WOMEN ENTREPRENEURS OPEN A PATH FOR DIGITAL FINANCIAL SERVICES IN THE DEMOCRACTIC REPUBLIC OF CONGO CASE STUDY: WOMEN ENTREPRENEURS OPEN A PATH FOR DIGITAL FINANCIAL SERVICES IN THE DEMOCRACTIC REPUBLIC OF CONGO Project Overview Challenges partnership supports the expansion of financial inclusion through digital and agent banking. I n the Democratic Republic of Congo, finding ways to expand At just 17 percent, banking penetration rates in DRC Digital financial service agents are small-business owners banking services presents a particular challenge because financial are half the average for Sub-Saharan Africa.2 Women who offer FINCA banking services alongside an already institutions are scarce. However, some organizations are using experience even lower rates of financial inclusion, in part established business. Through an agent, a FINCA client innovative models—for instance, a network of digital agents—to because men are considered legal heads of household, can send money to other FINCA accounts, withdraw bring banking services to more people. with married women requiring their husbands’ permis- cash, make deposits, and repay loans. The agents receive sion to open a bank account.3 Given the weak infrastruc- a monthly subsistence stipend of around $100 for the IFC and the microfinance institution FINCA DRC developed the ture and post-conflict environment that characterize first three months and are compensated in relation to the network of online agents, called Digital Financial Service agents, to DRC, building a network of physical branches outside number and value of transactions they facilitate. provide banking services to FINCA’s low-income customers. During the capital city of Kinshasa would be too expensive. The the network’s roll-out, IFC and FINCA found that working with women agent-network model offered IFC and FINCA an opportu- FINCA has been successful in recruiting female business agents helped FINCA to connect with more people without access to nity to efficiently expand services beyond traditional owners as agents. In a country where only 8 percent of formal banking services. In addition, factors such as the location of branches and to reach the low-income clients, small- registered firms are owned by women, the institution women’s businesses or how women handle finances had an impact scale entrepreneurs, and rural populations that have has recruited women into 27 percent of agent positions on the growth of the company. These factors are discussed later in the traditionally been excluded from banking. in Kinshasa. Bringing formal banking services to those report.1 without banking services particularly benefits women, who have more likely been excluded than men. Gender-Smart Solutions For a detailed review of the project, see Women Make IFC and FINCA joined forces under the Partnership for the Best DFS Agents: How Financial Sector Alternative DIGITAL FINANCIAL SERVICE AGENTS Financial Inclusion, a $37.4 million joint initiative of IFC Delivery Channels Create Business Opportunities for and The MasterCard Foundation, to expand microfinance Women in Emerging Markets, on IFC.org. DFS agents are small-business owners who offer FINCA banking and advance digital banking services in Sub-Saharan services alongside an already established business. Through an Africa. Working with microfinance institutions, banks, agent, a FINCA client can send money to other FINCA accounts, and mobile network operators across the continent, the withdraw cash, make deposits, and repay loans. 2 World Bank Group (2015). The Little Data Book on Financial Inclu- sion: 2015. Available at: http://www.worldbank.org/content/dam/World- 1 IFC (2016). Women Make the Best DFS Agents: How Financial sector alternative bank/Research/GlobalFindex/PDF/LDB_Financial_Inclusion_2015.pdf delivery channels create business opportunities for women in emerging markets. Avail- 3 World Bank Group (2016). Women, Business, and the Law: Congo, able at: http://www.ifc.org/wps/wcm/connect/16fafca1-dbbc-4e0f-be83-4daf75aabadf/ Democratic Republic. Available at: http://wbl.worldbank.org/data/ex- The Partnership for Financial Inclusion is a $37.4 million joint initiative of Field+Notes+5+-+Women+DFS+Agents.pdf?MOD=AJPERES ploreeconomies/congo-dem-rep/2015 IFC and The MasterCard Foundation. Business Case businesses in other sectors. This is likely because customers see financial services as a natural exten- The agent network was launched in 2011 and now hosts sion of the existing, familiar firm. Since the institu- more than 60 percent of FINCA’s transactions. Agent tion’s women agents are 84 percent more likely than bankers and women entrepreneurs have been largely men to be in the service sector, their businesses are responsible for this rapid growth. typically better positioned to become digital finance hubs. FINCA and IFC observed that women agents were more ■■ Reinvestment: In their businesses outside of FINCA, successful than male agents on average, recording 12 women held higher inventory levels than men but percent more FINCA transactions a month and a 16 had lower bank balances, suggesting that they may percent higher net profit on their overall businesses. invest profits to support further growth. This entre- preneurial tendency carries over to women’s work as Further, the organizations learned that women agents’ FINCA agents, supporting their comparatively high success is determined by three factors: their location, profit rates. sector, and tendency to reinvest in their businesses. ■■ Location: Women agents are more likely to be located in communities that lack basic banking services—where there is a greater demand for About IFC FINCA’s services. IFC found that women are Recognizing that equality of economic opportunity 12 percent more likely than men to be present in between women and men drives productivity, profitabil- low-income areas and more than 50 percent more ity, and performance, IFC helps clients realize gender- likely to operate from commercially underdeveloped smart solutions to their business challenges. We work municipalities. While in other circumstances this with clients to better manage talent in their workforces would limit women’s prospects, for agents, their and supply chains and to design products that tap the location means they are well situated to serve microfi- earning potential of the women’s market. Our motivat- nance clients and less likely to face close competition ing force is the knowledge that when companies and from other financial access points. people—no matter their gender—can reach their full ■■ Sector: For both men and women, service-focused potential, families, communities, and economies can businesses produce more revenue for FINCA than achieve sustainable growth and prosperity. What FINCA clients say What The MasterCard Foundation says What IFC says It is so fast. I provide my account number, I press my finger, This initiative is part of a much, much larger story. It’s the story Our research with FINCA clearly shows the success of women and I immediately get my money and I can go. of political, economic, and social transformation happening agents and is evidence of how women can drive innovation in Justin Ngola around the Sub-Saharan continent. financial services. We have seen a similar trend in other markets, FINCA Customer Reeta Roy supporting this finding more broadly across the continent. President and CEO, The MasterCard Foundation Riadh Naouar I save my money at FINCA instead of using it and losing it. Head, Financial Institutions Group Advisory, Sub-Saharan Africa, IFC Lina Diambote FINCA customer Contact Information IFC 2121 Pennsylvania Avenue, NW Washington, DC 20433 USA +1 (202) 458-2262 Bmurti@IFC.org www.IFC.org/gender @WBG_Gender 10953