It is well known that mobile money works well in Africa. If you’ve been paying attention to the continent’s financial and tech sectors over the past ten years, you probably won’t be surprised to hear that it makes up about 70% of the US$1 trillion worth of mobile money worldwide.
You might also not be surprised that 56.8% of Kenya’s GDP now comes from mobile money transactions. Kenya is the country that started the mobile money boom in Africa.
This is significant because, despite improvements in representation (women have more than a third of parliamentary seats in 11 African countries, more than in Europe), gender inequity persists across Africa. While there are evident variances between countries, women across the continent do worse than men in various areas, including earnings, investment, access to finance, and education.
Mobile money cannot solve all these problems alone, but it can help. That needs a lot of money and changes in policy and how people think. But it can make a big difference in women’s lives all over Africa, especially regarding financial participation.
Taking care of business
That’s not just conjecturing, either. Research conducted on behalf of the World Bank shows just how substantial the impact has been. It notes, for example, that mobile money has enabled Kenyan women to move away from subsistence farming and towards business and retail, helping alleviate poverty in the country.
The study also says that mobile phones can help reduce transaction costs, lower travel costs, improve welfare by smoothing out sudden changes in income, make people feel safer, and make it easier to send money home.
But what mobile money can do for female businesses may be the most important thing it does.
Using mobile money increases the likelihood of female-led firms gaining outside funding by 19.8%. This is extremely important given that the average capital investment by female-owned enterprises in Africa is more than six times that of male-owned firms.
According to the same World Bank research, such female-owned enterprises are more likely to invest that money in fixed assets and business expansion, to offer credit to consumers, to demand credit, and to have better ties with suppliers.
A state of constant evolution
It’s also worth noting that mobile money has changed significantly since its arrival on the African continent, improving its ability to empower women even further.
Interoperability improvements, for example, make it easier than ever for people and companies in different countries and using different mobile money systems to send and receive money.
That has huge potential benefits for female entrepreneurs because it lets them sell their products across borders without relying on traditional international e-commerce infrastructure, which can be expensive, uses a lot of resources, and require business owners to travel away from home, often in unsafe or unreliable ways.
Any business that wants to grow and expand needs to find new markets.
Mobile money will keep getting better and more valuable in the future. And if the past is any indication, women will welcome and gain the most from these changes.
Breaking barriers across borders
Financial participation is the best way to make things more equal. Especially for women, this is true. And mobile money has done this kind of inclusion better than almost any other technology.
It has made it easier for people who don’t have bank accounts or who live in remote or rural areas to get financial services that would have taken much longer if they had to depend on traditional financial institutions.
The fact that it’s had such a profound and lasting impact in elevating women across the continent should, therefore, never be underestimated.