“When women do better, economies do better.”- IMF Chief, Christine Lagarde. Women play a crucial role in the economic development of their families and many of them turn to be an entrepreneur for succour times of financial hardships. Unfortunately, things turned out to be the opposite. The detrimental impact of the coronavirus on women will automatically intensify the massive socio-economic shock worldwide. Given their main role in heavily affected sectors such as small manufacturing, trade and women-led small and medium sized enterprises have been among the hardest hit by the crisis.
This Covid-19 pandemic will leave an incredible mark in history for global lockdowns it has triggered. It has already become an economic and labour market shock which has impacted not only supply but also demand. For instance, projections for Africa’s 2020 growth have dropped from 3.9% before the crisis to 0.4% or lower. The IIRR, International Institute of Rural Reconstruction, a company established to help women entrepreneurs, claimed that women are stressed due to the “coronavirus monster.” Low sales, reduced or closed markets, limited mobility, no income alternatives, and no safety nets are the devastating feedback cited by the women. The Black Swan event is anticipated to have far-reaching consequences that will be felt for years to come. In Rwanda, the use of liquid cash has been discouraged from reducing the spread of the virus. However, 66% of the Sub-Saharan Africa’s population is still unbanked. Hence, where does that leave the rural women?
The solution lies in embracing the future: The Digital world. Strategies have been employed to help the women-led companies to recover from the impacts of Covid-19. As women are having mobility issues, the adoption of digital financial inclusion will help reduce these constraints that the pandemic is causing. Due to this unpredictable lockdown, restrictions as well as human interaction, digital financial services will enable these women entrepreneurs the ability to engage in financial transactions without having to travel outside their communities, homes or businesses.
Since 2016, the IIRR, along with the UN women in Uganda and fintechs, has piloted the digitalisation of village savings and credit associations to allow women entrepreneur to have digital transaction history to boost credit access. This initiative has enabled mobile-to-wallet and wallet-to bank transactions, thereby minimising the use of cash. Now, the need to explore such programs has become more critical to enable rural SMEs to survive in this period of crisis. Strengthening the capacity from the governments and private sector can revive safety nets and women-friendly supply chains for rural, allowing women-led SMEs to boost business growth. This will eventually require these rural women entrepreneurs to become part of the digital economy. For instance, a bank in Argentina made a robust and existing plan for women centered on 4 pillars:
- Provide online training and improve financial literacy
- Create a network for opportunities
- Provide unique financial products including insurance products, loans, pension schemes, leasing arrangements
- Offer credit card with special discounts
With the unpredictability of the business environment, rural businesses need to be encouraged to improve ICT-based business continuity planning. This should begin with regulators, financial institutions and telecommunication companies to enable infrastructure to be able to allow for a proactive regulatory framework for digital financing services to thrive in the rural areas which are most underserved.
Partnering with NanoBNK
NanoBNK, our fintech company is offering its services and solutions to help during this Covid-19 Pandemic in delivering Digital Transformation and omnichannel presence through its Digital Banking solutions: Internet Banking, Mobile Banking, Bill Payment, Agency Banking and Kiosk Banking.
