Uganda Securities Exchange (USE) recently revealed that only 22 percent of investors in the stock market are women, shedding light on a significant gender disparity in the financial sector. While there has been a slight improvement in Uganda’s saving culture, a considerable portion of women’s savings remains uninvested, raising questions about the underlying reasons and the need for proactive measures to promote women’s participation in equities investment.
Mr. Paul Bwiso, the Chief Executive Officer of USE, highlighted this disparity during a breakfast meeting hosted by the exchange. He emphasized the importance of encouraging women to become more proactive in the stock market, suggesting that there are financial instruments and resources available for investment. Currently, the USE has approximately 200,000 securities central depository accounts, but only 41,000 of them hold shares. This discrepancy indicates that a significant number of account holders, particularly women, are not participating in trading activities.
One factor contributing to this gender disparity is that women in Uganda are more inclined towards savings schemes rather than equity investments. While saving is an essential financial practice, the failure to invest money in government securities and stocks means that women are missing out on the potential for their savings to grow and generate substantial returns.
Ms. Kate K. Kiiza, the Executive Director of dfcu Bank, emphasized the need to move beyond saving and start investing. She pointed out that simply stashing money away in savings accounts may not be the wisest financial strategy in the long term. Instead, women should consider diversifying their portfolios by investing in government securities, stocks at the Uganda Securities Exchange, or joining investment clubs to harness the growth potential offered by the equities market.
The gender disparity in stock market participation can be attributed to several factors:
- Lack of financial education: Many women may lack the necessary financial education and awareness to confidently engage in stock market activities. Addressing this gap through educational programs and initiatives is crucial in empowering women to make informed investment decisions.
- Risk aversion: Women tend to be more risk-averse when it comes to investment decisions, often preferring the perceived safety of savings accounts over the potentially volatile stock market. Financial institutions and government agencies can work to provide resources and support to help women understand and manage investment risks.
- Gender norms: Societal and cultural norms can influence women’s financial behaviors, including their investment choices. Efforts to challenge and change these norms can help create a more inclusive financial landscape.
- Lack of representation: The lack of female representation in the financial industry, including among financial advisors and stockbrokers, can deter women from entering the stock market. Encouraging more women to pursue careers in finance and fostering mentorship opportunities can address this issue.
To bridge the gender gap in stock market participation, it is essential to implement targeted strategies aimed at educating and empowering women to explore the opportunities presented by the equities market.
Promoting financial literacy, providing access to investment resources, and challenging traditional gender roles are steps in the right direction to ensure that women can fully benefit from the potential for financial growth and security offered by stock market investments.