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Empowering Women: The Rise of Digital Finance in Sub-Saharan Africa

Writer's picture: Emil GasparyanEmil Gasparyan

In recent years, digital finance has emerged as a powerful tool for enhancing women's financial inclusion in sub-Saharan Africa. With the share of women owning financial accounts more than doubling to 49% from 2011 to 2021, mobile money services have played a pivotal role in this transformation. This article explores the impact of digital finance on women's empowerment and the challenges that remain.

Key Takeaways

  • The share of women with financial accounts in sub-Saharan Africa increased to 49% by 2021.

  • Mobile money accounts have significantly contributed to this growth, with notable increases in countries like Cameroon and Ghana.

  • Financial inclusion leads to greater personal safety, control over household resources, and improved access to emergency funds.

  • Barriers such as phone ownership and lack of identification documents still hinder access for many women.

  • Continued efforts are needed to ensure that the benefits of digital finance reach all women in the region.

The Growth of Financial Inclusion

According to data from the Global Findex, the percentage of women in sub-Saharan Africa who own a financial account has surged over the past decade. This increase is largely attributed to the rise of mobile money services, which allow women to manage their finances more conveniently and securely.

For instance, in Cameroon, the percentage of women with financial accounts jumped from 30% in 2017 to 49% in 2021, with a remarkable 26 percentage point increase in mobile money accounts. Similarly, Ghana saw an increase from 54% to over 63%, with a 21 percentage point rise in mobile money usage.

Benefits of Financial Inclusion

The advantages of having access to financial accounts are profound for women. Key benefits include:

  • Increased Personal Safety: Women are less exposed to theft when they have their own accounts.

  • Greater Control: Financial accounts provide women with more say over household spending.

  • Emergency Access: Women can receive funds from friends and family more easily in times of need.

As women become more familiar with using their accounts, they are increasingly utilizing them for various purposes, such as making and receiving digital payments, saving, and borrowing. This shift is encouraging many to transition from informal savings methods to formal accounts, enhancing their financial security.

Challenges to Overcome

Despite the progress, significant barriers remain. Approximately 50% of women in sub-Saharan Africa are still unbanked, primarily due to:

  • Mobile Phone Ownership: Many women lack access to mobile phones, which are essential for mobile money services.

  • Identification Issues: A significant number of unbanked women do not possess official government-issued IDs, preventing them from opening accounts.

For example, in Niger, only 45% of women have a mobile phone, and just 56% have an ID. Addressing these barriers is crucial for expanding financial inclusion.

The Path Forward

To ensure that the momentum of financial inclusion continues, it is essential for governments and financial providers to:

  • Enhance Access: Focus on increasing women's access to mobile phones and identification documents.

  • Design User-Friendly Products: Create financial products that are safe and easy for women to use independently.

  • Implement Consumer Protection Policies: Establish strong consumer protection programs to safeguard women's financial interests.

Digital finance is proving to be a vital enabler of economic empowerment for women in sub-Saharan Africa. By addressing existing barriers and continuing to invest in inclusive financial infrastructure, the region can ensure that all women benefit from the opportunities that digital finance offers.

Sources

  • Digital finance boosting women’s financial inclusion in sub-Saharan Africa: Emerging evidence, Brookings.

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