“Banking on Women” with Access to Microsavings

The following piece, “Banking on Women,” was published in USA Today‘s special supplement “Investing in Women & Girls” on Friday, March 4.

In Blantyre, Malawi, dozens of women sell potatoes in the marketplace. But Grace Msowoya and her business partner Betty Louhana stand out. Frustrated by their small profit margins, they became the first women to take the bold move of becoming distributors in their local market. Every two weeks, they withdraw money from their savings account to rent a truck. They hire a driver and spend several days on the road to get potatoes directly from farmers, which they then sell to other vendors.

Before Grace had access to a savings account, she kept her hard-earned money hidden in her home. Now with her biometric-enabled card, Grace can safely deposit and easily access her money at a banking kiosk just 100 meters from her business.

The ability to save money in a secure place, and to earn interest instead of paying it, is crucial to the success of women like Grace. Unfortunately, a large majority of women in the developing world are forced to keep what little money they may have in cash because of the high minimum deposits and costly formal identification required by most banks. Without access to banks, they often turn to local deposit takers who charge up to 20% per day to hold their money. According to the Consultative Group to Assist the Poor (CGAP), nearly three billion people living in poverty lack the basic financial services essential for them to manage their precarious lives.

In the developing world, women shoulder a huge amount of responsibility—caring for children, fetching water, growing food, preparing meals—and often running small businesses. This keeps them busy from early morning to late at night, and ties them to their homes. It takes a variety of technologies and partners to bring the bank to these women’s doorsteps.

Telecom companies, including M-PESA, MTN and Zain, and groups such as Bankable Frontier, are working with microsavings organizations to expand access to financial services in previously underserved areas like rural farming villages and urban sprawling markets.

Satellite branches, mobile banks, ATMs and point-of-sale devices offer safe banking access just minutes from a client’s home or business. Cell phones allow women to manage their money almost anywhere. These innovative delivery channels are particularly important to women in rural areas who are afraid to carry cash to banks that are miles away. In addition, struggling entrepreneurs with narrow profit margins can ill afford the transportation costs and time it takes to make weekly trips to distant towns.

Women like Grace who once lived in extreme poverty with little or no hope for the future can now invest in their children’s education. When they have enough money saved, they put a better roof over their heads or a concrete floor under their feet. They often start new businesses, employ neighbors and become local leaders. In addition, these savings are put to work through business loans and training to other women in their community.

Claudia Kennedy, the first woman U.S. Army lieutenant general and a member of the American Security Project, speaks to the difference these women can make not only in their communities, but in their countries and the world. “Because women have not held economic and political parity with men, it is women who hold the strongest potential to become leaders and change agents. If we can dramatically impact the economic power and influence of women, I believe we can increase global stability and alleviate poverty. The payoff is not only prosperity, but peace.”

For more on how access to Opportunity’s savings products empower our women clients, go to our Banking on Women resource page at opportunity.org/change.