Women’s financial literacy benefits us all — here’s how

Zata Amamatou, a former peanut patty street vendor turned spice wholesaler thanks to micro-loans made available to her.

Zata Amamatou, a former peanut patty street vendor turned spice wholesaler thanks to micro-loans. Image: Togo Ministry of Financial Inclusion and the Informal Sector

Mazamesso Assih
Minister, Togo Ministry for Financial Inclusion and the Informal Sector
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Education, Gender and Work

  • African women face obstacles to starting and growing businesses that must be overcome to ensure equitable growth
  • 76% of Africans, many of them women, see entrepreneurship as a good career choice
  • Togo has some of the most financially literate women in Africa, and the whole country benefits from their work

As early as the 1940s, and despite a myriad of challenges, Togolese women have built and led successful businesses.

Walking the streets of Lomé, Togo’s bustling capital, it is not unlikely that one may cross paths with a Nana Benz. Dressed to the nines, they stand in their shops, filled to the brim with colourful fabric, peddling their wares and running their businesses. Deriving their names from a combination of “na” meaning “mother” in the Mina language, and “Benz” for the Mercedes Benz cars they like to drive, these women have long been an illustration of female resilience and ingenuity.

Immense progress is being made globally in female inclusion, and perhaps most critically women now have better access to education. But when looking at how female-led businesses perform, they still lag behind their male counterparts.

These tenacious women do not lack motivation, perseverance or skill — so why the discrepancy?

Financial literacy among African women

In theory, African women can start a business. But in practice, they are not as well-equipped to expand and secure their enterprises in the long run. This has a lot to do with the fact that women consistently score lower than men on financial literacy measures.

Financial literacy, meaning the ability to understand and effectively use financial tools, is the key to making informed financial decisions. It helps individuals make smart investments, save for retirement, and build resilience to economic shocks, like the one endured globally during the COVID-19 pandemic.

Instead of living day-to-day and thus incurring higher costs, financially literate people are able to plan strategically for the long term. As such, a lack of financial knowledge prevents women from accumulating wealth and it ultimately stops them from securing their future.

These barriers not only affect women’s financial wellbeing but also have consequences on a much larger scale. In Africa, for example, the path to entrepreneurship attracts much of the continent’s dynamic and growing youth demographic. Almost 80% of Africans see it as a good career choice, the highest rate in the world, and Africa is the only region where women are more likely to be self-employed than men.

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Africa's entrepreneurial generation

With the rise of female entrepreneurship and growing female participation in the workforce, improving financial literacy for women is more important than ever. When these women unlock their economic potential and access equal opportunities, they contribute to their community’s development and participate in the country’s economic growth.

A virtuous cycle thus starts: female entrepreneurs are much more likely to employ women than their male counterparts. In fact, about 75% of their workers are women, while that figure drops to 20% in male-owned businesses.

By ensuring inclusive access to financial education, we can make the most of a dynamic and promising youth and deliver public resources that promise a positive impact for society as a whole. As such, women’s financial literacy is not only the key to helping them achieve their potential but an essential driver of economic growth and vital to Africa’s future.

That is why the national financial inclusion strategy developed by Togo’s Ministry for Financial Inclusion and the Informal Sector places such emphasis on financial education for women.

In 2020, Togo recorded its highest ever financial inclusion rate (81.5%) among West African Economic and Monetary Union countries. Its National Fund for Inclusive Finance, targeting women and youth, has benefited more than 832,000 women. In the past eight years, they have made up 71% of the total number of beneficiaries and received 59% of the available funds.


Benefits of financial education

Women have turned their small-scale businesses into large successful initiatives.

Take the case of Zata Amamatou, a former peanut patty street vendor with a 5th-grade education who received two micro-loans. Two of her children have now successfully finished high school, her business is evolving and she is turning into a spice wholesaler.

Women are becoming increasingly informed and, equipped with their commendable courage and persistence, are now successfully navigating and taking advantage of the financial tools at their disposal. More than 70% of Togolese female business owners have borrowed money for their businesses — that is above Nigeria’s 60% and South Africa’s 45%.

Togo understands and acts upon the knowledge that supporting women is vital — and it shows. According to a report by the World Bank, Togo is the only country in the West African Economic and Monetary Union where female-run microenterprises earn more profit than those run by men.

Financial literacy is not a silver bullet for economic growth, and it must be delivered hand in hand with a robust financial system and efficient regulatory environment — but it is the necessary starting point of a road that leads to long term prosperity.

The challenge for the country’s public and private sectors now is to invest in financial literacy that will deepen the impact of financial inclusion. The sooner we rally collectively to bridge the financial literacy gender gap, the sooner Togo and any other countries that follow suit will see a real difference in global financial wellbeing — a benefit enjoyed by the entrepreneurs, the women and men they employ and their families.

Togo is the only country in the West Africa Economic and Monetary Union in which female-run businesses make more money than those run by men.
Togo is the only country in the West Africa Economic and Monetary Union in which female-run businesses make more money than those run by men. Image: World Bank
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