In March of this year, Enhancing Financial Inclusion and Advancement (EFInA) convened its International Women’s Month gathering under the theme, ‘Gather, Gain & Grow.’ It was a much-needed conversation focused on bridging the divide between women’s savings associations, financial regulatory agencies, development organisations, and financial service providers. This conversation highlighted an understated fact: women’s savings associations are among the most trusted and resilient sources of informal financial inclusion at different stages of a woman’s financial journey, especially for women in rural and underserved communities in Nigeria.
In Nigeria, we have the Esusu, Adashe, and Ajo models. These models have also become the defunct financial inclusion systems in regions deeply affected by conflict and the climate crisis, as formal financial providers struggle to find the business case to serve that demographic when their priorities are anchored on profitability and sustainability. According to Nigeria’s A2F (2023) survey, informal financial service providers continue to play an important role in expanding overall financial inclusion, particularly in rural agricultural areas, among women, and in the Southeastern part of Nigeria. It goes further to state that women are also more likely to rely only on informal providers compared to men. The result is a persistent gender gap in formal financial inclusion.
Across many African societies, there is a deeply rooted value often described through the concept of Ubuntu: a philosophy of collective wellbeing, shared responsibility, and mutual support. This is a philosophy that forms the normative structures of the different societal and financial systems that communities have created to ensure interconnected progress. In other parts of the continent, in South Africa, women have stokvels. Stokvels are informal, community-based savings or investment clubs for women where members contribute a fixed amount of money (weekly, monthly, or annually) to a shared pool. Shared funds are then used for groceries, burial funds, or large purchases. These groups are built on trust and a constitution, a similar feature that is prevalent in our own saving groups and associations. Nedbank, a leading financial provider in Africa, has thoughtfully learned from the Stokvel model and has innovatively integrated it into the formal financial system, showing its commitment to supporting community-based savings groups. Through continuous learning and innovation, the bank has successfully introduced additional features like secure fund safeguarding, digitised contributions, payouts, and transparent governance. NedBank was able to innovate and create for women, not create ‘AT’ them.
In Kenya, we have what we call the ‘Chamas’. They are micro-saving groups that Kenyan women use to pool savings. It began in the 1960s, and followed the values of ‘harambee’, the Kiswahili word for ‘all pull together.’ This community approach helps sustain livelihoods, alleviate poverty in rural and remote areas and help foster small-scale investments by families. Data records that 40% of Kenyans engage Chamas groups. The Kenya M-Chama program worked to engage the pockets of exclusion standing at 22% through the Kenya Post Office Savings Bank, or Postbank, teamed with the WSBI Scale2Save programme to upscale a project designed to increase women’s financial inclusion. The joint project, focused on rural areas, developed a doorstep service called ‘bank-in-a-bag’, comprising a laptop and tablet computer, enabling Postbank staff to visit women’s groups, often in rural and remote locations, open individual mobile phone savings and payments accounts for group members, in addition to their engagement in M-Chama group savings. The initiative surpassed initial project goals by reaching 9,000 Chama groups onboarded and over 88,000 individual accounts opened under Waridi accounts (specific women accounts).
EFInA’s A2F 2023 survey has established that a lack of trust in financial service providers is one of the most important factors driving financial exclusion among women. It is also one of the leading reasons for their reduced access to financial services overall, and lower usage of specific products such as savings and borrowing. What these comparisons have revealed is that, at the core of women’s associations, lies something that formal financial systems have struggled to engineer: trust.
These women’s savings associations have built working systems rooted in cultural values, trust, accountability, social cohesion, and holistic social structures. Through these models, women who are locked out of the formal financial system have been able to save, borrow, invest, and support one another in ways that formal institutions have struggled to replicate at the rural levels. What we need to understand is that women’s associations, cooperative societies, are not just financial groupings. They are communities of accountability, living embodiments of cultural values and support systems where relationships precede transactions, and trust reduces risk. In these groups, women come together not only in times of stability but especially in moments of uncertainty. They pool resources, extend credit to one another, and create informal safety nets that support household resilience, small business growth, health challenges and educational needs. Another significant point is that these associations are not filling a gap temporarily but providing another model of financial inclusion that can be adapted or innovated upon and eventually embedded within the formal financial inclusion systems, as seen in Kenya.
This is visible in everyday life. In churches and mosques, women’s groups regularly organise contributions for members’ milestones or emergencies. In markets and neighbourhoods, savings circles and cooperatives enable women to rotate funds, invest in trade, and absorb shocks- credit that is usually hard to get in formal financial systems due to the strict KYC requirements, rigid institutional processes or sizable collateral; particularly in patriarchal contexts where asset ownership for women is limited. What these women’s associations have been able to do is create parallel informal financial systems. These informal parallel financial systems have proven to be highly adaptive, flexible, culturally and contextually intelligent. The question is: what can financial institutions learn from culturally embedded women-led systems?
Formal financial service providers can adapt the following:
- Women’s savings associations are built on trust and social capital. Formal financial systems rely heavily on sizable collateral, identity checks and rigid compliance processes. Financial service providers can innovate by expanding the bracket of trust by partnering with existing women’s groups as trusted intermediaries and using group validation as a complementary form of verification.
- Formal financial institutions can design group-based lending models, recognising social collateral as a risk mitigation tool and structuring products that align with existing group dynamics. This would enable formal financial institutions to leverage existing collective accountability and strength within the groups.
- Financial services can be delivered through trusted groups because products introduced via these groups are seen to be more trusted, adopted and adapted. Women, especially in rural and remote areas, might reject a financial product due to past experiences but accept the same product when it comes through a trusted collective.
Across Africa, we have learned that when formal financial service providers design products that align with existing informal practices, they thrive. The solutions can scale because they are plugged into culturally relevant embedded systems that already exist and are part of the social fabric of the community. Models that are rooted in trust, embedded in community and responsive to lived realities have served to financially include the unbanked who exist in the margins and pockets of society.
Financial inclusion efforts have often been built on the assumption that women need to be brought into these systems rather than making the systems adapt to them. From research, it has adjusted our perspective and the way we look and interact with women’s savings groups. It is time we recognise these systems as legitimate, design with them and embed their principles into formal financial infrastructure.
If we understand that women’s associations can be positioned as culturally relevant institutional forms of intelligence rather than just informal stopgaps, then the future of financial inclusion appears different.
