Financial services play an instrumental role in economic empowerment, but many women are still prevented from reaping the benefits. Women in Côte d’Ivoire are 45% more likely to be excluded from financial services than men. In fact, 9 out of 10 women who are uneducated and living in rural areas are financially excluded.
In the Adzopé region of Côte d’Ivoire, an informal, women-led community banking service called Village Savings and Loan (VSL) is combating financial exclusion. Every week, women in the village meet to contribute to the two accounts VSL runs. One is a personal savings account where they can store their money, and the other is a group account for loans among the group.
VSL launched four years ago. With this service in place, women in the community are gaining control of their finances and reaping the benefits of that power. With this service in place, women in this community are able to access loans and save money when banks deny them service.
Empowerment pays off
Christine Sawadogo has seen first-hand how important this service is — and on more than one occasion.
She arrived in Côte d’Ivoire with her husband 27 years ago. She farmed three hectares of land to provide for her six children.
When the VSL opened, with support from Cargill, Christine’s opportunities expanded through the support it offered. First, she borrowed money for supplies so that she could sell cakes. The money she earned not only allowed her to pay back the loan, but also to invest in two pigs for her farm. Now, she has 11 pigs, improving her ability to make money.
The VSL helped Christine a second time when her eldest child didn’t have the funds to finish high school. With a small loan, Christine was able to pay the tuition fees and allow her son to return to school. He’s now studying at the University of Ouagadougou in Burkina Faso.
Now, Christine is continuing to invest in her farm and her family. She’s currently working to build a shelter for her pigs and chickens, knowing that the VSL is available if she needs help growing her business.
Fighting for financial inclusion
The informal banking service created by these women tackles the serious problem of financial exclusion. Globally, almost one billion women don’t have access to formal banking services. As a result, women are 2.5 times more likely to use an informal banking service than men.
Not being able to access financial services limits the ability to manage money and make financial decisions.
There are many ways to improve access to financial services. Improving access to technology and mobile banking would help sidestep traditional banking, allowing people to bank regardless of how close they are to a bank.
There’s also a tie between limited economic participation and use of banking services. When women are unable to work outside the home — due to cultural norms or legal barriers — they are much less likely to hold bank accounts. Combatting discriminatory laws and practices would increase economic participation, leading to more use of financial services.
This ultimately uplifts not just the lives of these women, but also their families, communities, and global economies more broadly. In fact, if all gender gaps closed, the global GDP could increase by up to US$12-28 trillion. Creating equality, including financial equality, has immense impact on changing the world for the better.
As these problems and other problems are solved, women will be empowered through equal access to financial freedom. Christine’s success is a powerful example of what women can achieve when they have equal access to financing.