Low financial investment in women | New times


Capital markets play an important role in the economic growth of an economy. It offers investors the opportunity to earn dividends and capital gains on their investments. Capital markets are a link between the financial sector and the non-financial sector. In developing economies, the expansion of capital markets is an indicator of economic growth.

In the 21st century, the role of women in society is changing, they are now in competition with men in several areas. Women are emerging as successful entrepreneurs and taking on complex decision-making roles in society and the business world. Despite the above advantages, the representation of women in financial systems is very low as investors.

Investing in the financial sector is one of the debated areas for unequal representation, even in developed countries. Behavioral economics responds to this with a stereotype of risk averse behavior in women.

Data provided by Riskalyze data (an online tool for measuring risk tolerance) shows that 37% of women have a lower than average tolerance for risk, 25% have an average tolerance and 38% have an above average tolerance. The results therefore contradict the stereotype about the investment behavior of women.

According to Moxie Future, women are neither well understood nor properly supported by the financial industry. Again, some studies indicate that women are very calculating and confident investors. Women want their money to be used, not only for financial returns, but to deliver wider benefits – for society, for the environment and for the world. Studies by Fidelity and Wells Fargo have found that female investors outperform male investors, both in absolute and risk-adjusted terms.

World situation

Women’s investment in capital markets is not a modern phenomenon. According to research on female investors in early capital markets, some female investors held Bank of England stocks between 1720 and 1725. During this period, their transactions accounted for around 13% of the market value of total transactions. At that time, women investors belonged to an elite of women.

In modern society, investments in the capital market have grown tremendously. Despite this strong growth, financial investment activity among women is still very low, which shows a low level of financial inclusion. According to Demirguc-Kunt, Klapper & Singer, 2013, financial exclusion of women is a global problem with “over 1.3 billion women worldwide operating outside the formal financial system.

A Capital Group survey confirmed that eight in 10 women encountered one or more of the following stereotypes regarding their investment expertise, as if they lacked self-confidence; they are less well informed than men, they are afraid to take risks, etc. These stereotypes not only affect the confidence of women in investment, but also employers who employ investment consultants.

Women’s investment in Africa

According to a study by MFW4A, GIZ & New Faces New Voices (2012), In Africa, over 70% of women are financially excluded and women’s access to financial and financial services is systematically lagging behind their male counterparts.

This financial exclusion, which manifests itself in the low investment activity of women, is also due to the lack of women in decision-making positions in the business world. According to the African Development Bank, women hold only 12.7% of board positions in listed companies on the continent. Countries like Kenya, which has the largest number of African women on boards, have made progress with legislation calling for restricting unitary representation.


Women represent around 50% of the world’s population. If these 50 percent of the population do not invest, it will surely affect the expansion of the capital market. There is a need to educate women on financial matters, to develop attractive products for women investors, to sensitize women to financial matters.

Again, legislation should be enacted to improve gender representation in decision-making positions. In South Africa, the Black Economic Empowerment Act was revised in June 2016 to require public companies listed on the Johannesburg Stock Exchange to submit annual compliance reports to the BEE Commission on Promoting Gender Diversity at the Board Level. administration.

The writer is a Kigali-based economist and the Business and Economics Program Manager at Mount Kenya University in Rwanda.


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