A couple weeks ago, the Tanzania Women’s Bank opened its doors for business in the Tanzanian capital, Dar es Salaam. According to the East African, the bank is the first of its kind in sub-Saharan Africa, where the World Bank estimates that women own 48 percent of enterprises but have the hardest time accessing finance.

Although anyone is welcome to open accounts at the new bank, it targets women who have inadequate capital to grow their businesses. While traditional banks require title deeds or other proof of wealth to open account, the Women’s Bank only asks for an ID and $2 in savings, making it much more accessible to women in a country where a third of the population earns less than $1.25 a day. There are also no monthly fees.
Bank officials say that the opening was the result of years of campaigning by women’s groups. From the East African:

“Women’s groups called for the establishment of this type of bank way back in 1999. They wanted a place where they would be listened to and where their needs would be taken into account,” said Ms Chacha [Margareth Mattabi Chacha, the bank’s executive director].

“It took them 10 years to collect the necessary funds. Their biggest challenge was to satisfy all the conditions needed to be recognised as a bank. So far, the initiative is a success,” she said.

Once the bank is firmly entrenched, the founders plan to expand regionally and, eventually, across the continent.

Although the bank is just a few days old, plans are at advanced stages to open branches in other Tanzanian towns.

“Many women live in the countryside,” said Ms Chacha. “Trips to ATM machines are long and costly. We will make banking available through mobile phones, a service provided by a number of banks in Africa,” she said.

Two weeks after it opened, the Women’s Bank now has over 500 customers, 70% of whom are women. In addition to helping women open accounts, bank staff also teach them basic business skills and money management. Officials hope that the availability of staff to walk women through the various steps and procedures will help make the process less intimidating for Tanzanian women, who like most African women are unlikely or unable to take advantage of formal banks. According to a 2006 World Bank survey, only 5% of Tanzanian women use banking services, compared to 11% of men.

Helping women overcome barriers to accessing credit and controlling their own finances is widely accepted as a key step in transforming communities in the world’s poorest countries. For years, microfinance institutions have targeted women as the recipients of small, low-interest loans on the premise that money invested in women is money invested in families and communities. A study in Brazil, for example, found that a child’s survival probability increases by about 20% when income is in the hands of the mother.

When matched with social and political opportunities, economic empowerment for women can have a multiplier effect on families and communities. So watch Tanzania over the next few years. It’s a country that has made significant progress in areas like health and education in the past decade, but this recent development might be the first step towards a new era.

-Nora Coghlan