This article was originally published in French on the FinDev Portal.
Financial inclusion of Ivorian women in rural areas: a key challenge to improving their autonomy and access
In Côte d'Ivoire, rural populations, and in particular women, have limited or inadequate access to traditional financial services. Only 37% of people in rural areas have an account at a financial institution and only 2% have borrowed money from a formal institution, compared to 36% who borrowed money from informal sources (Global Findex 2017). Since opening in 2012, Advans Côte d'Ivoire has been working with rural cocoa communities. In 2015, the institution formed a partnership with the NGO CARE with the goal of enhancing financial inclusion for members of village associations that are mainly composed of women (about 85%). Members of village associations have restricted access to bank branches due to their geographical position and often feel they are not eligible for traditional banking services due to lack of adequate information and access. Thus, the main objective of Advans project is to increase the capacity of these communities to save, mobilise and manage their own resources, and then redistribute the latter, this through the provision of formal financial services.
How does Advans promote the financial inclusion of these populations through the digitisation of traditional tontines?
CARE, our partner, approaches populations excluded from the banking system and helps to create and formalise Village Savings and Loan Associations (VSLAs). These are groups of 15-30 people (mostly women), that are very organised, meeting weekly and saving regularly. Savings are kept in a physical cash box. The money is then redistributed in the form of loans to finance income-generating activities to deal with emergencies. Advans intervenes once these groups have been assessed by CARE and are considered established enough to be put in contact with a financial institution ("linkage"). Advans then offers the VSLAs a group bank account and remunerated individual accounts. Advans also guarantees easy access to these accounts through its mobile service, accessible on a USSD menu, allowing groups to make free deposits or withdrawals from their savings account via their Mobile Money account. Advans financial inclusion field agents train groups to use their accounts and the mobile service. In addition, after a successful pilot, Advans is currently deploying a group loan offer (for groups with a sufficient savings history) to finance activities of VSLA members.
An innovative concept that facilitates savings collection and formalises the loan process
The service offered by Advans is innovative. Firstly, it relies on partnerships with key players like CARE who have a strong link with rural communities. In addition, it capitalises on the links between people in the community and traditional savings practices while allowing the formalisation and digitisation of the savings and group loans processes. By offering remunerated bank accounts, Advans enables members of VSLAs to secure and grow their savings, to enter the formal system and to be introduced to the use of digital financial services. Loan products offered by Advans are also preferable to the informal loans offered by the group because the former allow VSLAs to access larger amounts, for longer periods and at much lower interest rates than informal loans.
Below find some key lessons Advans has drawn from this experience:
- Rural populations need long-term support on understanding the importance of saving and using the mobile service; therefore, financial inclusion agents play an indispensable role in the progressive empowerment of clients.
- Loans encourage savings and saving encourages members to access loans: VSLAs are more motivated to save via the mobile service knowing they will have access to a loan; finally, once they have obtained a loan they tend to make more transactions on their savings accounts.
- Female-dominated groups save more than other groups. Empowering women who manage VSLAs also enables them to gain autonomy and leadership, and thus participate fully in their family and community life.
What results and objectives for the future?
Since the project's launch, Advans has worked with CARE, IDH and other players in the agricultural value chains on enhancing financial inclusion for village associations. These partnerships have been sucessful and in 2018, 3,800 VSLA members saved more than € 10,000. In addition, 17 groups obtained loans for a total of € 30,000. Advans is currently working on the optimisation of its mobile banking service, the improvement of financial education tools for associations and the possible setting up of third-party agents close to rural areas in order to facilitate cash deposits and withdrawals. By the end of the year, Advans hopes to reach 400 additional groups, representing nearly 10,000 people, of which 85% will be female.