How do Africans feel about credit? What is the role of women in household finances? Telecommunications company Ericsson recently answered these and other questions in a report titled ‘M-Commerce in sub-Saharan Africa’. To produce the research, Ericsson conducted interviews with consumers in Accra, Dar es Salaam and Johannesburg. While it is impossible to generalise in a continent with over one billion people, the report does provide interesting insights. Here are some of the highlights:
1. Wide-spread aspiration “In all three markets, the overwhelming impression is of people with clear ambitions and goals set out for their futures,” notes the report. Those who currently run their own businesses are usually on the lookout for expansion opportunities or to launch additional companies.
2. Extended financial responsibility Most of those interviewed have financial responsibilities within their extended families. “Rather than a matter of loaning or borrowing money, this obligation is to assist, and to be able to expect reciprocal help. Consumers are seldom alone; either they support somebody else, or they receive money from a relation – often a family member,” says the report.
3. Cash economy Respondents in all three countries mostly operate in cash, with the exception of South Africa where wage earners make purchases with debit cards or store credit. Even those that keep their money in a bank, withdraw cash to make purchases. Bank cards are mainly for ATM withdrawals.
4. Avoiding credit “Although the use of credit differs across the markets, resistance to credit is constant. Being indebted is avoided as far as possible, since it implies being in someone else’s mercy,” says the report.
5. The role of women in household finances While most of the men that were interviewed claimed to be the primary breadwinners, women are ensuring that the money lasts, especially in low-income households.
Women often save what they can in the event of unexpected shortages. “For example in Tanzania, women’s hidden savings forms a sort of well-known secret, a field where men do not ask, and women do not tell. It is best for everybody if women are allowed to set some money aside, for tough times,” notes the report.
“If we are out of money and we have to buy something, my wife will usually solve it somehow. I don’t know how she does it, women always have their ways,” commented one male in Tanzania.