Bridge fintech gender gap to boost financial inclusion

Fintech

Fintech, the application of digital technology to financial services, is a powerful enabler of financial inclusion as a poverty reduction strategy. But despite its exponential growth and impact, women’s role in digital financial innovation lags behind.

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Fintech, the application of digital technology to financial services, is a powerful enabler of financial inclusion as a poverty reduction strategy. But despite its exponential growth and impact, women’s role in digital financial innovation lags behind.

Recent studies, notably one by the IMF, show only 30 per cent of fintech firms were founded by women globally with a paltry three per cent in Africa—surprisingly low, given the emergence of more women leaders in the financial and technology sectors. We must urgently bridge the gender gap to boost access to banking, insurance, pensions and other financial products by the majority, who are excluded.

Fortunately, Kenya boasts one of the highest fintech penetration rates in Africa and is an acclaimed hub of innovation in financial services.

Notably, Kenyan women are driving some of the most innovative tech solutions. One such luminary, Nelly Cheboi, was named the CNN Hero of the Year 2022 for her work using technology to improve learning outcomes in schools in impoverished communities.

In fintech, Kenyan female trailblazers like Hilda Moraa, award-winning innovator, techpreneur and founder of Pezesha, are proving that the time is ripe for women to play a leading role in re-engineering digital finance. Her firm uses digital credit scoring technology to enable small and medium enterprises to access working capital from financial institutions.

Woman-led fintechs have huge potential to radically transform financial services in Kenya through unique approaches to innovation.

First, having more women leading the fintech agenda infuses new perspectives into the innovation cycle. A 2014 report by McKinsey & Co. suggests that businesses that prioritise gender diversity have a greater ability to innovate products that meet the needs of a diverse consumer spectrum, in the process generating higher returns on investment.

Social change

Secondly, inculcating diversity in fintech is an opportunity to catalyse social change through financial inclusion. Women are proven agents of change. The phenomenal feats of the likes of Cheboi and Moraa are powerful testimony that women can redefine the financial landscape for the greater good.

Lastly, women are better placed to champion gender-based financial inclusion by designing and promoting products that address the unique needs of fellow women and other underserved populations. A Center for Financial Inclusion 2019 study shows woman-led fintechs have more women customers (58 per cent) than those that don’t (35 per cent).

Women have an invaluable role in creating a sustainable, digitally enabled future, powered by innovations that enable more productive, healthier lives while positively contributing to overall well-being.

Closing the gender gap in digital financial services will harness the skills and talents of the many young women in technology and finance and is part of the broader SDG 5, on achieving gender equality and empowering all women and girls, for a peaceful, prosperous and sustainable world.

Ms Krogmann is the CEO of digital insurtech platform mTek Services. [email protected]. @BenteKrogmann