Women’s Economic Empowerment: Smartphones, Fintech, and Indonesia’s Fisheries
Indonesia’s women fish sellers are an integral part of the country’s fisheries, yet they lack access to financial services that could help them grow their businesses and increase their income. By layering a financial management dashboard onto an existing sustainability app, USAID is increasing women’s economic empowerment and promoting sustainable fishing throughout the region.
By Emily Langhorne, INVEST communications specialist
Throughout the Indonesian archipelago, women play a vital role in the fishery ecosystem. An important source of protein, fish is an integral part of the diet of many Indonesians, and the local industry couldn’t operate without women fish sellers. Although they are present in every fish market throughout the country, no official or formal record exists for total number of women vendors, nor for the volumes of fish that they sell.
While some women vendors are suppliers who sell large amounts of high-value fish to national and export markets, most are tibo-tibo, who buy and sell low-value species on a smaller scale in local markets. Unlike suppliers, the tibo-tibo typically do not have access to traditional banks or government-subsidized credits: they only have access to local credit providers who charge high interest rates. This limitation hinders them from growing their businesses and exacerbates the economic disparities between the two groups.
Aiming to support the economic empowerment of the tibo-tibo in North Sulawesi, Indonesia, USAID INVEST launched “Access to Finance: Integrating Financial Tools into Traceability Systems for Small-Scale Fisheries,” a project designed to help these women overcome barriers to financial inclusion.
Working with the Indonesian-based organizations MDPI, Marine Change, and AlterMyth, INVEST is using financial technology (fintech) to help the tibo-tibo obtain the financial services they want and need. Recently, I caught up with Jessamy Nichols, the project’s activity manager, after she returned from Indonesia where she participated in the project’s first capacity building and fintech training for the local fish sellers.
The following interview has been edited for clarity and length.
Emily Langhorne: Could you tell us about the goals of this project and the strategy INVEST is taking to help women sellers overcome financial barriers?
Jessamy Nichols: INVEST’s work on this project is layered over another existing USAID effort, the USAID Oceans Project, which is already working in Indonesia with a focus on traceability and sustainable ecosystem management for the fisheries.
The Oceans Project created a traceability app called Trafiz, which is being used in Southeast Asia at different fishery sites. It helps those catching, selling, and buying the fish track certain metrics that matter for sustainability, such as the type of fish caught, the amount of fish caught, where the fish was caught, and where it was sold.
This information then builds into consumer knowledge in other countries. For instance, if you buy fair trade tuna at Whole Foods, you can discover exactly where it was bought, and which seller purchased it, and from which fisherman.
All these factors contribute to our better understanding of these ecosystems. They help us answer questions, like: What’s being sold on the market? Are the fish populations staying the same? Are we seeing a decline in certain species?
It’s also helping the people who work in the fishing industry to think about sustainability. If they can see the data that shows evidence of population decline or overfishing, they begin to think about sustainable fishing because they can see the long-term importance of sustainability to their work.
INVEST is approaching women’s economic empowerment in the fishing industry with a fintech lens and layering that lens on top of those traceability and ecosystem management priorities. We’re working in North Sulawesi, primarily at three fishery sites, focusing on the women fish sellers and primarily on those sellers who are the first-buyers of tuna stock.
Our goal is to figure out what barriers these women face in accessing finance and then help them address those issues through a holistic approach that combines financial management training, capacity building, and sustainable fisheries management.
Langhorne: We hear a lot about fintech these days. What is fintech? How can it help empower women economically in developing countries?
Nichols: Basically, fintech uses technology to bring banking and financial services closer to the individual, which is particularly valuable to those living in remote or underserved populations. For instance, if you can use your phone to pay bills, deposit checks, or submit a loan application, then that brings the services to you. You no longer have to go to a bank to access them.
It’s important in developing countries because people can’t always get to a brick-and-mortar bank, but if they have a smart phone, they can get the services they need without having to travel. Using technology to close that financial gap can make a big difference, especially for women, who are often more limited in accessing a bank because of childcare responsibilities or because they are micro-entrepreneurs who can’t take time off during the workday because doing so would result in a loss of income.
Langhorne: Can you talk a little more about the role of women in Indonesia’s fishing industry?
Nichols: Women aren’t typically the fishers because there is a cultural belief that women are bad luck on boats, but they can be sellers and business partners, or they can manage the cash and accounts for a business. They can also work as added service contributors, like the fufu, who buy fish second-hand and then smoke it and sell it as a different product.
Langhorne: In what ways have women sellers been excluded from fisheries management activities?
Nichols: Many of these places are still more traditional in that it’s customary for the men to handle the money, to be in charge of trade, and to hold leadership roles at various stages of the value chain. Many women are still in the more traditional role of small-scale seller although some have started to climb the ladder, so to speak. Some will manage the cash for different businesses. I met one woman, for instance, who was doing the books for an entire boat, so she got a cut of all its sales because she had positioned herself in an expanded role with more responsibility.
However, there are still some male fish sellers who haven’t quite caught on to the fact that the female sellers can manage their own money and grow their own businesses. A part of this project is actually a capacity building component that provides training to the men in the fisheries to teach them about the roles that women play, what else women can do, and why its beneficial to everyone if women take on more responsibilities.
Langhorne: Based on your observations at the first training, what are some of the needs of men and women in the industry?
Nichols: It was interesting because the first part of this training was differentiated for two groups — one for the male participants and one for the female.
The men received a very basic gender presentation that the women did not. That presentation covered things like, “let’s define gender”; “what are gender expectations”; “what are gender norms,” etc. That was sort of a bridge to broaching the subject of women’s financial empowerment, which might be a new concept for some of the men in attendance.
What the men and women said they wanted to gain from potential access to digital financial solutions was very different. The women often said they wanted a working capital loan to buy more fish whereas the men were thinking bigger. For instance, one man wanted to use these services to purchase his own boat. It was interesting to see the dichotomy in terms of how men and women thought about their business and its future growth. In general, the men were thinking a lot further along in terms of growing their businesses.
However, it was also really inspiring to see how the women lit up during the training. They said things like, “Oh, I could use this [app] to apply for a loan!” They started connecting the dots before we got to explaining the connections.
Langhorne: Could you say a little more about the training?
Nichols: This was the first training in the series, so it was pretty introductory. We presented an overview of the program, and local government representatives also attended and sort of gave their blessing, which helps all the fish sellers know that this is a legitimate program and that they aren’t being scammed, which can be a concern.
We also talked about sustainable fisheries management and the importance of not overfishing. We played a sustainability game, which the participants loved. We filled a bowl with four different types of candies representing different fish species. Everyone used a straw “to fish.” Then, we switched to using a spoon. Once we switched to the spoon, they picked up all the “fish” much faster, and certain candies disappeared quickly, indicating that if you use the wrong fishing approach — boats that trawl the bottom of the ocean and pull up everything — it’s not sustainable. If everyone uses “the spoon,” then there will be no fish left.
In some ways, sustainability felt like a surprisingly new concept, and participants didn’t always pick up on the point of the game immediately. However, after the lesson, people really seemed to understand the importance of the game’s message.
A few folks shared with us their observations about the fish populations over the last few years, discussing which fish populations they thought were going up and which they thought had declined. People are paying attention to those things, and I think the more we sit down and go through those connections in the trainings, the more they’ll understand how sustainability will influence their business in the long-term. Future trainings will build from here, focusing on financial literacy, how to use the Trafiz app, and how to tie it all together.
Langhorne: Could you speak in more detail about the financial barriers that the women sellers are facing?
Nichols: Sure. One of the biggest is access to working capital. A lot of the women buy the same amount of fish every day, sell about the same amount every day, and then use whatever they made to buy the fish again the next day. There’s rarely a notable profit: they aren’t taking much money home at the end of the day because a lot of it just gets turned around and recycled into the process.
They’re having trouble compiling the larger sums of money needed to grow a business. Many of them don’t have written records, so they can’t apply for a traditional loan. There’s also a problem with loan sharks in the system, and many of the women have signed up for bad loans — loans with 20 percent interest rates and terrible repayment terms. However, they’re taking what they can get because they have no access to good loan options, so they can’t get the surplus of cash that they need otherwise.
Other barriers to women’s economic empowerment in the fish markets, like in a lot of developing countries, is that women are hindered by time poverty and being location bound.
In each of these three fisheries, the timing of their business day depends on when the boats show up. At one site, the boat shows up at 4:30 in the morning, so naturally that’s when their business day starts because they need to be there to buy the fish fresh off the boat. Then, they are at the market from 5:00 a.m. to 2:00 p.m. After that, there is often an expectation that they go home and do the cooking, cleaning, and caring for the children, so they have limited free time. There’s no time to hop on the back of a motorcycle and go to the bank, apply for a loan, or deal with paperwork. They don’t have an excess of time to explore new opportunities. We encountered this problem with scheduling our trainings because women couldn’t devote a full day to attending because they would miss a day’s worth of selling.
Also, when selling the fish, they have to physically be at their stalls. You can’t just leave and go to the bank. Unless you have established some sort of partnership where your business partner or a familial relation will stand at the stall for you, you have to be there. Because if you aren’t there, the fish aren’t going to sell.
Langhorne: I assume that a lack of working capital means that most women fish sellers don’t have savings, either?
Nichols: Absolutely. That short balance of cash at the end of the day doesn’t give them enough to set aside for saving, and without proper record keeping, it’s difficult for them to judge how much money they should try to set aside each day based on sales. Many of the women we talked to said saving is something that they’re interested in and would like to get better at, but a lack cash flow has kept them from being able to execute on it.
An embedded part of the culture is the monthly practice of “arisan,” which is basically a savings club. The women sellers are members of these groups. Each month, all group members will contribute the same fixed amount — let’s say 20,000 rupiah — into a pot, and it works like a lottery system. At the end of the month, they’ll pull out one person’s name, and that person will get the entire balance of it. It’s a nice way to boost your business, getting a surprise 200,000 rupiah. It also creates a social network among the women because they make it an event of sorts, kind of like we would do with a book club.
One of the financial service providers (FSP) that INVEST is looking to partner with wants to use that existing relationship — the network created by the savings clubs — to offer group loans to women fish sellers. The FSP stated that the women sellers feel that they can manage the risk of a loan if they are all accountable to each other. Because of these existing structures, the FSP believes that a group loan would be a culturally appealing financial vehicle.
The provider is still working out the details of how the data for the group loan would come in, but the idea is that all the women in the group would be responsible for submitting their own businesses statements and financial records captured in Trafiz. Then, there would be an established point person who is issued the large loan, and that person would be responsible for dispersing it to each member. The financial institution will also have an employee who is in the field and can follow up with the group, come to their meetings, and remind them about payments each month.
This financial institution isn’t worried about default. We talked through it, and the representative said that they believe that in this system the women will be accountable to each other for paying back the money on time.
Langhorne: A lack of record keeping keeps coming up as a barrier. Why is this such an issue for the women sellers?
Nichols: Well, there’s a couple of factors. Basic literacy is one of them: the older tibo-tibo were not brought up learning mathematics or taught the importance of keeping records. But being there and seeing the women in action really helps you understand the other challenges.
Being in the port and fish markets is a lively experience. People are yelling and throwing fish baskets across the floor. Live auctions are happening. Suddenly, a massive tub of tuna is brought in and starts being auctioned off.
Transactions happen quickly. Six people might be at a fish seller’s table, looking at the stock at the same time. She might do quick sales for three of them, and, then, if another customer comes up, she’s not going to stop and record the previous transactions because she needs to make the next sale. These are cash-based transactions, too. In one of the markets, all the women have plastic bags dangling above their heads, hanging from the ceiling of the tent. That plastic bag is their cash management system.
So, ideally, they’d record every single sale they had, e.g. “I made 10 sales at these prices,” but a lot of times that’s not very realistic. A lot of the women we talked to told us that they wrote down how much money and what stock they started out the day with and then what they had at the end of the day, but they don’t know how they got there.
Langhorne: What types of financial support is INVEST recommending? What’s the strategy for using fintech to achieve economic empowerment for the women in the fisheries?
Nichols: We conducted a barrier assessment to learn from the women sellers what their priorities are in terms of services they wanted to see become available. We considered what they thought would be most beneficial to their businesses as well as what interventions were the most feasible.
We landed on creating a financial management dashboard that will go into the Trafiz app. That’s great because it can capture all the traceability data — fish types, quantity, etc. — and track all sales and expenses. There’s also a tab in that dashboard where women can track loans. It shows active loans, payment due dates, and the amount due per payment.
All this comes together in a nice graph that shows profits and losses by days, months, etc. That data is helpful in being able to apply for capital loan products, which is something the women sellers really want. We’ve talked to a couple of financial institutions, and their representatives said that having access to those exportable written records will allow them to be able to make those loans. Hopefully, there will be success stories coming out of this work where the women use these working capital loans to grow their businesses.
Langhorne: Is INVEST only looking at working with traditional banks? Or are they looking to leverage fintech to provide new types of financial services to women?
Nichols: One of them is not a traditional bank, but we are still pursuing opportunities with traditional banks because we’d like to provide the women with a couple of routes, if possible. The interest rates for all these options, however, are much better than existing loan shark options, around three percent regardless of which institution issues the loan. They have better payment terms, too. So we’re looking at some more nontraditional institutions and other apps we can work with as well as traditional banks.
Langhorne: What are the benefits of those other apps?
Nichols: Some provide additional services that could be integrated later, like paying electricity bills through the app. Paying bills through apps is something that a lot of the women we spoke with want. They want to be able to pay their kids’ school bills and for healthcare through an app. There’s a lot of app technology exploding in Indonesia, so there’s a lot of opportunities to build additional functionalities into what already exists. The idea is that those upgrades could be incorporated at a later stage. Since we heard a lot of desire to have it all in one place, developing something like an “upcoming bills” tab would be nice for the women in terms of creating an additional financial management tool.
Langhorne: If the pilot in Indonesia goes well, will this model spread?
Nichols: Well, the USAID Oceans Project operates across multiple countries in the region, so perhaps it could easily be scaled in the countries where it has a presence. With the infrastructure of the Trafiz app already in use, I’m hopeful that its financial component and the model of capacity building through trainings can spread.
