Women’s financial literacy benefits us all — here’s how

• Financial knowledge benefits everyone - here's how African women encounter challenges in beginning and growing businesses that must be overcome to achieve equitable growth.
• Entrepreneurship is viewed as a good professional choice by 76 percent of Africans, many of whom are women.
• Togo boasts among of Africa's most financially knowledgeable women, and their efforts help the entire country.

Togolese women have developed and run profitable enterprises since the 1940s, despite a slew of obstacles.

It's not uncommon to come across a Nana Benz when walking the streets of Lomé, Togo's busy metropolis. They stand in their stores, full to the brim with colourful fabric, dressed to the nines, marketing their wares and operating their enterprises. These women have long been an example of female resilience and creativity, with their moniker derived from a combination of "na" meaning "mother" in the Mina language and "Benz" for the Mercedes Benz cars they enjoy driving.

Globally, huge strides have been achieved in female inclusion, and perhaps most importantly, women now have improved access to education. However, when it comes to the performance of female-led enterprises, they still trail behind their male counterparts.

Why is there a disparity between these stubborn women's motivation, perseverance, and skill?

African women's financial literacy

African woman can theoretically start a business. In practise, however, they are not as well-equipped to expand and secure their businesses over time. This is due to the fact that women routinely score lower on financial literacy tests than males.

Financial literacy, or the ability to comprehend and use financial instruments effectively, is essential for making sound financial decisions. It enables people to make sensible investments, save for retirement, and build economic resilience in the face of economic shocks such as the one the world experienced during the COVID-19 epidemic.

Financially aware people can plan strategically for the long term rather than living day to day and incurring larger costs. As a result, a lack of financial literacy prohibits women from building wealth and, as a result, from safeguarding their future.

These limitations not only have an impact on women's financial well-being, but they also have far-reaching effects. For example, in Africa, the path to entrepreneurship attracts a large portion of the continent's vibrant and increasing youth population. Nearly 80% of Africans think it's a good career choice, the highest rate in the world, and Africa is the only continent where women are more likely than men to be self-employed.

Africa's next generation of entrepreneurs

Women's financial literacy is more vital than ever, given the development of female entrepreneurship and rising female participation in the workforce. When these women realise their economic potential and have equal access to opportunities, they help to build their communities and contribute to the country's economic prosperity.

As a result, a virtuous circle begins: female entrepreneurs are far more inclined than their male counterparts to hire women. In fact, women make up around 75 percent of their workforce, compared to 20 percent in male-owned enterprises.

We can make the most of a dynamic and talented young by ensuring universal access to financial education and delivering public resources that have a good influence on society as a whole. As a result, financial literacy for women is not only critical to assisting them in realising their full potential, but it is also a critical engine of economic growth and fundamental to Africa's future.

That is why the Ministry of Financial Inclusion and the Informal Sector in Togo has placed such a high priority on financial education for women in their national financial inclusion strategy.

Togo had the greatest rate of financial inclusion (81.5%) among West African Economic and Monetary Union countries in 2020. More than 832,000 women have benefited from the National Fund for Inclusive Finance, which is aimed at women and youth. They have received 59 percent of the available funding over the last eight years, accounting for 71% of the total number of beneficiaries.

Financial education's advantages

Women have grown tiny businesses into large, successful enterprises.

Take the storey of Zata Amamatou, a former peanut patty street vendor who secured two micro-loans despite only having a 5th-grade education. Her business is developing, and she is becoming a spice wholesaler, and two of her children have completed high school.

Women are becoming more aware, and with their admirable tenacity and perseverance, they are now successfully navigating and utilising the financial instruments available to them. More than 70% of Togolese female company owners have borrowed money for their firms, compared to 60% in Nigeria and 45% in South Africa.

Togo recognises and acts upon the importance of empowering women, and it shows. Togo is the only country in the West African Economic and Monetary Union where female-run microenterprises earn more profit than male-run microenterprises, according to a World Bank analysis.

Financial literacy is not a silver bullet for economic growth; it must be supplied with a strong financial system and a well-functioning regulatory framework — but it is a critical first step on the path to long-term prosperity.

The country's public and commercial sectors are now faced with the task of investing in financial literacy in order to increase the impact of financial inclusion. The sooner we come together to close the gender gap in financial literacy, the sooner Togo and any other nations that follow suit will see a meaningful improvement in global financial health – a benefit experienced by entrepreneurs, the women and men they hire, and their families.