The African Center for Economic Transformation (ACET) is holding a workshop on 27 November in Freetown, Sierra Leone to validate the findings of a study on the effectiveness of existing financial inclusion initiatives. The Sierra Leone findings are part of a three-country study including Guinea and Zambia.
Only 20% of Sierra Leoneans have an account at a formal financial institution such as a bank, credit union, cooperative, post office or microfinance institutions (MFI), according to the 2017 Global Findex. This compares with 33% for the entire continent and 69% globally.
Women and youths experience worse financial exclusion than other groups in the economy. In the case of women, the Global Findex found a 9% gap between men and women in terms of account ownership with only 9.8% of women having an account at a formal financial institution compared to 12.4% of the population of Sierra Leone.
The latest Findex data also suggest that youth (defined by Findex as aged between 15 and 24) are worse off than the population on many indicators. For example, only 10.2% have an account at a formal financial institution, while 46.6% of youth were able to borrow money from any source, compared to 49% of the population, and 3.5% borrowed from a financial institution or used credit, compared to 5.2% of all Sierra Leoneans.
To prioritize efforts that remove impediments to greater financial inclusion and find innovative ways to expand access and deliver pro-poor products and services, the Sierra Leone central bank developed a new National Strategy for Financial Inclusion in collaboration with relevant stakeholders.
Sierra Leone has 14 commercial banks, 13 MFIs, 17 community banks, three mobile money operators, 59 financial services associations FSAs and over 200 credit unions. Although Sierra Leone has a total of 1,811 financial access points, access is concentrated in the big towns and cities, and there are only 43 ATMs in the entire country. Banks generally do not accept movable assets as collateral and this affects access to credit. When it comes to acquiring an asset to secure borrowings, women are the most affected as most do not own land, which in most cases, is in the hands of their husbands.
ACET’s preliminary findings reveal that there is a paucity of data regarding issues of access to and usage of financial products. The study also found that although the MFIs are the most women- and youth client-focused of all financial service providers, they develop their products in relative isolation.
The validation workshop will present key findings and recommendations of the country report to stakeholders and provide a platform for stakeholders to validate research findings and make inputs, as well as to exchange experiences and knowledge of the financial system as it relates to women and youth entrepreneurship and job creation.
The Sierra Leone workshop is the second of three planned validation workshops on the continent and will be attended by stakeholders including officials from key government ministries, agencies and departments, financial institutions, civil society organisations and academia, together with representatives of women’s and youth associations. The first validation workshop was held in Zambia on 6 November. The third and final workshop will be held in Guinea in early 2019.