Authors: Benedikt Wahler, partner
Date: June 26th, 2024
Area Covered: Africa, Sub-Saharan Africa
For the last four years, ConsumerCentriX, in collaboration with the International Project Consult (IPC) and the African Management Institute, has supported the implementation of the Africa Women Rising Initiative (AWRI), funded by the European Investment Bank (EIB). In mid-June, Benedikt Wahler and Dörte Weidig, partners at ConsumerCentriX and IPC, respectively, delivered a “Knowledge Lab” session in Luxembourg to the EIB community to share the large-scale impacts and lessons from this work.
This initiative aims to empower women economically in Sub-Saharan Africa by increasing their access to finance and capacity-building resources, particularly for women entrepreneurs, owners, and leaders in micro, small, and medium enterprises (MSMEs), in alignment with the 2X Challenge criteria.
AWRI Pilots and Builds a Foundation for Mobilizing Large-Scale Gender Finance
As part of the broader “SheInvest” initiative, through which the EIB is mobilizing EUR 2 billion of funding for gender-responsive investments in Africa, AWRI was launched in April 2020. This occurred just as Africa was experiencing the first wave of the COVID-19 pandemic to complement these funds with technical assistance (TA) from the consortium partners.
From the ConsumerCentriX team and our professional network, we contributed the Team Lead, interim team lead, and several senior experts on key factors for the success of gender-inclusive finance: unsecured and cashflow-based lending, market research, strategy and value proposition design, as well as facilitating the work of cross-functional teams to pilot new approaches. Our data team also helped ensure the recommendations reflected a sound basis of analysis and insights.
ConsumerCentriX Managing Director Benedikt Wahler, who stepped up from key expert to interim Team Lead during a medical leave, feels that “AWRI really showed once more the full breadth of expertise we were able to mobilize and the deep bench of colleagues to make one more multi-year, multi-country, and multi-institution TA a success.” It was another instance of a close and successful collaboration with IPC, alongside current joint activities on “Youth-in-Business” and the upcoming Central Asia WE Finance Code.
Thanks to AWRI, nine financial intermediaries (FIs) across four countries – Uganda, Rwanda, Senegal, and Côte d’Ivoire – received customized assistance based on a thorough assessment of their needs, the realities of their clients, and their local market context. In addition to four commercial banks (Bank of Kigali, Ecobank Group, Housing Finance Bank, Atlantic Business International), four microfinance institutions (Pride Microfinance, Centenary Bank, Baobab Senegal, Baobab Côte d’Ivoire), and one development bank (Development Bank of Rwanda) were supported on gender finance.
Before this work started, ConsumerCentriX pioneered a data-driven approach to identifying the right countries for gender finance interventions like AWRI. Using a proprietary benchmarking tool that considers four main dimensions of women’s economic, social, and financial inclusion, we screened and scored 45 economies in Sub-Saharan Africa.
The implementation focused on two main components: “Banking on Change” and “Market Maker.” “Banking on Change” targeted the supply side by enhancing the capability of financial institutions to meet the needs of women entrepreneurs with gender-intelligent products and services, while “Market Maker” focused on the demand side, strengthening women entrepreneurs’ financial and business skills and their networks.
Through the Market Maker initiative, AWRI significantly enhanced women entrepreneurs’ financial literacy and business management skills. Training programs reached 1,087 women, covering essential topics such as financial literacy, record-keeping, customer service, and soft skills. Forty per cent of the participating businesswomen subsequently obtained loans. This initiative also developed 11 non-financial services (NFS) modules tailored to the needs of women entrepreneurs, further supporting their business growth and sustainability. The impact of these efforts was evident, with many women reporting improved business practices and enhanced financial management skills.
The AWRI’s Banking on Change component focused on strengthening the capabilities of partner financial institutions (PFIs) to better serve women entrepreneurs. This included conducting comprehensive institutional diagnostics and capacity needs assessments, followed by tailored technical assistance packages delivered by a team of international and local experts. At two institutions, unsecured loan products and the respective credit processes were developed for the first time. Two others deployed their first-ever savings products tailored to businesswomen, leading to strong growth in their funding base.
Even though most improved solutions were still in the early stages of roll-out, the results were strongly positive. The number and volume of loans grew faster for women than men at all institutions. The portfolios now include 35,400 more women borrowers and EUR 67 million. Compared to the pre-AWRI baseline, our team helped advance the frontiers of inclusion: 16,000 women borrowers who otherwise would not have been expected to receive loans and EUR 40 million in loan volume. All of this was achieved while not merely preserving but even expanding the better repayment performance of women borrowers.
Why Gender Finance is the Right Approach for Impact and Commercial Success
The 2X Collaborative, of which EIB is a founding member, documents the growing momentum among the community of development finance institutions and related stakeholders that a dedicated focus on women (also known as a Gender Lens) delivers better impact. The evidence collected over the past decade by programs like the IFC’s “Banking on Women” or the Financial Alliance for Women from pioneering banks, MFIs, and fintechs around the world makes it clear that there is also a strong strategic and business case for targeting women and women SMEs as clients. At ConsumerCentriX, this reality and our expertise on what that should mean in practice drive around two-thirds of our work.
For those who care about impact, the case for being intentional in focusing on women should be straightforward: though women and men are diverse among themselves, on the criteria that matter for their ability to access and use conventional financial services, women score lower on average.
In the regional context of AWRI in Sub-Saharan Africa, women entrepreneurs face numerous challenges in operating and growing their businesses: less revenue and often smaller businesses in low-margin sectors, lower levels of secondary education and less professional experience in the formal sector, less likely to have mentors, and more limited access to capacity building, supportive networks, and market information. They are also often far less able to post the kind of assets required as collateral to obtain loans.
To truly deliver on the ambition of building an inclusive financial system that can power sustainable and broad-based economic growth, solutions ought to be benchmarked against the realities of such women – in other words, be “gender-intelligent.” To genuinely aim for reaching the marginalized parts among women and other groups, those experiencing the highest levels of such challenges should set the tone, thereby aiming for solutions that stand a chance of being “gender-transformative,” i.e., over time, wearing down these challenges rather than just working around them. The reality of supposedly fair “gender-neutral” approaches is that they are bound to fall short of most women and even a good portion of male users of financial services. They are designed for a type of client who is just not representative of the population at large – let alone those at the frontier of the financial system. (see charts below)
In the AWRI program – as in most of our work – we were tasked with working with for-profit financial service providers. There is now a strong basis of evidence that women and women’s businesses constitute a clear business opportunity. But business bankers tend to ask why they’d need to become “gender-intelligent” in their work. Is not a business and a leasing contract a leasing contract, whoever sits on the client side of the relationship?
For the ConsumerCentriX team, the answer is clear: to actually seize that opportunity, bank executives do well to look closer and remind themselves that what sets MSMEs apart is not that they’re smaller than big firms. It’s the human(s) at the heart of these businesses. The owners and managers whose ambitions, outlook, and idiosyncrasies shape what the business will end up doing – and this is why gender patterns matter. In the space of finance, such patterns emerge 1) from the legal, family, and socio-cultural circumstances in which women have to operate, 2) the mentality and attitudes they bring to financial questions, and 3) the way in which their cashflows are (much more strongly) exposed to lifecycle events like marriage, childbirth, divorce, or care for elderly parents. (see below)
Notably, the success stories featured at events like the Financial Alliance for Women’s Annual Summit come from institutions that have taken such insights into action. This year’s edition in London included two Champions, Access Bank Group from Nigeria and Kenya Commercial Bank, who referred to business banking solutions that emerged from their work with our own Anna Gincherman and Benedikt Wahler.
As Benedikt summed it up: “With the now concluded AWRI program, our team is proud to have laid excellent foundations for seeing more such pioneering examples scale up in Africa.”
