Exploring the Power of Savings for Women: Evidence-based Report Series on Women’s Economic Empowerment

5 April, 2018

Original source: SHE COUNTS

Rose Kibona, a 59-year-old widow in the city of Mbeya, Tanzania, has a stall in an open market where she sells soft drinks and prepared meals during the day, adding beer in the evenings. She recently took a six-week business training course from TechnoServe, which included instruction on how to access M-Pawa, a new Vodafone mobile savings platform. When we met her, she spoke well of the training, especially about how it had taught her to separate her business income from personal income and keep business records. She was using M-Pawa to save, though she had been saving informally for years.

She invited us to her home to see her savings strategy. From her (locked) bedroom she unearthed three saving tools: a glass jar with coins, a gigantic treasure trove of coins overflowing the bag containing them, and a wooden lockbox a carpenter had built for her. When the glass jar was full, she would transfer those coins to the coins in the bag, which she planned to use to buy a car. The lockbox savings were for emergencies, and M-Pawa was for her business investments.

She exemplifies the mindful saving behavior of many women entrepreneurs—micro and small—in developing countries, using mental discipline and ingenuity to save. Mentally allocating or earmarking savings for a purpose makes the money less fungible and helps her feel less obligated to share available money with others.

Saving is important for her, but she should not have to rely on insecure jars, bags, or lockboxes to save. These methods are inefficient, impractical, and potentially dangerous. How can we bring her fully into the formal banking system? More generally, how can we help bridge the gap between women and banks?

This series uses empirical evidence to address these issues. Mobile savings hold great promise, because they can considerably reduce transaction costs that can be unduly heavy for women. Two questions guide us: how can we encourage more women microentrepreneurs to access formal savings accounts, and is mobile saving a particularly fitting solution?

Click here to access the full report.

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