M-Pesa platform mobilizing rural women save, access credit

10Jul 2018
The Guardian
M-Pesa platform mobilizing rural women save, access credit

The socio-economic environment for women in rural Tanzania, while it has seen major improvements in recent years, is one that is still fraught with many challenges. Women are still marginalized in terms of financial inclusion and they face serious obstacles in accessing formal financial-

institutions and services.
According to the World Bank’s Global Findex data, 17.1 percent of women held an account at a financial institution in 2014 versus 21.1 percent of men. The long distances they have to travel poses an actual challenge in accessing these services. Stringent legislations and regulations as well as low levels of financial literacy and awareness continue to widen the financial inclusion gap and have been considered to be among the main barriers.

A good example resulting from the lack of misinformation is the notion of saving money under mattresses. For years, a lot of women living in rural areas have relied on numerous hiding places in their homes as the only safe place to store their hard earned cash.

This form of saving makes them prone to pilfering as well as indiscriminate spending. Since cash is readily available at hand, the temptation is always there to spend it for any and all eventualities that arise and thus preventing effective budgeting.

With the advent of mobile money services, such as Vodacom Tanzania’s M-Pesa platform, a more convenient and effective financial tool became available to rural Tanzanian women. Due to the fact that a significant proportion of Tanzanian women have access to mobile phones, this has meant that a good number of them now can save their money more securely and can budget their expenditure more productively.

This gives them more control over their finances and is one way that the mobile money systems in the country been instrumental in increasing financial inclusion for rural women.

These mobile money services have been widely adopted, not just because of the national network coverage of the operators, but also in large part, due to the wide network of agents which has meant a major reduction in the distances that women have to cover in order to access their money. It has also reduced to zero the distances they have to cover in order to make payments and remittances.

This has given them more time to engage in economically productive activities. This agency network has also been a source of opportunity for the women since many now operate as agents themselves and thus earn a commission on all transactions that pass through them.

Since 2008 when Vodacom Tanzania started the first mobile money service in the country, these platforms have been adding and improving their services offered constantly to the point that now they have become viable alternatives to established banks.

This means that more of the formal financial services that were not accessible to women in rural areas are now within their reach. An example would be a spin-off service that allows customers to have a savings account attached to their main mobile money account that earns interest and also offers micro-loans at very affordable rates.

Furthermore, these mobile money platforms are being used as channels for economic empowerment for women in the country by various NGO’s and even some of the mobile operators themselves.

For one thing, it has simplified the creation of women’s groups and made the running of such groups much more practical.

These groups are in turn used to deliver critically needed skills and training. One mobile operator working with a national NGO has been running financial management skills training for women farmers in rural areas with great success, with these groups recording significant savings and growth of their businesses.

On the social side of the equation, these mobile money platforms are enabling the delivery of many creative solutions to social issues faced by women in the country. Take for instance, The Vodacom Tanzania Foundation which, through the M-Pesa platform, distributes funds to a national network of Ambassadors whose function is to identify women suffering from Obstetric Fistula and finance their travel to CCBRT satellite hospitals for surgery and treatment.

This effort means that a lot of women who were previously ostracized by their communities can now re-integrate and participate fully in all economic and social activities and contribute to the development of their families and the nation at large.

Thus the introduction of mobile money services such as Vodacom’s M-Pesa have brought about increased financial and social stability to women in rural communities across the country and these operators are to be commended and encouraged to maintain these services while they innovate new facilities that will build on the successes achieved so far in the on-going effort to better the lives of women in Tanzania.

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