A common belief is that women's empowerment is simply about giving women a seat at the table and a voice. But true empowerment is much more than that: it's about giving women the tools and opportunities to shape their futures. A key area is economic empowerment. This allows us to experience a better quality of life and enable healthy communities to thrive and grow.
A common barrier women face, especially in developing countries like Kenya, is the lack of access to capital to finance their businesses. According to data from Financial Sector Deepening Kenya, financial access between men and women has shrunk from 8.5% in 2016 to 4.2% in 2021, but there is still a long way to go to close the gender gap. Without the financial means to start and grow a business, women remain constrained in their ability to become economically empowered. This limits their ability to realize their potential and reduces their agency in determining their quality of life.
The access gap extends beyond Kenya to other parts of the continent. According to the International Monetary Fund, only 37 percent of women in sub-Saharan Africa have access to a bank account, compared to 48 percent of men, and this gap has widened in recent years.
In a continent that represents a new frontier of economic growth and opportunity, it is interesting to note that half of the population does not have access to the formal financial system. As long as barriers exist for women to actively contribute to the economy, the continent's return on investment will decline.
When you invest in women, your returns are exponentially higher. Research shows that women are more likely to reinvest up to 90% of their income into household finances, such as health, education, and home improvements. This builds human capital and enables generational progress.
When women have more economic power, the economy grows. According to McKinsey, advancing women's equality could increase the world's GDP by $12 trillion by 2025. Investing in women is strategic and can pay dividends in terms of economic and social development. Results are felt both in the short and long term. Women represent an underserved market segment and represent a huge business opportunity as well as a vehicle for driving economic growth.
Even more powerful is the ripple effect of women's empowerment across generations. Research shows that female role models inspire girls to achieve more educationally, economically, and socially. This will create a snowball effect on gender equality and inclusive growth.
Digital financial services are essential to achieving this outcome and have great potential to expand access and utilization for women. Mobile Her Money platforms like M-Pesa are reaching low-income women in remote areas and giving them access to financial services for the first time. The same is true for informal savings groups that build economic resilience at the community level. Fintech solutions are also emerging as innovative means of promoting inclusion.
Financial institutions are the main channels through which capital flows in any economy. They have the power to unlock women's economic potential and can capitalize on this by harnessing their entrepreneurial spirit. For example, SBM Bank is empowering women through its USD 10 million risk-sharing agreement with the African Guarantee Fund to increase lending to women-led SMEs.
Mr Muthui is the Director of Consumer Banking at SBM Bank Kenya.
