How are mobile financial services empowering female entrepreneurs in Kenya?

Despite making up 50% of the population, women in Kenya own only one third of the country’s registered small and medium sized enterprises (SMEs). Female entrepreneurs face structural barriers in growing their businesses due to their limited access to financial services, business networks and connections and market information.

These barriers limit women’s ability to access new markets, such as procurement contracts with private sector buyers. The International Finance Corporation —a member of the World Bank Group— interviewed 14 Kenyan corporations in 2021 and found they spend just three percent of their total procurement budget on female-owned businesses.

Internet access, particularly through smartphones, can help women gain access to opportunities, such as procurement contracts, that they otherwise might have missed out on. What's more, women who have access to smartphones and the internet can use digital financial services products to manage their businesses confidently and securely.

M-PESA, for example, a mobile money service established by Vodafone and Safaricom, provides financial services to millions of people who have mobile phones, but do not have bank accounts, or only have limited access to banking services. Kenya's largest fintech platform, it is the preferred way to make payments across the continent due to its safety and convenience.

Penny Wambui, who runs a distribution company in Nairobi called Neoking Trading Limited, uses M-PESA to pay her suppliers, bills and staff. She started her business when she realised many bars and restaurants hardly ever have a one-stop shop for their supplies.

“I realised that if I brought all those aspects under one roof, it would be beneficial and make my customers happy,” she explains. She’s planning to use M-PESA to help her coordinate her move into the e-commerce space.

“I feel secure because I know I don’t have loads of cash lying around,” she says. “I don’t have to have money right here in my till. Cashless payments are the preferred mode of payment in these times of COVID-19. ”

Penny Wambui, owner of a distribution company in Nairobi

Just across the city, Caroline Njuguna, the owner of Njuguna’s Place, a restaurant and butchery, has been using M-PESA for five years. Its roadside location means customers often walk in and take their food out with them, so efficient service is critical.

As well as taking payments quickly and conveniently from customers through M-PESA, Caroline also uses it to purchase goods and pay their workers. When cash builds up, she transfers the money to the bank through an M-PESA transaction.

Njuguna’s Place is popular with locals, and it’s expanding rapidly. “Our customers are basically everyone who is around us,” Caroline says. “We have so many buildings that are existing and others coming up.”

Chefs at work in Njuguna’s Place

Penny and Caroline’s stories illustrate the huge benefits that connectivity can bring to female business owners all over the world – but too many people still don’t have access to the platforms and connectivity they need. 3.4 billion live within range of mobile networks but are currently not accessing the internet, partly due to a lack of smartphone ownership.

While the digital gender divide has been narrowing across all regions, women remain digitally marginalised in many of the world’s poorest countries. 62% of men globally use the internet, compared with 57% of women, according to the International Telecommunication Union, the United Nations’ specialised agency for information and communication technologies.

In September 2021, Vodafone Group and the International Telecommunication Union launched a major new initiative to address the global digital divide, with the aim that an additional 3.4 billion people could have the ability to access and use the internet through a smartphone by 2030.

This is a critical step to address the digital divide and empower the next generation of female entrepreneurs.