Women-centric Financial Products: Meeting Women’s Needs

According to the Finscope Survey 2016, the overall gender gap in financial inclusion in Rwanda is relatively small. In terms of the total rate of financial inclusion, women show a difference of 4 percentage points.

Eighty-six percent of women are financially included compared to 90 percent of men. However, women still lack access to formal financial products, especially in rural areas.

Based on this finding, Access to Finance Rwanda (AFR) felt the need to ensure that more women are financially included. They concluded that the process of inclusion had to begin with the design of appropriate products and services that meet the needs of women.

AFR commissioned MSC to support three selected financial institutions—Bank of Kigali, Umwalimu SACCO, and Copedu through product development processes. The focus of the assignment was the design of women-centric financial products.

Additionally, MSC also trained five local consultants in Rwanda to equip them with skills in market research and product development. As a result, the institutions designed three new gender-centric products, two credit products, and one savings product.

We share some key insights on the product and behavioral preferences of the women customers whom we developed these products in the following section.

Loan repayment

Women have financial needs and have the capacity to save and repay their loans.

The large numbers of women who signed up for the product demonstrated this.

Over six months, women accessed a credit portfolio of RWF 1 billion in one institution. Another institution registered a repayment rate of 100 percent.

We cannot ignore this performance. It confirms that women are a viable segment that FIs can focus on.

Individual lending as opposed to group lending

Most women prefer to access loans as individuals and not through the group lending approach.

They prefer to take responsibility for their own debt and not for others. In one of the FIs, the product had been designed to allow women access in groups of five or individually, but all of them opted to access the loans as individuals.

The women reasoned that they wished to access the loans individually. They explained that they found it difficult to make comparatively less responsible groupmates repay the loan committedly.

The women did not want to take on the burden of having to repay the loans for members who defaulted.

Reasons for the decline of loans

The key reasons for loans declined by the bank were poor banking history and negative listing by the Credit Reference Bureau (CRB).

Many of the women, especially in the rural areas do not save formally with FIs and thus had no banking history records. They, however, saved informally in their savings groups, SACCOs, via mobile money at their homes, or even jointly with their spouses, among other methods. The financial institutions that considered banking history as a major determinant of accessing the loan, therefore, had to be flexible.

The negative listing by CRB resulted from the fact that the women had guaranteed their colleagues while borrowing as a group, and eventually the colleagues had defaulted. As guarantors, therefore, they too were blacklisted. This could explain the reservation against borrowing through the group lending approach.

Spousal consent

Women prefer to access these loans without the consent of their spouses.

Most financial institutions require women customers to get consent from their spouse before accessing the loan—regardless of the loan amount. The women, however, explained that they were happy if they had the opportunity to access money without their spouse’s consent.