Women and Finances: Intentional Investing
The stereotypes about how women handle money are many. Financial institutions gently and patronisingly sell women products marketed with cursive lettering, decorated with pink and other feminised colours. There is constant reiteration of the ‘fact’ that women only make ‘risk-averse’ investment decisions, so in general very risk-free investment options are marketed to them — and these also tend to have lower returns. These stereotypes are authored and exacerbated by patriarchal assumptions and socialisations, and the fact that there are certain systemic issues, erasures and exclusions that largely affect women’s interaction with money and capital.
The first is the massive loss of time and resources that women experience in the form of unpaid care labour. Women everywhere spend disproportionately high amounts of time on unpaid domestic, child, and societal care work, compared to men. Conversations all over the world are currently evolving towards a methodology that properly quantifies these contributions.¹ This discourse is centered around putting a fair and ethical price on it, and recognising the immense effort, expertise and utility inherent in this kind of work. The ongoing dialogue therefore looks towards finally acknowledging the essential contribution of women to the function of global economies and societies. There are many arguments for and against this rather controversial, but completely valid, approach to direct valuation.
Here at home in Kenya, one place (out of many) where we can clearly see gendered inequality is in distribution of resources, especially when it comes to making personal investments across socioeconomic class. This can be directly linked to women’s reduced earning capabilities and disposable income. In addition to unpaid care work at home, or poorly remunerated labour in informal spaces all the way from the home to elsewhere, women continue to earn far less than their male counterparts in formal work spaces. A report covering the companies listed on the Nairobi Stock Exchange revealed a woman is paid KSh 68 for every KSh 100 paid to a man for the same job. ² Women of child bearing age also experience the motherhood penalty³, as they are pushed very far behind male peers when it comes to career progression. This inequality informs women’s relative non-ownership of assets, which in turn affects their ability to access formal credit to attain wealth, or even build and grow their own businesses.
One thing I have heard many women I know say is that the buck will always stop with them when it comes to taking care of financial emergencies, when there is no one else to turn to. Men’s money may get to chase deals which may have little assurance of returns, but women have to hold everything down. This was the main reason I started putting away savings ever since my very first job — I always had it at the back of my mind that if there was ever an emergency, especially in my family, I didn’t want to be caught completely unaware. Many women of all social classes tend to have something put away somewhere, for this express reason. We tend to be more conservative because more people across the board rely on us, so we literally cannot afford to make larger gambles. The patriarchal model of leaving all finances up to a man has clear gaps, as regards the 32 percent of households in Kenya that are female headed (with another significant cohort being elder-headed or child-headed).⁴ Beyond that, women are painfully aware that they can be left alone financially at any moment by a partner who dies, becomes ill, chooses to leave, loses a job or becomes otherwise indisposed. Their care responsibilities, however, cannot be transferred to anyone else. The life outcomes of children, sick partners and relatives and more are more women’s responsibility than anyone else’s, as the primary care givers they most often are. I definitely experienced this on a personal level, and have also seen close friends make very ‘safe’ money decisions as compared to our male friends, who will much more easily invest in higher risk, higher return investment opportunities.
Another interesting reflection for me is how profoundly trust and relationships come into play when women make money decisions. A lot of us grew up seeing our mums take part of various investment groups, commonly known as chamas, that were very instrumental in their personal money decisions. I regularly saw my mum hosting her small army of sisters and friends as part of their merry go rounds. The reason some chamas are called merry go rounds is because every woman in the chama would take a turn (which meant that every month there would be a house to visit). They would visit with bags of shopping for the home they were visiting. They also carried small envelopes with money in them, which would be put together and all handed to a different woman each time.
Apart from the direct financial capital that was changing hands during these informal arrangements, the women were also growing their social capital: it was a chance for them to catch up with each other, thus building trust amongst each other. We watched these merry go-rounds evolve and grow, and they provided opportunities for our mothers, a majority of whom had no ownership of assets and therefore could not access formal credit, to access loans from each other to buy parcels of land (and/or have joint ownership of this land), build houses, and access capital to start their own businesses. Where women have lacked systemic and social support, they have been that support for each other with remarkable results. Several banks which would previously have looked at women sideways for trying to access credit now have specific investment products targeted towards these same chamas and investment groups.
This type of relationship with money decisions, which needs trust to be able to move forward, is common among women, regardless of the different settings we may all live and work in. I have personally made a lot of investment decisions based on receiving information and insights from friends in different fields, as I always prefer to trust them and their insights over the opinions of strangers. My own background in finance definitely allows me to have access to different expertise and opportunities on investment alternatives. Even so, women who do not have this specific information base have managed to make great headway by having many conversations with many people, both experts and lay-folk, in order to make final decisions about where to put their money with expectations for growth. This quality should never be called conservative or ‘risk-averse’, with any derision — it should perhaps be called ‘risk-aware’, or even ‘holistically savvy’.
Trust-based decision making processes have also been very useful in my work. I am in the investment space, and data shows us that women entrepreneurs who are able to access larger tickets are still very few, compared to their male counterparts. According to the 2019 Africa Funding Landscape Report by Briter Bridges⁵, only 13% of female-founded startups managed to raise one million US dollars, as 13 out of the 98 startups that raised over 1M USD in 2019. A little before this in 2017, as our way of beginning to counter this massive discrepancy in our own sector of practice (the creative and cultural industries), we launched a fund primarily focused on investing in young women-led and women-owned businesses.⁶ At the beginning of it, we had not fully realized the level of deeper engagement we would need to have with our beneficiaries to make the facility a success. Working with our beneficiaries taught us many priceless lessons. Among these, we learnt that running a fund ‘with a gender lens’ doesn’t end after raising money and then announcing that there is money available. Our strategy needed to shift, to not only involve the women at many levels of the process, but also listen to their feedback and criticism, thus ensuring their complete comfort. We had to host several information sessions to establish and maintain continuity of contact and reliability, and keep multiple open avenues for communication and feedback. This allowed applicants and beneficiaries to ask all the questions they had about any issues of concern to them. Our general fund design, beyond our work with women, has since evolved to include relevant, intentional communication at every level. We still have a long way to go in increasing access to women-led and women-owned businesses at more levels and in more value chains, but we are grateful for this start.
The kind of collaboration and sharing that I’ve seen being valued among the women around me, at home, at work and elsewhere, informs how we all make money decisions. It is an instrumental principle which should inform how strategists in the financial field structure knowledge, information and products for increased engagement and participation by women. It is clear that women already know what they are doing and why. The people who need to realise that are the financiers themselves. We have seen this begin to happen with institutions like savings and credit cooperatives, but there is still a lot more work to be done to ensure that women are able to easily access the financial services, aid and resources that they need at all levels, for investment and beyond.
¹The World. (2021). Putting a price on women’s unpaid work in India. Retrieved 5th March 2021 from http://bit.ly/30nN7Fx.
²Muiruri, K. Citizen TV. (2019). NSE firms fail to disclose key data on gender pay gap. Retrieved 5th March 2021 from http://bit.ly/2PMspx9.
³Correll, Shelley J., Stephen Benard, and In Paik. American Journal of Sociology 112.5 (2007): Getting a Job: Is There a Motherhood Penalty? 1297–1339
⁴Munene, F. M. (2003) Kenya Demographic and Health Survey. Household Population and Household Characteristics. Retrieved 5th March 2021 from https://bit.ly/30pUDQl.
⁵Briter Bridges (2019). Africa’s Funding Landscape. Retrieved 5th March 2021 from https://bit.ly/3rvSsXj.
⁶HEVA (2020). Young Women In Creative Industries Fund. Retrieved 5th March 2021 from http://bit.ly/3qrQfuN.
