Reducing poverty by expanding financial services to underserved markets

  • October 27, 2015

  • New York, USA

UNCDF’s second phase of MicroLead programme works to extend savings services offered by regulated institutions to the last mile unbanked population.

It does so by funding organizations willing to take risks and experiment with alternative delivery channels, new client-centric products, and technological innovations to bring down the costs, including of providing financial education. The results are increased uptake and usage of pro-poor financial services, particularly for women.

One example of MicroLead’s work to empower women through financial service access is via support to CARE and the Mwanga Community Bank in Tanzania. This takes place in a small rural district about two hours east of Kilimanjaro, with a population a little over 100,000 people. Their partnership will develop and offer formal financial products and services in order to link informal savings groups to Mwanga Community Bank through the development of branchless banking services.

Savings groups are key to providing access to finance for the last mile of the unbanked population. Autonomous and self-sustaining, they bring community members, largely women, in remote villages together for a common objective: to accumulate and grow savings – as individuals and as a community. The structure of the groups and the regularity of the meetings bring with it unintended benefits that have resulted in increasing women’s empowerment in rural areas as members take their leadership experience in savings groups to leadership roles in local government.

In the microcosm of the Kilimanjaro project, in 2014, 21 savings group members participated in local government elections. Out of those 21 members, 20 were elected: 11 men and 9 women--a small but significant first step in building future female leaders in villages across Africa.

Mary Soka never had any political ambitions and she was not aware of the power she held as a woman. “Without the savings group members I couldn’t have reached where I am right now,” said Mary.

Members of her group persuaded her to take the initial steps in filling out the form and presenting herself in the local government elections of December 2014. Mary beat her competitor by 80 votes, unseating her predecessor, a man, thus showing the community and others that given the opportunity women too can become village leaders.