Women bank on cheaper phones for easy payments
Cheap phones have accelerated mobile money service penetration among women in Kenya and helped them to make a major step into financial inclusion.
A study by Bankable Frontier Associates (BFA), a financial services firm, released last month found that women are under-served by the services even while they control domestic budgets that require a regular, secure and efficient mode of savings and payments.
Lack of mobile handsets was identified as one of the hurdles to executing such businesses, even though the respondents vote overwhelmingly for the phones on security and convenience.
“Women recognise the security and privacy of mobile money and in Kenya, for example, 95 per cent of women using mobile remittances rated them as secure and private,” the study says.
“In comparison, only roughly a half of those using personal delivery of cash as their primary method consider it secure and private.”
Apart from Kenya, the study also covered other countries such as Tanzania and Papua New Guinea. In Kenya, the study noted that 13 per cent of women polled were eager to ‘try’ mobile money services but cited lack of handsets as their main reason, while in Tanzania and Papua New Guinea 34 per cent and 10 per cent respectively of those interviewed cited similar difficulty.
While prices of handsets in Kenya have come down as low as Sh1,000 a unit, the study notes that women especially in the rural areas rely on irregular source of incomes such as small businesses, sale of farm produce and casual jobs, which limit access to certain products like phones. Such incomes are sunk into more urgent household budgets, rarely ‘luxuries like phones.
“Incomes are low, irregular and unpredictable to necessitate their visit to established banks where minimum balances are set beyond their reach while also located in major towns unlike mobile money service providers that are right outside their homes,” says the report.
Kenyan women using mobile money services in their day-to-day running of affairs like paying school fees, ‘chama’ deposits, rent and monthly budgets say mobile transfers are “concrete proof” of payment.
Kenya’s four mobile money transfer services are offered by Safaricom’s M-Pesa, Airtel Money, Orange Money and YuCash.
Statistics from the Central Bank of Kenya (CBK) show that the total value of money transacted on the six mobile platforms — including Mobicash and Tangaza — grew by more than 100 per cent from Sh732 billion in 2010 to Sh1.5 trillion at the end of last year.
Kenya has 15 million bank deposit accounts compared to more than 24 million mobile money transfer accounts. M-Pesa controls about 80 per cent of the mobile money transfer market and recently through a partnership with Commercial Bank of Africa CBA launched M-Shwari, a mobile banking product for saving and borrowing through their phone.
The service, which mainly targets micro-savers and borrowers, requires users to have an M-Shwari account, into which they can deposit as low as Sh1 in savings and borrow up to Sh100, 000 payable with a one-off interest rate of 7.5 per cent. All loans are payable within a month of disbursement.
Chief Operating Officer of Fundamo, a Visa company, Aletha Ling, said she believed mobile phone technology is a key component in advancing financial inclusion, providing the excluded, convenient and accessible point of entry to the formal financial system.
“This is particularly true for women, who face additional barriers to entering the financial mainstream and for whom security and privacy are critical issues,” said Ling.
“By working to build relevant services, expand distribution networks and tailor their marketing efforts, the mobile financial services community can create better approaches for reaching this underserved group.”
GSMA Mobile for Development managing director Chris Locke supported the findings saying: “This research clearly demonstrates that women play a critical role in the success of mobile financial services deployment.
“It underscores the fact that services delivered via mobile phone can better meet women’s financial management needs than many of the informal tools they use today and, equally important, provides actionable guidance about how MFS providers can best expand and market their services to better address women’s requirements.”
The study noted that it is crucial that a secure way to save and keep money be put in place to avoid losses incurred from misuse from unplanned expenditures.
Lack of proper savings channels has forced many women to rely on merry-go-round self-help groups for savings which enable them to pay school fees and meet other needs for their often extended families.
“As primary recipients of government-to-person payments, MFS providers who serve women may be better positioned to provide solutions for the emerging wave of payments in the future,” it says.
The Kenya government has disbursed billions of shillings over the years to various women groups via banks and saccos through the Women Enterprise Development Fund.
As a way of reaching all women, the self-help groups encourage members to repay the loans via the mobile phone services that are linked to their groups and banks.
In Kenya, the report notes that absorption of mobile financial services by women is often hindered by lack of identity cards since many do not have identity cards while others have their identity cards kept by their husbands.