If not loans… then what?
by Rani Deshpande
A study on young women in Ghana, Tanzania, and Uganda revealed one widespread trend: little desire to finance their businesses with credit. But if not loans… what? In this blog series by Rani Deshpande, we listen to these young women who speak about what they actually need in terms of financial services, and explore how the financial system can be redesigned to serve those who have been consistently overlooked.
This blog is part of the Luxembourg Award for Inclusive Finance (LAIF) 2026 (formerly the European Microfinance Award), on the topic of ‘Unlocking Youth-Inclusive Finance’.
When young women in East and West Africa were asked what they didn’t want from their financial services, some of their answers were hardly unique: high costs, inconvenient access points, onerous documentation requirements... But, as described in a previous blog, there was another widespread response that flies in the face of the logic on which much of the financial inclusion industry is based.
That answer? Loans.
To be clear, these study participants were not from high-income backgrounds. Almost none were in tertiary education (in fact many had dropped out much earlier), a large proportion were single mothers, and many had lost one or both parents. Most had financial responsibilities, which they were trying to fulfill by running their own businesses.
And yet, they had little desire to finance those businesses with credit.
An observer might thus be forgiven for asking the question: if not loans… what? Where are these young, low-income women sourcing the capital to launch and run their businesses?
Qualitative research in Ghana, Tanzania, and Uganda revealed that, to bootstrap the needed resources, many young women employ an ingenious range of strategies–very few of which involve credit. Some, like Mwanahidi from Tanzania, save money from one business to invest in another. In Uganda, college student Jane used a similar strategy, accumulating profits from selling perfumes in order to fund her more capital-intensive side hustle as a makeup artist.
Others, like Aisha in Tanzania, gathered contributions from family members. And some, like Bertha in Ghana, employ an “all of the above” approach, adding their own savings to gifts or interest-free loans from friends and family.
A range of (imperfect) savings tools
But finding the money is not the same as keeping the money. To turn these various cash flows into the lump sums they need, young women make use of a range of different savings vehicles, each with its own pros and cons. Listening to young women describe why they do or do not use different savings tools reveals that, while each has valid use cases, none provide the ideal combination of affordability, simplicity, safety, discipline, and privacy that low-income savers need.
Cash is simple and free, but can be lost, stolen, or spent.
Many young women reported earning income in small increments and keeping some of it in cash for small day-to-day expenses. Yet they are keenly aware that cash kept at home is susceptible not only to loss and theft but also to temptation and spending pressures.
Moneyguards can help build savings – if they are trustworthy.
To build savings, some give some money to a trusted friend or family member, who might help the saver avoid off-target spending. However others like Aisha expressed deep skepticism of this strategy. “You can live with people,” she says, “but you can’t always know their intentions. We can live together for over 10 years, but when they see you have money, they might start planning for it.”
Mobile wallets provide privacy but may not be safe enough. Mobile wallets can provide a more private way to shield money from spending pressures. According to one 24-year-old business owner in Ghana, “I can’t keep [money] at home because my child might ask for something and I would buy it. I keep it on a line that I don’t use, and I hide it away.”
But not everyone has this discipline; some young women feel mobile money is too easily spent. “If I put [funds] on my mobile money I would spend it, I would withdraw it,” said one young woman in Ghana.
Another in Tanzania agreed. “On the phone, you might want to use the money for airtime or other things. That’s why [I prefer using the bank].”
Additionally, fear of losing money through fraud is widespread, even among regular mobile money users. Margaret in Ghana has experienced this personally. “I use mobile money a lot,” she says. “Fraud people will just call you; if you are not smart, you enter your PIN – your money will be vanished!” Even hearing about such experiences secondhand can erode trust in mobile money.
The one exception is in emergencies, when convenient access to savings is critical. Though Mwanahidi from Tanzania believes “the safest place to save my money is in a bank,” she has experienced this downside. “I do face challenges with bank accessibility. For example, I once had an emergency, but the agent I depended upon did not open, and I had no other place to go unless I travelled to the city. I was really disappointed.”
Despite widespread aspirations to open bank accounts, many young women told us they had not been able to, often because they lacked an ID or there was no one to help them navigate the process. The notion that banks were only for large sums was also common.
Imperfect solutions require ingenious strategies
No single savings mechanism therefore seems to be able to fulfill young women’s need for affordability, simplicity, safety, discipline, and privacy – leaving them to juggle a variety of tools for different purposes. And juggle they do.
In Ghana, Bertha uses two different susu (or savings) collectors, one who comes weekly to collect savings for her business capital. These she withdraws every three months to restock her baking supplies. The other collector, who works for a rural bank, comes every day to collect Bertha’s education savings. These she will not withdraw for several years, until she has accumulated enough to return to school for nursing.
Other young women explained similarly sophisticated money management systems, matching the advantages of different financial tools to the purposes they best fit. Another interviewee received her earnings into mobile money but then gave half to her aunt for safekeeping. In addition, she uses a cash box for small expenses.
A third young woman has a mobile money account to receive payments from customers but then divides the money across different vehicles: a savings group for her business capital and two different bank accounts for long-term savings.
And another – Margaret in Ghana – uses two susu schemes, one for day-to-day expenses and one for emergency savings. The first self-liquidates monthly, but if she does not have a planned use for the money at that time, she deposits it in her bank account. In addition, Margaret has a cash box at home for small expenses, and also uses mobile money.
Simplifying savings to help young women launch without loans
While the portfolio strategies described above show remarkable creativity and resourcefulness, they are planning-intensive. What mental resources could be freed up if these young women could streamline their saving? Could a single tool shield their money from spending while still providing emergency access; offer simple onboarding at a low cost; and ensure privacy, while perhaps even providing a measure of social support? In the next blog, we’ll explore the product features and marketing strategies currently being piloted to give young women better financial management options (even the ones who don’t want loans).
Rani Deshpande is an independent consultant with over twenty years of experience in financial inclusion and youth economic strengthening. Her recent research has focused on how financial inclusion can be leveraged to promote young women’s well-being, especially in sub-Saharan Africa. Her background includes management and technical roles at a range of large international organisations, as well as research and consulting work for financial inclusion funders, practitioner organisations, and think tanks.
