Increasing Women’s Financial inclusion in Zambia – Part 1

Jan 29, 2018 | All, Digital Financial Services, Women & Youth

NOTE: This post is part of the Blog Series,Increasing women’s financial inclusion in Zambia. Access previous posts in this series:   

Part 2: Increasing Women’s Financial Inclusion in Zambia 
Part 3: Who Influences Women Smallholder Farmers in Zambia? 
Part 4: For Women Smallholders in Zambia, Financial Inclusion is Not “One-Size-Fits-All” 


Financial Inclusion: What is the Status for Women Smallholder Farmers in Zambia?

Women smallholder farmers are some of the most financially underserved people in Zambia. Countrywide, 42.6% of women are financially excluded compared to 38.8% of men. Of those who have no access to formal financial services, more than 75% are poor smallholder farmers, including about twice as many women as men. But as AFA’s Zambia Ecosystem White Paper points out, digital technology can be a powerful tool to reach smallholder farmers with financial services, information, and market linkages that can increase their productivity and their incomes.  

“Financial services are important for building assets or productive activities, mitigating the risk of unexpected events, and managing day-to-day cash flow,” says Christabell Makokha, AFA’s Country Director in Zambia. “When bundled with services that increase farming productivity and access to markets, they can go a long way to improving livelihoods and life options for women farmers.”  

In Zambia, mobile phones have played a significant role in increasing smallholder financial inclusion. Mobile-enabled services are the most frequently used non-bank financial services, according to FinScope, and from 2009 to 2015, electronic payments and money transfers more than doubled, rising from 15.5%-36.8%.   

Yet, the use of mobile money is still in its early phases in Zambia. The proportion of men using digital banking services is just under 15%, and that figure is a meager 9.5% among women.   

The AgriFin Accelerate program is collaborating with female smallholders, financial service providers, and other relevant stakeholders to fully understand the range of barriers that limit financial service access, and to devise appropriate solutions that can hasten greater financial inclusion – and financial health – among poor Zambian women farmers.  

To understand the financial needs and preferences of Zambia’s female smallholder farmers, and to identify the types of financial products and modalities that could make sense for them, AFA conducted a series of face-to-face interviews with women farmers in Zambia’s Eastern and Southern Provinces from May to July 2017. The project used a human-centered design approach and was conducted in collaboration with the Dalberg Design Impact Group 

Beyond just measuring financial inclusion for women smallholders in Zambia, we are also really starting to think about the financial health of these women,” says Makokha. “What are their expenses and incomes? How can we help build their financial resilience to shocks and their ability to plan and pursue financial goals that can improve their lives and those of their families?  

Fifty on-site interviews were conducted with women, including 40 one-on-one, 10 with small groups, 2 with community agro-dealers, and 2 with VITALITE (pay-as-you-go solar, cooking, and agricultural products) vendor. The information captured participant financial and non-financial needs and priorities. It provided the following portrait of the Zambian women smallholder farmers’ attitudes, beliefs, and concerns regarding digital and financial services:

Phones are seen as a luxury. “Why buy a phone when all I do is just feed it with credit?” asked Norah from Nsongwe, Kapande Sector. In the rural areas covered by the study, mobile penetration was estimated at only 20-30%. The cost of purchasing a device, lack of money for talk time, limited access to electricity to charge batteries, and phone sharing impede the uptake of mobile banking.

Network infrastructure is limited to major roads, rail lines, and towns. Poor phone coverage in rural areas hinders the establishment of basic digital financial services, so most financial transactions are conducted either person-to-person or over the counter. 

Low literacy and misconceptions inhibit the use of SMS. Most rural women do not use text messaging, often because they cannot read or understand the content. They also worry about being tricked into paying for or accessing products they do not understand. “SMS – what if it is satanic? There are rumors of SMS messaging causing unexplained deaths,” say respondents in Kalomo District, Southern Province.  

Smallholder farmers use cash and are highly suspicious of banks and virtual money.  “Most farmers have trust issues, especially when money is involved. They prefer handing over money to us rather than sending it directly to someone they haven’t had interaction with,” says Mabvuto, a VITALITE vendor in the Southern Province town of Monze. Other barriers to banking include bank fees, transaction costs, inflexible repayment terms for loans, and agent liquidity constraints that make farmers worry about not being able to access their cash in an emergency.

Rural agent networks are underdeveloped, creating geographic barriers that limit access and add transportation costs. “I like the idea of having my money virtually, but that scares me too,” says Beauty, from Nsongwe in Kapande Sector. “What if I need that money and my closest agent is 35 km away? That’s why I stick to having it physically with me no matter the risk.”

To probe for potential solutions, the AFA study analyzed the seasonal cycles of smallholder women’s incomes and expenditures, their non-financial priorities and needs, and the influencers who do – or don’t – affect their financial behavior. It also identified the different profiles among women smallholders, from early adopters of new products to the slow movers.  

The next blogs in this series consider those issues and their implications for designing financial products for Zambian women smallholder farmers in further detail. 

Part 2: Increasing Women’s Financial Inclusion in Zambia 
Part 3: Who Influences Women Smallholder Farmers in Zambia? 
Part 4: For Women Smallholders in Zambia, Financial Inclusion is Not “One-Size-Fits-All” 


Christabell Makokha, AFA Country Director, Lusaka  

Lucy Kioko, AFA Agriculture Engagement Manager, Nairobi  

Valerie Gwinner, AFA Consultant  

This research was supported by funding from the Mastercard Foundation and Financial Sector Deepening Zambia (FSDZ) Women’s Financial Inclusion (WIN) program.