Digital Financial Services (DFSP)

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Harnessing Digital Finance for Women Entrepreneurs
(AERC, 2025) Lemma, Tesfaye Tadesse; Mlilo, Mthokozisi
Women entrepreneurship plays a critical role in achieving sustainable development goals (SDG) of achieving gender equality and poverty reduction by promoting economic growth. The Kenya government’s Vision 2030 identifies entrepreneurship as a key tool in eradicating poverty and creating wealth for its people. Policies aimed at improving women's entrepreneurship have had limited success, as women-owned businesses have struggled to survive and succeed compared to male- owned ones. This disparity in performance is attributed to finance-related obstacles. Digital financial services (DFS) and technology can promote financial inclusion and level the playing field for male and female entrepreneurs. According to the latest World Bank Enterprise survey, 53% of Kenyan women-owned businesses reported adopting DFS due to high transaction costs associated with traditional bank services, such as bank fees, time spent conducting banking activities, and the risk associated with cash movement. In Kenya, 36% of households are women-headed and in dual-headed households, women are likely to be the primary caregivers and endure most of the economic and social hardship. DFS can help alleviate social difficulties faced by women entrepreneurs while balancing work and home responsibilities.