As a female small business owner, have you ever felt marginalised or overlooked regarding financial opportunities and support?
There is a long history of unrepresented women in the informal economy among the banked and formally served. These women use more informal financial services than men due to their low levels of education, financial illiteracy, lack of awareness of financial services, high-interest rates and a lack of trust in the banking system.
Following the theme of this year’s International Women’s Day #embraceequity, we will take a deep dive into the problems women working in the informal economy face when accessing financial services and solutions to improve this access.

The difference between Equity & Equality

These words are often used interchangeably, especially in conversations around gender and access to financial services. Yet, these terms, although similar, are not the same. Here are the differences between the two:


Equality means giving everyone the same support and access to opportunities and resources. It does not discriminate based on race, gender or educational background. Absolute equality means people working in the same job or the informal economy will have access to the same resources and services.


On the other hand, equity recognises that each person has different circumstances and allocates the resources and opportunities needed for everyone to reach an equal outcome. If there is accurate equity, then equality is inevitable.

Barriers facing small female business owners’ access to financial services

  • I sought insights from Reena Ninan, host of the HERO podcast, and she highlighted the unique challenges women face compared to men, leaving them susceptible to business shocks.
    Her episode about why small business owners have difficulty getting loans explains that “women share a disproportionate burden of childcare, housekeeping and other unpaid work. For example, during the COVID pandemic, a study by the World Bank found that women-led businesses have seen a larger decline in sales and profits compared to their male counterparts”.
  • This financing gap examines why small business owners still struggle to get financed despite the increasing number of credit providers. Inability to fulfil requirements: The need for financing in the informal economy is more significant than ever. However, these needs are not being fulfilled for several reasons. One of them is the inability of informal market merchants to produce the essential requirements and collateral that credit facilities need to grant loans. This group is primarily unbanked, so they don’t have a history of borrowing and repaying loans, which counts against them greatly. Lack of knowledge and awareness: Studies show that women, generally, are in the dark about the numerous financing options available to them.
  • Their lack of knowledge may result from financial services not being marketed directly to women, making them unaware of the available product benefits. Furthermore, access to this information may be high; it could mean more time, energy, and money they could put into other familial obligations.
    High-interest rates and low levels of trust in the banking system are two primary reasons the informal economy is poorly financed. Small business owners in this economy already have a misconception about loans and a distrust of any institution “giving out money”. Because a large number of them, about 73% of the financially excluded adults, are not well educated and do not understand the concept of interest rates or loan repayment and those that do cannot afford the high-interest rates most credit facilities are offering.

Solutions to improve access to financing

Leveraging Tech: The rapid growth in the technology sector has brought about new transformations like infrastructure builds and enabling tools that have had a significant impact on financial services and, ultimately, increased the growth of the informal economy.
Introducing new infrastructure has brought about new business models and financial products that can support enabling tools and channels like digital business management and online marketplaces that MSMEs can use to transform their businesses digitally. At Sabi, our technology-enabled platform allows companies to connect with distributors and suppliers to buy or sell their products or services online. The app provides competitive prices without sacrificing quality or consistency.

Download Sabi from the Google Play Store to access various credit facilities.

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