The Africa Digital Inclusion Facility approves $1.3 million worth of grants to support women’s digital access to loans and micro-insurance
While women entrepreneurs contribute significantly to economic development and financial integration in Africa through job creation, many of them continue to have difficulty in accessing loans, partly due to their inability to provide immovable collateral, and the roadblock of existing land and property rights laws. Yesterday during International Women’s Day, the African Development Bank announced two grants meant to support two kinds of research that will increase African women’s access to a range of digital financial services including loans and micro-insurance.
The grants, for $1 million and $300,000 respectively, will be disbursed through the Africa Digital Financial Inclusion Facility, a blended finance vehicle supported by the Bank, to two financial technology firms, Pula Advisors Kenya Limited, and M-KOPA Kenya Ltd.
Pula Advisors will use the $1 million for research of social, cultural, and economic factors that impact women farmers’ access to microinsurance in Kenya, Nigeria, and Zambia. Research findings will inform the design and implementation of gender-centric insurance products. The project will be undertaken over a 3-year time frame.
“This grant funding will be used to leverage technology to develop innovative and responsive loan and insurance products that can spur productivity and inclusion, especially for our women smallholder farmers and traders,” said Sheila Okiro, the Bank’s Coordinator for ADFI.
The three-year project will have three phases: product development, piloting, and scaling. The outcomes are expected to benefit 360,000 farmers, 50% of them women, as well as boost farm yields by up to 30%. This will also raise incomes and enhance household and national food security.
M-KOPA will use the $300,000 grant funding for research involving 250 women and 250 men in Kenya’s Kisumu, Eldoret, and Machakos counties. The company will assess the barriers to and opportunities for women’s access to digital financial services and financial literacy programs via smartphone and use the research insights to design a financial services app that is relevant to small-scale women traders.
The project, approved by the Bank on 9 February 2021, will benefit women with no or limited access to financial services that run small informal businesses. Once developed, the mobile app will be used to pilot small loans to women traders.
Both projects align with ADFI’s digital products and innovation and capacity-building intervention pillars as well as its cross-cutting focus on gender inclusion, a thematic running across all its interventions.
The PULA grant approval meets African Development Bank’s strategic goals, including the Ten-Year Strategy, two High-5 priority areas—feed Africa and improve the quality of life for Africans— and the financial inclusion strategies of Kenya, Nigeria, and Zambia. The M-KOPA project is aligned with the Bank’s Affirmative Finance Action for Women in Africa (AFAWA) program that seeks to increase access to finance for women.
ADFI is a pan-African initiative that was developed and designed to accelerate digital financial inclusion throughout Africa, with the goal of ensuring that 332 million more Africans, 60% of them women, gain access to the formal economy. The Facility was formally launched in June 2019 at the Bank’s Annual Meetings in Malabo, Equatorial Guinea.