The role of banks in achieving financial inclusion: A look at Absa Bank’s initiatives

Despite the remarkable digital transformation happening in this era, financial literacy continues to be a significant challenge throughout Africa, including Ghana.

While there have been advancements, a considerable number of individuals still lack basic financial literacy and access to vital banking services. This gap shows the pressing need for holistic measures that will strengthen financial awareness and inclusion.

Banks play a pivotal role in addressing this challenge. As central pillars in the financial ecosystem, banks have the resources and reach to drive financial inclusion initiatives within the communities they serve. In this context, the initiatives of financial institutions like Absa Bank Ghana LTD are commendable.

The bank has been at the forefront of the financial inclusion drive, creating initiatives that bridge the financial divide and promote an inclusive economic environment. These initiatives benefit different groups, such as women, the youth, and small and medium-sized enterprises.

Money Matters Programme
One of the key impediments to financial inclusion is a lack of education and knowledge about financial services, which affects the ability of individuals and businesses to access and use these services. According to the World Bank’s Global Findex data, educational disparities contribute to financial exclusion, with less educated adults less likely to own a bank account or use financial services. `

One initiative that seeks to address this is the Absa Money Matters programme, a part of the bank’s financial literacy drive. Absa’s Money Matters programme is designed to educate young individuals on fundamental financial concepts, helping them make informed financial decisions and prepare for future employment and entrepreneurship opportunities.

This initiative is part of Absa’s broader commitment to creating a money-savvy younger generation. The project’s goal is to engage 100,000 students across the country. It has made significant strides since its inception in May 2024, having engaged over 50,000 pupils across 78 basic and senior high schools nationwide.

SME Clinics
Absa Bank Ghana’s SME Clinic series is a key initiative designed to bolster the capabilities and sustainability of small and medium enterprises (SMEs) across the country.

The initiative serves as a practical resource hub, providing workshops and seminars that address critical aspects of business operations, such as financial management, digital marketing, and effective business planning.

Absa Bank crafted these sessions to equip SME owners with the tools and insights to navigate market complexities and drive their businesses towards greater efficiency and growth.

Vocational Skills Training Programme
As part of its drive to be a ‘Force for Good’ in everything it does, Absa Bank Ghana continues to innovate and expand its outreach with targeted programmes designed to meet the specific needs of underrepresented groups. One such group is marginalised young women who are unable to continue their formal education.

Absa Bank launched its Vocational Skills Training programme to empower 100 such women with the skills needed to enter and succeed in various trades. Absa Bank will provide them with training, startup kits, and grants to start trading.

Link Between Education and Financial Support
An astute reader would have observed from the initiatives outlined that education and financial support go hand-in-hand. Absa Bank embraces this dual approach because it is crucial for effective financial inclusion. It involves educating individuals to impart the necessary know-how and also offering the resources for them to effectively apply this knowledge.

While financial literacy enables individuals to make informed decisions and navigate financial systems, the absence of actual access to financial services can limit the practical application of this knowledge. This gap can hinder individuals from fully seizing economic opportunities and affect their financial well-being.

Young Africa Works
The Absa Young Africa Works (AYAWs) project, in partnership with the Mastercard Foundation, applies this integrated approach of education and financial support to close the financial inclusion gap. Launched in October 2020, this ambitious initiative aims to create 50,000 jobs by 2025 by empowering micro, small, and medium-sized enterprises (MSMEs) with skills and financial support. AYAWs is distinctive for its comprehensive approach, which includes:
• Capacity Building: Providing comprehensive training in entrepreneurship, financial management, and digital tools to ensure businesses are well-prepared for investment and capable of growth. From October 2020 to July 2024, the project has trained 6,781 MSMEs, including smallholder farmers.
• Financial Support: Disbursing significant loan amounts at subsidized rates to enhance business growth and sustainability. The programme provides $100 million in subsidized loans to a minimum of 5,000 SMEs, with a specific emphasis on businesses led by women and youth, as well as those in the agribusiness and FinTech industries. Since project inception, a total of 1.1 billion cedis has been invested into 6,296 MSMEs, including small holder farmers.
• Job Creation: Focusing on generating employment opportunities, particularly for women and youth, aligning with broader economic development goals. So far, a total of 24,919 jobs have been created for the youth.

Business Acceleration and Sustainability Training (BAST) project
In addition to its educational and financial literacy initiatives, Absa Bank, in partnership with AngloGold Ashanti and supported by the Mastercard Foundation, has also launched a significant project in Obuasi aimed at revitalizing the local economy through entrepreneurial development.

The Business Acceleration and Sustainability Training (BAST) project is part of a 10-year Socio-Economic Development plan that offers comprehensive support to small and medium-sized enterprises (SMEs). This project provides specialized training, mentorship, and affordable financing options to entrepreneurs, fostering innovation and diversification beyond the traditional mining sector. Businesses engaged in this initiative benefit from industry tours and access to loans at a reduced interest rate of 10% per annum.

Absa EMERGE
Another initiative advancing financial literacy through support is Absa’s EMERGE programme. Launched to support women entrepreneurs, EMERGE is a tailored banking proposition that aims to address the significant financial access gap faced by women-led SMEs.

This programme offers lower interest rates on loans, fee waivers, and dedicated relationship management, which is crucial for women who are often underserved by traditional banking models. EMERGE also provides access to networking events, business training, and mentorship opportunities, fostering an environment where women entrepreneurs can expand their businesses.

These initiatives are just scratching the surface of what needs to be accomplished to achieve true financial inclusion. The responsibility extends beyond financial institutions; it is a national imperative that requires the active involvement of all stakeholders, including government agencies, private sector players, community leaders, and international partners. Together, we must prioritize and innovate our approaches to financial inclusion, ensuring that the frameworks we establish today are robust enough to support the economic citizens of tomorrow.