excellency Vice President of the United Republic of Tanzania to give a keynote address.

Karibu Mheshimiwa.