• Authored By: Rehema Kahunde
Street vending in Kampala
14 Mar 2023

As the world commemorates International Women’s Day on March 8, 2023, the Economic Policy Research Centre (EPRC) adds its voice to stress the significance of this year’s theme on the role played by digital financial inclusion on gender equality.

Uganda has registered substantial improvement in digital financial inclusion, but there are still significant challenges to overcome in ensuring inclusivity in the transformation to a digital society especially for the Ugandan woman.

An ongoing study by EPRC, together with the African Economic Research Consortium (AERC), points to the need to invest in gender-focused interventions to bridge the digital divide between men and women in Uganda.

Preliminary findings on the gender digital financial divide in Uganda show a wide disparity between women and men in the use of digital financial services, with females 30% less likely to use digital financial transactions.

Similarly, the Uganda National Financial Inclusion Strategy (NFIS) 2017-2022 indicates that 25% of women are active users of mobile money compared to 38% of men. The portion of men that has formal insurance is five times that of women. The strategy further shows reveals that men are more likely to save at a bank compared to women. This illustrates the magnitude of disparity.

The gender gap in accessing digital financial services has been attributed to cultural, socio-economic, and institutional factors such as lower levels of education amongst women; lower formal employment opportunities for women, limited access to information on some of the available financial services; and the society stereotypes that have reserved certain roles for women, locking them in unpaid domestic care work.

This year’s theme, “DigitALL: Innovation and technology for gender equality”, rhymes with the direction that this country aspires to achieve. Various initiatives have been undertaken by the government of Uganda to increase financial inclusion. These include the passing of the Financial Inclusion Act Amendment Bill in 2016 which provided a legal basis for a host of new business models such as agent banking which have created ease in accessing and using services such as mobile money, opening bank accounts, among others.

Most of these interventions, however, are gender neutral aiming at increasing digital usage with thin focus on increasing the percentage of women using such services. Digital connectivity – that is something as basic as mobile phone ownership and internet access – increases financial inclusion. Also, studies have shown women struggle to meet the Know Your Customer (KYC) requirements, limiting their access to digital financial services. Easy access to national identity cards is important – women are usually held back in domestic care work and cannot afford spending an entire day in the queue to apply for the national ID, which is a permanent requirement to access most digital services.

As such, there is need for public investment in gender-focused interventions to achieve inclusive digital financial inclusion. Ensuring that KYC requirements are sensitive to the informal sectors operations—where women predominate—is critical. Lowering mobile money tax and transaction costs is important. This, coupled with sensitisation on affordable ways to use digital financial services, will improve access and usage. The mere perception that digital financial services are too expensive not just leads to the exclusion of women but also a sizeable number of men too.

Interventions to lower transaction and internet costs to widen usage and access to digital financial services, incentivising women to take up insurance will provide a significant step to bridge the gulf. Trust that the transaction is safe, faster and ability to do it online will free time for women which can be used in more productive activities.

This article was first published in the print version of Observer Newspaper on March 8, 2023

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