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New Insights into the Financial Behaviour of Men and Women in Six African Countries

17.06.2013Sharissa Funk

Financial exclusion in Africa is high, but financial exclusion of African women is even higher: While about one third of the population is completely excluded from the financial sector in Botswana, Namibia and Uganda, this figure amounts to more than half of the population in Rwanda, Malawi and Zambia – and in all six countries more women than men do not have access to services such as bank accounts or payments.

Why is there a persistent gap in the usage of financial services by men and women? Do women find it harder to access formal financial services? What are the obstacles that women face when approaching these providers? What could be the reasons for choosing informal services over formal ones?

The recent set of country studies conducted by GIZ on behalf of the German Ministry for Economic Cooperation and Development (BMZ) can help us gain a better insight into the very different financial lives that men and women lead in each of the six countries.

The largest gender gaps were found in the usage of formal savings products, particularly in Botswana (14.6 % more men than women access formal financial services), Uganda (12%), Rwanda (9.5%), and Zambia (9%). Compared with credit and insurance, the difference in the ‘savings’ category is relatively high. Several reasons were identified in the course of the research: First, women tend to have lower incomes and higher expenses. They are often financially responsible for the whole family and therefore have less money available for savings. If they do save, they prefer informal savings groups over formal financial institutions. Women feel more comfortable talking about their financial matters to people they know, such as other women from the same neighbourhood who often set up these informal savings groups. It also is a question of trust: In some countries, people mistrust in institutions because of bad experiences in the past, e.g. of depositors losing money because of bank closures. In Zambia, only 22% of adults trust in banks. Besides, when income is irregular and excess cash is hard to find, flexible repayment schedules and regular small payments are very important advantages of informal services. The costs of transport and time for travelling to the nearest bank, particularly in rural areas, are other issues that can easily be overcome by using local informal services.

With the exception of Rwanda, the financial sectors in the countries researched have a very high concentration of foreign banks, mainly located in urban centres. Formal service providers, particularly these foreign-owned banks, find it hard to adapt to the local market. They still take a rather conservative lending approach, focusing on salaried employees with stable income, and requesting collateral. Since more men than women have salaried jobs, access to formal financial services is difficult for women. For example, by asking for payslips as precondition for loan appraisal, banks automatically exclude the self-employed and non-salaried segments of the work force. Obtaining significant assets that can serve as collateral (e.g. land property) is another major constraint for women, as customary laws still prevail in many regions of the countries studied. These laws can require that the head of the household (mostly the husband) is registered as the property owner, not his wife. Often customary inheritance laws are also found to be discriminatory against women.  

Similar constraints can be found with micro and small enterprises: formal banks tend to focus on medium or large businesses that have attained a certain degree of formalisation. Many women-owned enterprises tend to be small or micro, are often informal, and face severe difficulties in accessing formal credit – for example if they are not able to provide financial statements and proof of formal business registration. At the same time, almost no financial institutions target this niche of underserved potential clients – unmet demand among women-owned enterprises in sub-Saharan Africa ranges from an estimated 30% for medium-sized enterprises to more than 60% for micro enterprises.  

Insurance providers, but also banks and other formal financial institutions, fail to target women as a clientele; e.g. in advertisements that clearly address the male (working) population. Long and complicated claims procedures and a widespread perception that the costs are too high for no apparent (immediate) do not help to convince people to buy insurance either. Providers need to react by improving their marketing and costumer education and by making their processes more transparent.  

Action needs to be taken, not only by service providers but also by regulators. On April 25th 2013, Central Bank Governors and high-level political and private-sector decision makers from the SADC region were invited to the South African Reserve Bank to discuss the ‘Advancing African Women’s Financial Inclusion’ policy recommendations which were drafted during a MFW4A expert round table in 2012. Mrs Graça Machel, the founder of the New Faces New Voices network summed up the recommendations as follows: ‘Regulators and policy-makers need to play a more transformative or developmental role in deepening financial access for women, and financial institutions need to have clear strategies for targeting women in order to expand their access to financial services[…]”. The conference encouraged participants to take the discussions to the national level and push forward Women’s Financial Inclusion in Africa.  

If you would like to find out more about why men and women don’t use financial products in the same way and what should be put on the policy agenda in each of the countries, please have a look at our Synthesis Report or the detailed country reports:

Botswana Rwanda Namibia Uganda Malawi Zambia


Judith Frickenstein is financial sector advisor at GIZ’s programme Promoting Financial Sector Dialogue in Africa: Making Finance Work for Africa, where she is in charge of Gender and Agricultural Finance. Prior to her current position she led the economic empowerment component of GIZ’s gender sector programme, where she helped to design a regional programme in the MENA region and consulted economic development programmes in Albania, Montenegro and Uganda. Before joining GTZ (now GIZ) in 2007, Judith worked for the Retail Development Group in Cologne, Germany and for the German DEVK insurance company. She holds a diploma in economics from the University of Cologne and completed a vocational traineeship at an insurance company.

Sharissa Funk is part of the GIZ team supporting the Partnership MFW4A. She mostly focuses on gender finance issues in her work. Previously, Sharissa worked on agricultural finance with the Frankfurt School of Finance and Management and with Peruvian agricultural cooperatives and Microfinance Institutions for Oikocredit, a social investor. She holds an Economics degree from University of Tuebingen, Germany.


Microinsurance in Africa: Dramatic growth but still challenges ahead!

03.06.2013Claudia Huber

The importance of risk management mechanisms and with it microinsurance has grown tremendously over the past couple of years. Whereas all different stakeholders involved in financial sector development have focused on credit in the earlier days and later on as well on savings and payments, nowadays insurance is generally mentioned at the same time with the more traditional financial services and products. Its importance for poor people’s lives and in the alleviation and prevention of poverty has been recognized widely.

The emerging stage of development of microinsurance and its complexity make it difficult to get an overview of what is happening in microinsurance in Africa. The Landscape of Microinsurance in Africa 2012, a new study by Making Finance Work for Africa (MFW4A) and the Munich Re Foundation, supported by the African Development Bank, ILO’s Microinsurance Innovation Facility and the Microinsurance Network, is an effort to take stock of the current state of and recent trends in the microinsurance market in Africa. The study identifies gaps in the access to and the supply of microinsurance, an emerging industry in Africa that involves many stakeholders ranging from insurers to delivery channels, policy makers, regulators, and donors.

The research finds that at the end of 2011 more than 44 million people or properties are covered by microinsurance products. Compared to 2008, the African microinsurance industry has grown by 200%. In other words, microinsurance products were accessed by 4.4% of all Africans. Still, a huge challenge remains: 38 million insured people are concentrated in Eastern and Southern Africa, while in Central and North Africa the microinsurance sector remains rather limited. South Africa alone accounts for 60% of coverage and only eight more countries cover more than one million lives each. Together, these nine countries account for approximately 90% of total coverage in Africa. West Africa has experienced the highest growth rate since 2008, growing by more than 250% to cover 4.4 million.

Due to the culturally-rooted widespread use of funeral insurance in Southern Africa, life insurance still dominates the market, covering 34 million people. Additionally, credit life products cover almost 9 million lives, showing some growth, although slower than before. Health microinsurance coverage has mostly stagnated with just 2.4 million Africans covered. Though still in a nascent stage covering 1 million people only, property and agriculture products have experienced important innovations. Contrary to the supply analysis, focus group studies show that the demand people express centers around health, agriculture, accident and property—demand that is largely unmet.  

More than three quarters of all microinsurance risk carriers are community-based organizations. However, they only account for 9% of all covered lives and properties identified. The second most common type of microinsurance providers are regulated commercial insurers (13% of organizations identified). Yet, they account for 78% of all covered lives and properties. These numbers show that massive growth in the microinsurance sector will need to come from the commercial insurance industry, whereas member groups remain the largest channel assuring outreach to otherwise uncovered customers.

The major growth experienced in microinsurance in Africa, should however not hide the fact that over 650 million Africans live in countries where microinsurance products are either absent or coverage is below 1% of total population. There is massive potential for microinsurance to expand across the continent, not just in terms of volumes but also in terms of innovative products offering both real value to clients and a business case for insurers. The research carried out shows that:

·         New distribution channels, such as life insurance products embedded into savings accounts or bundled into mobile phone subscriptions, have helped microinsurance to grow in terms of covered lives in the past two years. These types of developments hold great potential to dramatically increase coverage, but also raise questions from the perspectives of consumer education, protection, and regulation.

·         While the collected data do not allow for sophisticated client value analysis, the reported loss ratios seem to offer ample room for improved products if the microinsurance industry is truly to serve the low-income population effectively.

·         Although microinsurance regulation does not seem to have driven market development, the absence of clear legal frameworks has been identified as a barrier for expansion. Some African countries are currently developing legal frameworks specific to microinsurance, however, there is room for increased attention to this area. Clarity in the microinsurance legal framework is an important component to insurers’ having the confidence to invest in the paradigm shift needed for microinsurance success. Legal ambiguity is holding back innovative expansion.

·         Microinsurance providers were confident about the past and future short-term growth of the sector but expressed concern regarding consumer knowledge, their own knowledge of the low-income population’s needs, and product affordability.

·         The maturation of the microinsurance “industry” is evolutionary. Good examples are seen by others. They get copied, sometimes improved. Slowly but surely the industry progresses, more people are covered, better products are offered, and clients, insurers, distribution channels and others benefit. Continued and expanded inputs from donors, governments and others should help to accelerate the rate of microinsurance expansion – in terms of volumes, products and value.

If you want to find out more about microinsurance in Africa check out the interactive map and the Comprehensive Study as well as short Briefing Notes in English and French on or

Claudia Huber is advisor in Financial Systems Development at the Gesellschaft für Internationale Zusammenarbeit (GIZ), where she is responsible for the microinsurance component within the team managing the German contribution to the partnership Making Finance Work for Africa (MFW4A). Claudia is a member of the Advisory Committee of the Access to Insurance Initiative (A2ii) and a member of the Joint Working Group on Regulation, Supervision and Policy of the IAIS and the Microinsurance Network.


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