Helping Women Control Their Financial Lives through Digital Financial Services

> Posted by Lisa Kienzle, Global Director of Financial Services, Grameen Foundation

This is the first post in a three-part series that explores the role of digital financial services in expanding women’s control over their financial lives.

When women have more control over their own finances, as well as their household’s, good things happen. Studies have shown that more spending is likely to be directed toward food, water, children’s education and healthcare. Financial services can give women greater autonomy, and with it the ability to make decisions in the best interests of themselves and their children. One study shows that greater autonomy is associated with improved food security for women and their children.

Yet, 42 percent of women lack access to finance globally due to a variety of well-documented issues – such as limited access to bank branches and lack of documentation required to borrow.

Digital technology can help overcome these obstacles to accessing financial services. It’s attractive to financial service providers because it can help them reach more clients more efficiently and effectively. But the impact on women themselves can be even more profound, as it offers them more control over their finances. Grameen Foundation has been working on several projects that help get digital financial services (DFS) into women’s hands in ways that women can trust and that take full advantage of the benefits of DFS.

One important benefit of DFS to women is privacy. A woman who accesses her account over a phone has greater control over that account and who sees it. For example, government or agricultural payments are often made in cash, which means the entire community can be aware of how much money a women receives, and when.  But digital transfers are invisible to others, protecting the recipient from the possible demands of friends or family, and giving her greater independence around how she saves or spends her money.

Research bears this out. A study in Niger found that using mobile transfers to deliver cash payments increased women’s autonomy and decision-making. The households of these women were more likely to cultivate marginal cash crops primarily grown by women, which allowed women to earn more money. GSMA research in Rwanda found that women used mobile money because they felt empowered by the privacy that mobile money offered them to manage finances in a quick and secure way.

In other cases, women want the visibility enabled by DFS. The fact that financial service providers can view digital transactions means that women can build credit histories, which ultimately enable them to access loans and other financial products such as insurance. Globally, providers and mobile network operators are offering automated credit products based on digital transaction data trails (such as on-demand credit offered by M-Shwari or EcoCash Loans).  Some of these allow immediate access to capital for emergencies or short-term needs.

DFS help women through crisis in another way as well.  In the event of a shock, such as death in the family or a natural disaster, women can connect with their social networks of family and friends, quickly communicate their need and receive financial support via mobile money from remote contacts. This was the case in Kenya, where users of mobile money were able to absorb shocks better than non-users given their greater access to far-flung friends and family.

Not only does DFS give women greater control over their finances, but also over their time. Women who receive or make payments via digital channels instead of traveling to a branch have more free time and money, as they generally travel shorter distances and wait less time to make these transactions. And time is one of the most precious of resources for women in poor communities—crucial to every other aspect of their lives, from child care to income generation.

In all cases, women want control – control over what money they have, how it is saved or spent, and who has access to that financial information.  At Grameen Foundation, we believe in the power of digital tools to help women gain more control over their lives.  We work with pro-poor financial service providers to help them create new channels, or outlets, for reaching women digitally; we help these partners develop products to serve the unique needs of women; and we ensure that women have the financial and digital literacy needed to use these services.

In some cases, we find that a woman needs to be able to work with a trusted agent, someone who can directly help her understand and use the services available.  That’s why we have helped to develop women as banking agents in the Philippines.  There, we have created an independent network of female financial agents who work out of their neighborhood sari-sari (variety) shops. In West Africa, we are using digital technology to help women in savings groups get access to bank accounts.

Once women are connected, the digital platform can be leveraged to bring even greater value to women, their families and communities.  For example, in Colombia we use digital technology to collect agricultural information, and then use that data to assess credit risk and unlock credit for farmers.  In India, we use the digital channel to deliver tailored messages to women to help them make better use of their digital accounts.

Digital financial services can give women greater autonomy and control over their financial lives, and with that new opportunities to build a secure future.  In upcoming posts, we’ll tell you more about some of the strategies we believe work best to accomplish these goals.

Image credit: Arifu

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