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Diversity and inclusion, factors in institutional performance

Mar 29, 2021
Estelle Brack , Economist & Banker, Founder of KiraliT consulting firm

According to Barth (2007[1]), diversity management can be defined as “managing people by valuing their individual differences while integrating these differences”.

The private sector increasingly mainstreams diversity promotion in policy implementation, particularly within the specific context of financial sector development in Africa, both within the financial establishments themselves, and in product and service offers targeting their customers.

Africa leading in the number of women company directors

The most common measure of diversity is the presence of women in managerial positions within organizations. According to a report by McKinsey Global Institute published in November 2019, Africa, with 25% of women executives, ranks higher than Europe (23%). Research findings by the International Monetary Fund indicate that adding a female member to Senior Management or the Board of Directors of an organization -without adding to the number- is likely to increase the Return on Assets (ROA) by 8 to 13 basis points.

Banks with more women on the Board of Directors have more capital buffers, fewer unpaid loans, and a higher resistance to stress. The most plausible explanation would be that more women contribute to diverse and complimentary ideas, leading to better decision making, as noted by Sahay and Čihák[2].

Women are believed to be more risk-averse in the marketplace compared to men. Therefore, increasing the number of women brings a better balance to the decision-making process.

For Christine Lagarde “If banks and financial regulators increased the proportion of women in senior positions, the banking sector would become more stable.” Women offer competences and concepts different from the conventional masculine ideas, as do persons from different cultures who bring an additional and complementary perspective of the world.

Diversity as a source of wealth and inclusion

For Bender[3] (2004), and Lorbiecki and Jack[4] (2000), promotion of diversity management is founded on several arguments namely: demographic, advocating for a multicultural workforce; attracting a wide range of talent and, from an organizational perspective, benefitting from the creative effect of mixed teams (Morrisson, 1992; Cox, 1999; Thomas and Ely, 1996).

As to the economic argument (i.e. the business case), promotion of banking and financial services specifically targeting women, responds to the need to offer products and services better adapted to a variety of clients.

In addition to the contribution linked to staff diversity, Anne-Françoise Bender adds inclusion, i.e. “the contribution resulting from a more active involvement of employees in an organization that is more considerate of their expectations”.

Women and social networks

The report “Women's Digital Financial Inclusion in Africa” published in July 2019, recalls that the African social fabric is weakened by the unequal treatment experienced by women. Women make up the majority of Africans active in the informal economy. Digital financial services offer them the possibility of earning money and making better spending choices. Thus, millions of women may accumulate start-up capital, start a business, carry out transactions without intermediaries, save and invest in health and education, which are key drivers of development.

Mobile money as an equalizer in Africa

Overall, considerable progress has been made in financial inclusion in Africa. Between 2011 and 2017, the percentage of adults with bank accounts in the region increased from 23% to 43%, mainly due to the growth of mobile money. Although East Africa recorded substantial growth, West and Central Africa witnessed a rapid adoption in recent years, reinforced by a favourable regulatory policy.

Several African countries recorded a sharp increase of financial inclusion rates among women. Between 2011 and 2017, the number of women having an account (traditional and/or mobile) doubled in Kenya and Ghana, and increased sevenfold in Senegal. In Cote d’Ivoire for example, the gap between women and men in terms of access to financial institutions increased by 90% between 2014 and 2017 but decreased by 35% for mobile money.

However, women remain excluded

Despite the advances made, women are still disproportionally excluded from the formal financial sector. Social, cultural, economic, and complex legal obstacles obstruct their paths. For instance, progress in Cameroon, Chad, Gabon, and Niger is hampered by regulations which prohibit women from opening bank accounts as men do. Furthermore, 71% of men in Sub-Saharan Africa have a mobile phone, compared to 58% of women, whereas more women than men use the internet continuously throughout the day (40% against 35%).

Feminization of financial services

It is also widely admitted today that women repay microcredit loans better than men, while they borrow at much higher rates than men, particularly housing loans.

The feminization of financial services in emerging economies comprises notably of widening the range of collateral accepted as guaranty for loans given to women. Disadvantaged in comparison to men in terms of access to traditional collateral (especially by inheritance), women may now turn to banks which accept jewellery as loan security, while designing services dedicated to the promotion of women entrepreneurs - thus boosting their access to financing.

Diversity necessary to promote the attractiveness of the African financial enterprise

Africa and Asia, both of which have traditional banks modelled after the historical European model, invented unique, localized solutions such as Orange Money, AliPay etc., that are well represented within the financial services, but also in other areas such as day-by-day power supply, single-serving water portions, etc.

Diversity in the sense of inclusion is a complex subject that goes well beyond organizational boundaries. Nonetheless, it is in the interest of organizations to be involved, in order to attract and retain talent. This is the case primarily for the African continent, which is experiencing rapid growth in its financial sector, creating a significant need for highly qualified human resource. While digitalization of jobs allows skilled African developers to find employment with European firms, facilitating access to these occupations for a larger and diverse number of young Africans could reduce local labour market tension for African financial institutions. Furthermore, by considering the specific needs of different retail bank customer segments (SMEs in particular and specifically women), financial institutions could respond fully to this necessary incorporation of diversity more than ever before.


[1] La face cachée du management de la diversité, in Barth, I. et Falcoz, C. (dir.), « Le management de la diversité : enjeux, fondements et pratiques », chap. XI, L’Harmattan, 2007.
[2] Women in Finance: A Case for Closing Gaps, International Monetary Fund, 2018.
[3] Égalité professionnelle ou gestion de la diversité, Quels enjeux pour l'égalité des chances ? Revue française de gestion, 2004/4, N° 151.
[4] Critical Turns in the Evolution of Diversity Management, British Journal of Management, 11, S 17-S 31,2000.


About the author

Dr Estelle Brack is an economist and banker. She has over 25 years’ experience as a specialist in monetary, banking, and financial services, with a strategic, global vision and technical expertise. She is recognized for her expertise on Africa and Europe. She created her consulting firm -KiraliT- in 2019. Estelle is the Secretary General of the African Network for Specialists in Financial Education (RASEF) and the Ambassador of France for the European Women Payments Network (EWPN). She is also a member of the Network for African Women in Fintech and Payments (AWFPN).

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