Can You Use Digital Finance If You Can’t Read?

In the remote drylands of sub-Saharan Africa, patriarchal customs and lack of education, infrastructure and access to financial and market systems can trap women in a brutal cycle of extreme poverty. Yet Rose Lelesiit supports her family of eight with profits from the business she runs with two partners in Lodokejek in northern Kenya. Her children are fed, they attend school, and Rose is confident that, with her income, she can handle shocks like droughts or emergencies.

“My people have always been herders,” says Rose. “But that life is becoming very difficult. This new idea that we can do business is changing everything.”

Empowering new entrepreneurs

Rose and her two partners enrolled in the BOMA Project’s gender-focused poverty graduation program in 2017. They were provided with seed capital to launch a livestock trading and butchery business. They also received financial, business and life skills training; ongoing mentoring, and a mobile phone linked to an account with M-Pesa, one of Kenya’s mobile money services.

While financial inclusion in Kenya has expanded by leaps and bounds in recent years, with 82 percent of adults having bank accounts in 2017, the gender gap in account ownership persists. Women encounter daunting barriers to financial security, including risk of theft and lack of control over household financial decisions. Digital financial service (DFS) platforms help unbanked populations access and use financial services and relevant products and give women a safe place to conduct transactions and save their money.

A critical step in BOMA’s model is linkage to DFS so women can more fully and securely participate in financial transactions. However, while providing mobile phones and M-PESA accounts are first steps in accessing DFS, for many women in last mile areas there are still multiple gender-specific sociocultural challenges including illiteracy, innumeracy and digital proficiency. In a baseline study of 750 BOMA women, only eight percent could read, compared to 74 percent nationwide, and many of BOMA’s participants rely on oral accounting systems and family members to help them keep track of transactions.

“I did not know the importance of schooling,” says Rose. “My eyes were blind to many things. But now I see how schooling would have helped me in running this business, as I would know the numbers and words. But I promise to school my children so they do not have these problems.”  

Moving beyond dependence

Participants like Rose and her partners need support conducting transactions on their phones or making payments or transfers. They often learn work-arounds to cope with the fact that they cannot read or recognize multi-placeholder numbers, such as remembering which option on the screen signifies a deposit or a transfer. Mistakes such as transferring incorrect amounts or sending money to the wrong recipient can weaken women’s confidence in their ability to handle money.

“Our participants often rely heavily on family members or their BOMA mentors to help them with financial tasks because they cannot read or do numbers,” says Celestine Heibor, a BOMA Field Officer in Marsabit. “But for them to be successful beyond the two-year span of our program, they need to be able to conduct this business on their own. We have always known that we need to find a way to deal with these difficulties.”

Exploring solutions to address women’s barriers to digital finance

To that end, BOMA is exploring innovative approaches to help participants overcome literacy and numeracy challenges. With support from the Bill & Melinda Gates Foundation, IDEO.org, an organization that designs products and services to improve the lives of vulnerable people, is undertaking a two-year global study to understand and address the barriers ultra-poor women face in accessing and using digital financial services. Among the objectives of the study are:

• Understanding the barriers to adoption and use of DFS by women.
• Developing concrete opportunities to increase the desirability, access and use of DFS.
• Enabling women who are illiterate to be included in the digital financial system.
• Studying how access to money and assets changes household dynamics for women.
• Determining how DFS can help connect women in Northern Kenya to market systems.

IDEO spent nine weeks researching BOMA’s work and learning firsthand about the complexities of conducting financial transactions and accessing digital financial services in the last mile. The IDEO team attended meetings of business and savings groups, accompanied women to their kiosks or into the livestock market, interviewed them in their homes, and did a deep dive into the behaviors and capacities that affect women’s DFS usage.

They identified various opportunities to design DFS mobile applications to make them more accessible to this population including:

• Physical touch-points for low literacy users (e.g. text to speech, more explicit iconography).
• Create alternative verification steps in addition to a PIN code (e.g. voice recognition).
• Develop savings products that give users more confidence that they can be responsible for money (e.g. joint savings account with husband, layaway wallet for school fees).

The lessons from the research will have far-reaching implications for poverty alleviation programs and contribute to a relevant body of evidence that will ultimately improve access and usage of DFS for women in last mile areas.

BOMA is also exploring incorporating recommendations from My Oral Village (MOV), an organization linking innumerate and semi-numerate populations with financial services has successfully implemented adaptations for last-mile populations in Tanzania that support necessary business skills such as keeping track of transactions, tracking inventory, and paying suppliers. Recommendations include:

• Visually-based tools.
• Developing a numeracy training module for microenterprises and savings groups.
• Developing Android-based apps including a cash calculator, a suite of numeracy games, an M-PESA game and tailored systems for business and savings group record-keeping (figure 1).

Striving to serve the last mile

Stories like Rose’s show the transformative power of financial inclusion made possible through the most commonplace technology—a basic mobile phone. But a phone with access to services is just one aspect of financial inclusion; for many unbanked women in last-mile populations, there continue to be other significant barriers to fully becoming part of the economic system. Incorporating simple but powerful innovations into poverty alleviation program design can help financially under-served people access digital financial services so they can become economic assets in their households and their communities.