Financial exclusion is often said to be one of the main hindrances that women face in the developing world,
standing in the way of women’s economic progress and social advancement. It has been argued that a lack
of access to formal credit retards empowerment and entrepreneurship among women, which impacts their
ability to access formal education, secure decent jobs and enter the workforce. Developing countries have
put gender financial equality on the top of their agendas as credit is viewed as crucial in facilitating
employment generation, skill development, education advancement and enterprise growth and expansion in
a time of economic uncertainties and global financial crises. Given the insufficient financial products and
services as well as weak financial regulation, Africa represents an especially challenging environment for
women trying to access formal credit.
In Sub-Saharan Africa, a number of studies point out that not only women find it more difficult to access
formal financing than men (Johnson, 2004), but they are likely to be charged higher interest rates
(Muravyev, Schafer and Talavera, 2007). In addition, they are less able to raise informal and formal venture
capital than their male counterparts (Brush, Carter, Gatewood, Greene and Hart, 2004). In some cases,
banks require signatures of a male family member in order to open a bank account for women which would
allow them to access any financial services or products (Narain, 2009). This points to the ongoing
discrimination and bottlenecks faced by women on the continent in accessing finance and other financial
services, which would be an impediment to their participation in the formal economy.