Making sense of money: empowering women through finance

Empowerment takes many forms, and those working to address inequalities around the world are using an array of interventions to support vulnerable, marginalised, and disadvantaged groups.

The key to successful and sustainable inequality interventions is to identify and support initiatives that enable marginalised individuals to empower themselves. True empowerment, whether of women, racial minorities, indigenous peoples, or groups with low socioeconomic status, must shift power into the hands of those groups. In this spirit, two Cultivate Africa’s Future (CultiAF) projects co-funded by the Canadian International Development Research Centre (IDRC) and the Australian Centre for International Agricultural Research (ACIAR) have been using financing mechanisms as an empowerment tool.

Financial support for fish technology

The CultiAF fisheries project in Malawi is an example of how financing is being used to improve women’s livelihoods. This project is empowering women to capitalise on improved methods of processing fish — methods that are more environmentally friendly, effective, and profitable than traditional ones. But for the technologies to be fully realized, women need access to finance.

The project has established an innovative partnership with FDH Bank, a private commercial bank, to provide loans to fish processors. As part of the project’s gender empowerment strategy, female fish processors are given a reduced interest rate. So far, FDH Bank has lent MK 19.6 million (CA$31, 893/AUD$32,564) to six fish processors — three of whom are women — who have used it to build six solar dryers, five smoking kilns, and two warehouses.

In Mangochi district, 28-year-old Atusaye Msiska has accessed a MK 2.9 million (CA$4,740/AUD$4,815) financing agreement from FDH Bank. The financing, provided in the form of materials, has enabled Atusaye to construct a solar tent dryer, fish smoking kiln, and a fish processing shelter. The processing shelter is roofed, meaning Atusaye can fry or boil her purchased fish without fear of inclement weather during the rainy season. Protection from flies and contaminants has also improved her products’ quality and shelf-life.

“When the business environment is fine and demand is high, I make a profit margin amounting to MK 50,000 [CA$81/AUD$83] per week,” says Atusaye, who is a single mother. “With this profit, I take care of my child and buy household essentials.” Atusaye is also using the loan money to pay tuition for a diploma course at the local college, as well as accommodation, food, and expenses such as books.

Adidya Mtenje, another beneficiary, has been in the fish processing business for almost 20 years. She received a MK 2.9 million (CA$4,740/AUD$4,815) FDH Bank loan. It paid for supplies to build a solar tent dryer and smoking kiln. Adidya says the provision of improved fish-processing methods is hugely significant to the lives of fish processors. Women in particular are major beneficiaries, as they can now compete in the fish trade and penetrate up-market chain stores with higher-quality products. With reduced-rate loans, women can also expand and improve their business operations.

The success of the FDH Bank loans will indirectly benefit all women. As the CultiAF women show they can pay back loans in a timely, reliable manner, FDH Bank and others will see that lending money to women business owners is a secure option.

Improving Ugandan women’s livelihoods

The precooked beans initiatives in Kenya and Uganda are working hard to address gender inequality in their value chains and communities. The Uganda initiative is developing a digital framework that pays farmers for their produce directly. This ensures that female farmers receive all the money they earn without transactions being detoured through their husbands. The system empowers women as autonomous business owners, enabling them to register their businesses in their own name and access profits independently so they can make their own decisions about how to use them.

Women are also benefiting from the project’s initiative to supply improved bean variety seeds to local farmers, as well as training in good agronomy practices and improved financial management. One beneficiary is Nalongo Nabukeera Mary, a smallholder farmer in Uganda and mother of eight children. When Mary began farming improved bean varieties supplied by CultiAF, she saw huge improvements in her productivity. The project’s initiatives enabled her to harvest 470 kg of beans after planting only 30 kg of seeds. She earned USh 940,000 (CA$326/AUD$332) as a result.

Mary was selected to represent her community at the bean innovation platform in 2016, where she was able to acquire funds from Masaka Microfinance Development Cooperative Trust (MAMIDECOT). MAMIDECOT provides financial support to women and men for agricultural investment and other developmental purposes. Mary used her loan to buy a motorcycle for her business, pay school fees for her children, and ensure the nutritional security of her family. She has since paid off the loan.

“My family has been able to improve our production and consumption of high iron and zinc beans,” she enthuses. “This has made us food, nutrition and income secure.”

Empowerment as a priority

Regardless of the specific intervention, these projects demonstrate that enabling access to finance is not only empowering women as entrepreneurs, but also benefitting their families and communities. When inequality is addressed and empowerment made a priority, the future is bright — not only for women but for society as a whole.