This blog post was written by Swati Mehta, independent consultant and development researcher, and Liz McGuinness, Senior Director and thematic lead for Women’s Financial Inclusion at CFI, in collaboration with Astrid de Valon who leads the World Food Programme’s (WFP) work on Digital Financial Inclusion and Women’s Economic Empowerment. This is part of a <a class="Hyperlink SCXW224207048 BCX0" href="https://www.centerforfinancialinclusion.org/series/digital-cash-transfers-for-women" target="_blank" rel="noreferrer noopener">series</a> of CFI work done in partnership with WFP, with funding from the Bill &amp; Melinda Gates Foundation, that explores how we can improve the design and delivery of digital cash transfers for low-income women.

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<h1>WFP’s New Policy Prioritizes Women to Receive Cash Transfers on Behalf of Their Households</h1>
Today, digital innovations are reshaping the way we manage money and helping to advance digital financial inclusion. Specifically, the digitization of cash transfers is helping to scale up humanitarian assistance and government-to-people (G2P) payments. However, unless these digital advances have a deliberate gender-focused approach, they risk missing the opportunity to advance women’s financial inclusion and increase their empowerment.

Recognizing the transformative power that directing cash transfers to women can have, WFP’s <a href="https://reliefweb.int/report/world/wfp-cash-policy-harnessing-power-money-help-people-survive-and-thrive" target="_blank" rel="noopener noreferrer">revamped cash policy</a> prioritizes sending money to women’s accounts on behalf of their households whenever possible. WFP is the world’s largest provider of humanitarian cash. WFP provides assistance to the people who are most at risk of going hungry. Two-thirds of these people live in conflict settings, the majority are women, and many live in hard-to-reach areas with limited access to services. In 2022, WFP sent $3.3 billion to assist 56 million people in 72 countries, with cash-based transfers constituting 35 percent of all WFP assistance. Currently, 1.3 million women receive money from WFP on their own accounts for their families. With their new policy in place, WFP’s goal is to reach 10 million women in the next few years.

This policy change was supported by a <a href="https://www.centerforfinancialinclusion.org/series/digital-cash-transfers-for-women">series of studies</a> run jointly by CFI and WFP to explore how providing women with their <a href="https://www.worldbank.org/en/publication/globalfindex" target="_blank" rel="noopener noreferrer">first access</a> to digital solutions and financial accounts can lead to increased economic participation and reduce poverty in their households and communities.
<blockquote>CFI and WFP found that carefully designed cash transfer programs that send money directly to women on behalf of their households can not only enhance household well-being and increase women’s empowerment, but can often reduce the risks of intimate partner violence (IPV) as well.</blockquote>
Sending money to women on behalf of their families raises several questions about potential risks that could come from changing how cash transfers are delivered and to whom. Through a comprehensive desk study and interviews with expert stakeholders, CFI and WFP found that carefully designed cash transfer programs that send money directly to women on behalf of their households can not only enhance household well-being and increase women’s empowerment but can often reduce the risks of intimate partner violence (IPV) as well.  However, under certain conditions, cash transfers to women may still trigger instances of IPV in contexts where rigid gender norms are deeply ingrained. To understand these conditions, it is useful to examine the impact pathways and risk factors that link cash transfers and IPV.
<h1>Understanding the Link: Cash Transfers and Intimate Partner Violence</h1>
There are three pathways through which cash transfers can either reduce or exacerbate the risk factors associated with IPV. In one pathway, cash increases household income, thereby <a href="https://academic.oup.com/wbro/article-pdf/33/2/218/26000886/lky002.pdf" target="_blank" rel="noopener noreferrer">reducing conflict</a> due to economic insecurity and related emotional stress. In these cases, cash transfer programs have proven to positively impact household economic security, leading to reduced reliance on negative financial coping mechanisms, enhanced emotional well-being, and reduced IPV.

&nbsp;

 <img class="aligncenter wp-image-46471" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2023/10/Cash-Transfers-IPV-Three-Pathways.png" alt="" width="808" height="727" />

<img class="aligncenter size-full wp-image-46472" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2023/10/Screenshot-2023-10-10-at-1.32.46-PM.png" alt="" width="854" height="45" />

Comprehensive studies across diverse contexts have consistently shown a reduction in IPV. A <a href="https://academic.oup.com/wbro/article-pdf/33/2/218/26000886/lky002.pdf" target="_blank" rel="noopener noreferrer">review of 22 studies</a> spanning Latin America, Africa, and Asia found that in 16 of those studies, cash transfers resulted in reduced IPV. Another <a href="https://cdn.odi.org/media/documents/11316.pdf" target="_blank" rel="noopener noreferrer">meta-analysis</a> on the effect of cash transfers found that the bulk of the evidence pointed towards either a reduction in IPV or no change in IPV. There is an <a href="https://ebrary.ifpri.org/utils/getfile/collection/p15738coll2/id/135938/filename/136149.pdf" target="_blank" rel="noopener noreferrer">expanding evidence base</a> arising from research conducted across diverse geographies and settings examining the role of complex design features and post-program impacts.

Other studies have shown that when transfers increase the amount of cash in the household, it may in fact increase intra-household conflict and IPV when there are disagreements about how to use the money, as seen in the second pathway. Similarly, programs in which cash transfers increase women’s economic empowerment through increasing their confidence or financial autonomy may shift household dynamics which can lead to either reduced or increased risk of IPV depending on whether there is a positive or negative reaction to women’s newfound status, as seen in pathway three.

The study confirmed that while directing funds to women’s accounts for their households can indeed bring additional benefits for women, they must be coupled with complementary initiatives to mitigate potential backlash resulting from the shifts in household dynamics. 
<h1>How to Best Design Cash Transfers Prioritizing Women as Recipients on Behalf of Their Households</h1>
It is evident that there can be real benefits in directing cash transfer payments to women. Yet research is limited on the differential impact of IPV based on the gender of the primary recipient. Therefore, it is important to design interventions to mitigate any unintended IPV risks when cash is directed to women on behalf of their households. Experience and evidence suggest that policymakers and program managers pay special attention to how programs are executed and the context in which they are rolled out.
<h3>Execution Matters: Ensuring Sustainable Change </h3>
<blockquote class="pullquote--right">If programs are executed well, the reductions in IPV due to cash transfers could be sustained beyond the program term.</blockquote>
If programs are executed well, the reductions in IPV due to cash transfers could be sustained beyond the program term. While the evidence is still emerging, <a href="https://ebrary.ifpri.org/utils/getfile/collection/p15738coll2/id/135938/filename/136149.pdf" target="_blank" rel="noopener noreferrer">early studies</a> and operational guidelines (see World Bank’s <a href="https://openknowledge.worldbank.org/bitstream/10986/35641/5/Safety-First-How-to-Leverage-Social-Safety-Nets-to-Prevent-Gender-Based-Violence.pdf" target="_blank" rel="noopener noreferrer">Safety First</a> Toolkit and WHO’s <a href="https://apps.who.int/iris/bitstream/handle/10665/312261/WHO-RHR-18.19-eng.pdf?ua=1" target="_blank" rel="noopener noreferrer">RESPECT</a> framework) have highlighted the important role of complementary interventions to sustain reductions in IPV risk factors. These include livelihood trainings or productive asset transfers to improve income; trainings and initiatives to improve household financial management; parenting programs or discussion groups to improve relationships between the household members; and programs to improve women’s confidence, economic standing, and social capital, such as through livelihood trainings, financial planning, and other group-based activities.

A promising example of this type of long-term thinking and practical training is WFP’s cash transfer program in Jordan. There, as WFP transitions from value vouchers to mobile wallets, women in male-headed households are specifically encouraged to open the primary wallet for receiving cash assistance. To ease this shift and promote household acceptance, WFP conducts information sessions for the heads of households and spouses to educate them on wallet setup, benefits, and usage. The training materials stress the importance of multiple wallets within the household, presenting it as a family-sharing solution. While changing entrenched gender norms takes time, this intervention saw 11 percent of male-headed households outside camps and 5 percent within camps registering women to receive cash transfers via her own mobile.
<h3>Context Matters: Impact on IPV in Diverse Settings</h3>
Our research emphasizes the importance of <a href="https://ebrary.ifpri.org/utils/getfile/collection/p15738coll2/id/135938/filename/136149.pdf" target="_blank" rel="noopener noreferrer">contextual factors</a> in designing effective cash transfer programs that address IPV risks. In conservative contexts characterized by rigid gender norms, there may be a higher risk of backlash when women gain control over resources. This risk worsens in countries experiencing civil war or in conflict zones and among specific sub-groups of women, such as those with low educational levels or in households with constrained budgets or larger families. However, these settings also present opportunities for change by designing targeted interventions that empower women and thereby reduce exposure to some of the factors that make women vulnerable to violence. These include low bargaining power within household decision-making and a lack of control over financial resources.
<blockquote class="pullquote--left">Conservative settings present opportunities for change by designing targeted interventions that empower women, and thereby reduce exposure to some of the factors that make women vulnerable to violence.</blockquote>
In Uganda and the Democratic Republic of Congo, WFP and its collaborating partners successfully engaged the community by identifying and training both men and women community champions. These champions were carefully chosen from households where women were designated as the primary recipients of cash transfers delivered through digital financial services. Their role was to support and educate the wider community on the numerous advantages of digital financial services, and to address any questions or concerns raised by community members. The men champions also sensitized other men in their community regarding women’s access to and use of financial services and how that benefits the entire household.
<h1>Looking Ahead</h1>
CFI and WFP’s research shows that well-designed cash transfer programs have the potential to enhance household well-being, contribute to women’s economic power, and reduce risks of IPV. But doing so successfully requires a <a href="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2023/09/Sending-Cash-Transfers-to-Women-infographic.pdf">nuanced approach</a> that incorporates gender-transformative elements and engages multiple stakeholders. When done well, these programs can create an environment where women’s journeys are both secure and empowering. Economic empowerment for women is not just about dollars and cents; it's about giving them the tools they need to thrive, the power to control their financial destinies, and the freedom to live without fear of violence. When cash transfer programs are designed intentionally, considering local context, they can help us move closer towards the goal of women's economic empowerment, paving the way for brighter futures, stronger families, and more resilient societies.

Prioritizing Women to Receive Cash Transfers: What Are the Implications for Program Design?

This is part of a <a class="fui-Link ___10kug0w f3rmtva f1ewtqcl fyind8e f1k6fduh f1w7gpdv fk6fouc fjoy568 figsok6 f1hu3pq6 f11qmguv f19f4twv f1tyq0we f1g0x7ka fhxju0i f1qch9an f1cnd47f fqv5qza f1vmzxwi f1o700av f13mvf36 f1cmlufx f9n3di6 f1ids18y f1tx3yz7 f1deo86v f1eh06m1 f1iescvh fhgqx19 f1olyrje f1p93eir f1nev41a f1h8hb77 f1lqvz6u f10aw75t fsle3fq f17ae5zn" title="https://www.centerforfinancialinclusion.org/series/digital-cash-transfers-for-women" href="https://www.centerforfinancialinclusion.org/series/digital-cash-transfers-for-women" rel="noreferrer noopener" aria-label="Link series">series</a> of work done in partnership with CFI and WFP, with funding from the Bill &amp; Melinda Gates Foundation, that explores how we can improve the design and delivery of digital cash transfers for low-income women.

Cash transfer programs have emerged as a crucial tool in the global effort to combat poverty, overcome shocks and other adversities, and achieve the Sustainable Development Goals (SDGs). Cash transfers provide financial support to vulnerable households, enabling them to meet their basic needs, access essential services, and invest in income-generating activities. However, beyond the immediate economic relief they offer, cash transfer programs also have the potential to <a href="https://cdn.odi.org/media/documents/11316.pdf" target="_blank" rel="noopener noreferrer">address deeper societal issues, including gender inequality</a>. 
<blockquote class="pullquote--right">By putting money directly into the hands of women within households, these programs challenge traditional gender norms and empower women to make decisions about finances, thereby enhancing their control over economic resources.</blockquote>
<a href="https://blogs.worldbank.org/voices/building-back-better-means-designing-cash-transfers-womens-empowerment" target="_blank" rel="noopener noreferrer">Women's economic empowerment</a> is increasingly recognized as a central objective of cash transfer programs. By <a href="https://docs.wfp.org/api/documents/WFP-0000141256/download/" target="_blank" rel="noopener noreferrer">putting money directly into the hands of women within households</a>, these programs challenge traditional gender norms and empower women to make decisions about finances, thereby enhancing their control over economic resources. This not only contributes to reducing gender inequalities but also enhances women's access to formal digital financial services and potentially brings additional benefits such as <a href="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2022/12/Bridging-the-gap-1.pdf">increasing access to identification documents</a>. 

As we explore the potential benefits of directing funds to women, a critical question arises: could this approach exacerbate the risk of intimate partner violence (IPV)? This question probes the potential shifts in power dynamics within households and the increased vulnerability women might face as they gain control over financial matters. 

Is this concern rooted in perception, or does substantial evidence support these claims? To dig into this question, a <a href="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2023/09/Sending-Cash-Transfers-to-Women-Report.pdf">comprehensive study</a> conducted by CFI, in partnership with the World Food Programme (WFP) and funded by the Bill &amp; Melinda Gates Foundation, examined existing evidence and sought insights from experts in the field. The study's findings suggest that directing funds into the hands of women on behalf of their households can in fact reduce the risk factors associated with IPV. This positive outcome is primarily attributed to the alleviation of financial stress within households and improvements in emotional well-being. However, it is essential to acknowledge that despite the potential benefits, cash transfers to women may still trigger instances of IPV, especially in contexts where harmful gender norms are deeply ingrained.
<blockquote>Despite the potential benefits, cash transfers to women may still trigger instances of IPV, especially in contexts where harmful gender norms are deeply ingrained.  </blockquote>
Globally, <a href="https://www.who.int/publications/i/item/9789240026681" target="_blank" rel="noopener noreferrer">27 percent</a> of ever-married/partnered women, ages 15 – 49 years, have experienced physical or sexual violence by an intimate partner in their lifetime. Women living in the least developed countries and in countries facing conflicts are disproportionately affected with an even higher prevalence of IPV. Gender inequalities that restrict women’s access to basic services and rigid social norms that support masculinities based on power and control are <a href="https://www.who.int/news/item/09-03-2021-devastatingly-pervasive-1-in-3-women-globally-experience-violence" target="_blank" rel="noopener noreferrer">major risk factors leading to IPV</a>. Cash transfers directed to women on behalf of the household can challenge these norms by putting money in the hands of women. However, simply transferring cash is not enough and must be accompanied by <a href="https://apps.who.int/iris/bitstream/handle/10665/312261/WHO-RHR-18.19-eng.pdf?ua=1" target="_blank" rel="noopener noreferrer">programming to gradually transform gender norms</a>. 

In line with the "do no harm" principle, designing cash transfer programs that effectively minimize the risks of IPV is paramount, particularly in settings where such violence is prevalent. At the same time, it is crucial to consider the impact on IPV beyond the program’s duration and explore how the reduction in IPV can be sustained in the longer term.  
<h1>How to Design Cash Transfer Programs and Send Money to Women While Reducing Risk of Intimate Partner Violence  </h1>
From this research, CFI and WFP developed a <a href="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2023/09/Sending-Cash-Transfers-to-Women-infographic.pdf">guide</a> that details how to design cash transfer programs that enhance household well-being, increase women’s empowerment, and reduce the risks of IPV. It is important to note that effective design and implementation of cash transfer programs directed to women’s accounts should follow a comprehensive assessment of IPV risks, carefully considering contextual factors including prevailing gender norms, socioeconomic dynamics, and political conditions. 

Several key recommendations emerge from our analysis: 

<img class="wp-image-46448 size-full alignnone" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2023/09/Screenshot-2023-09-27-at-2.49.17-PM-e1695913799888.png" alt="" width="791" height="607" /> <img class="size-full wp-image-46449 alignnone" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2023/09/Screenshot-2023-09-27-at-2.49.32-PM.png" alt="" width="791" height="779" />

&nbsp;

The <a href="https://www.centerforfinancialinclusion.org/sending-cash-transfers-to-women-how-to-design-programs-that-enhance-well-being-while-safeguarding-against-intimate-partner-violence">full report</a> from the study details actionable insights backed by lessons and examples from diverse cash transfer programs.

Cash Transfers Directed to Women and the Implications for Intimate Partner Violence: Lessons for Program Design

When cash transfers are safely sent directly to women, they have the potential to address gender inequities by helping women meet basic needs, access essential services, and invest in income-generating activities. But prioritizing women as the primary recipients of cash transfer programs, and thus diverging from traditional practices where men are the heads of households, raises concerns about intimate partner violence (IPV).<span class="EOP SCXW226271306 BCX0" data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:240}"> This report examines existing evidence on the impact of cash transfers on IPV against women and proposes design approaches to mitigate and minimize those risks. While the report primarily focuses on evidence related to reducing the risk of IPV following cash transfers to women on behalf of households, it also underscores the potential that sending cash to women has for reducing existing IPV. The objective is to foster a constructive dialogue and encourage governments and humanitarian organizations implementing cash transfer programs to prioritize women as the recipients of cash on behalf of their households whenever feasible, while ensuring their safety and adequate support.  

This series, created in partnership with World Food Programme (WFP), the Center for Financial Inclusion (CFI), and the Bill &amp; Melinda Gates Foundation, shares how we can improve the design and delivery of digital cash transfers for low-income women.

Sending Cash Transfers to Women: How to Design Programs that Enhance Well- Being While Safeguarding Against Intimate Partner Violence

‘Responsible Finance’ is Not Responsible if it’s Not Gender-Intentional

Why is meal planning a recommended financial strategy for women but not for men with children, according to ChatGPT? And why is this important for financial services?

Natural language processing (NLP) tools can create human-like conversations. Perhaps the most well-known application of an NLP tool is ChatGPT, which <a href="https://www.theguardian.com/technology/2023/feb/02/chatgpt-100-million-users-open-ai-fastest-growing-app" target="_blank" rel="noopener noreferrer">reached over 100 million users two months after its launch</a> in November 2022. Many people have increasingly used ChatGPT as a tool for work or personal use. I wanted to test if ChatGPT showed gender bias when looking at finance-related applications, so I inputted a few prompts about financial services. The results are a reminder that while AI is a powerful tool, it is not free from problematic social norms and potential bias against women. This week CFI <a href="https://www.centerforfinancialinclusion.org/equitable-ai-for-inclusive-finance">released two new publications</a> to help strengthen industry conversations to mitigate against, monitor for, and correct harmful gender bias in inclusive finance. These publications are the result of CFI’s winning proposal to USAID’s <a href="https://www.usaid.gov/innovation/competitions/equitable-ai-challenge" target="_blank" rel="noopener noreferrer">Equitable AI Challenge</a>, implemented by DAI’s Digital Frontiers.
<blockquote class="pullquote--right">One simple prompt revealed three problematic differences. However, they reflect a complex problem requiring an urgent response.</blockquote>
When I asked ChatGPT, or GPT-3.5, to write financial advice to help men and women with children, the answers showed important differences by gender, as seen in the following screenshots. For instance, the tool recommended that men, not women, create or update their wills and designate beneficiaries for their assets. This result demonstrates an existing assumption that men with children are more likely to have assets or income than women with children. Moreover, GPT-3.5 advised only men, not women, to have a work-life balance and spend quality time with their families. Again, this shows a bias about gender roles in work and within families. Another blatant example was the recommendation GPT-3.5 gave to women, but not to men, about planning meals. The tool advised women to cook larger meals at home and plan their grocery shopping to save money.

One simple prompt revealed these three problematic differences. However, they reflect a complex problem requiring an urgent response — especially as many companies, including fintechs, incorporate AI tools, such as NLP, into their business models.

<img class="aligncenter size-full wp-image-46358" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2023/08/EqAI-ChatGPT-01.png" alt="" width="4038" height="3555" />
<h2>Growing Use Cases of AI in Inclusive Finance</h2>
AI has <a href="https://www3.weforum.org/docs/WEF_AI_in_Financial_Services_Survey.pdf" target="_blank" rel="noopener noreferrer">numerous applications in the financial sector</a>, such as revenue generation, process automation, risk management, client acquisition, and customer service. Companies are increasingly using AI to accelerate lending decisions and use alternative data — including social media, mobile phone activity, and satellite data — to measure creditworthiness. AI presents an opportunity to quickly expand access to financial services for populations without long credit histories, including women. Companies use facial patterns, voice recognition, and biometric data for know-your-customer (KYC) requirements and to verify customers’ identities. Insurance companies use AI algorithms to speed up claims processing. Companies are also using AI tools for client acquisition and customer service. Chatbots and virtual assistants help prospective and existing customers find information about financial products that meet their needs.
<blockquote>Instead of offering helpful customization, the financial advice given perpetuates outdated and unhelpful stereotypes. The resulting harm from biased AI systems used in financial services contradicts the goals of financial inclusion and has potential business and regulatory costs for fintechs and their investors.</blockquote>
However, while AI tools are making high-stakes decisions for the economic prospects and future of individuals, their businesses, and their communities, these systems are also introducing new risks, including data privacy vulnerabilities and unfair outcomes for certain consumers. Women have experienced negative effects, such as being unfairly rejected as “false negative” in credit decisions, or receiving higher pricing, lower credit limits, and more limited choices.  As the above experiment with GPT-3.5 showed, algorithms can provide different financial advice depending on a customer’s gender. When designed well, tailored solutions for different customer segments can increase usage by satisfying the specific needs of the group. However, in this case, instead of offering helpful customization, the financial advice given perpetuates outdated and unhelpful stereotypes. The resulting harm from these issues contradicts the goals of financial inclusion and has potential business and regulatory costs for fintechs and their investors.
<h2>Sources of Harmful Gender Bias</h2>
<img class="wp-image-46360 alignright" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2023/08/Screenshot-2023-08-25-at-7.40.18-AM.png" alt="" width="405" height="408" />

CFI has written extensively on the opportunities and risks of AI for inclusive finance, and in 2021, we released a <a href="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2021/03/The-Stories-Algorithms-Tell-CFI-publication-MAR21.pdf">framework to help understand algorithmic bias</a>. The framework included three buckets to categorize sources of harmful AI bias: 1) inputs (such as datasets and AI teams), 2) code, and 3) context.

Applying this framework to my experiment with ChatGPT illustrates a few examples of where differences in financial advice by gender may originate. However, it’s important to highlight that these possible explanations are purely theoretical, as we have not tested them empirically.

Inputs: NLP and AI algorithms are trained on data to make predictions and inform decisions. In this case, <a href="https://medium.com/@dlaytonj2/chatgpt-show-me-the-data-sources-11e9433d57e8" target="_blank" rel="noopener noreferrer">GTP-3.5 processed input data from the web, books, and WebText2</a>, which is culled from Reddit submissions. As you may imagine, in aggregate these input datasets compile a series of beliefs and social norms, such as the one that suggested that women save money through meal prepping.

Code and Context: As a model is being built, developers can use techniques to reduce biased responses by, for instance, penalizing the model for generating harmful or stereotypical content. AI developers, or other actors, can periodically review model outputs after launch and provide feedback and adjustments over time. However, if the teams testing the system are primarily men, problematic outputs — like from my experiment — may be less likely to be flagged.
<h2>A Path Forward </h2>
As with any technology that experiences exponential growth, stakeholders — like investors, donors, and regulators — must play catch-up, and many questions remain. How, amid all these changes, can concerned stakeholders understand, let alone contribute to, shaping the future of AI in a way that is responsible and equitable, particularly for achieving our target financial inclusion outcomes?

In the inclusive finance sector, many actors are increasingly interested in incorporating principles and tools that guide the responsible and equitable deployment of AI. However, although there is a proliferation of techniques and academic resources to identify, mitigate, and correct bias, our extensive review of over 120 guides and checklists showed a lack of tools appropriately designed for the financial sector.

Recognizing this gap, CFI developed and this week released a <a href="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2023/08/Equitable-AI-Guide.pdf">practical guide</a> to help impact investors identify harmful AI gender bias among their investee companies, and an <a href="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2023/08/Equitable-AI-Brief.pdf">accompanying brief</a> that presents some of the key challenges with building accountability and transparency for AI in inclusive finance and offers opportunities to strengthen the industry conversation. Recommended practices in the guide touch on data, inputs, and model building as well as crucial business practices including governance. For instance, in the case of OpenAI, the creator of GPT-3.5, the company publicly committed that AI should benefit all of humanity and wrote <a href="https://openai.com/safety" target="_blank" rel="noopener noreferrer">principles to guide their mission</a>. This stance may explain OpenAI’s six-month effort to make the new version of ChatGPT, GPT-4, safer and with hopefully fewer problematic outputs. I’ll be sure to check back with some prompts for GPT-4!

Read more about our work around equitable AI <a href="https://www.centerforfinancialinclusion.org/equitable-ai-for-inclusive-finance">here</a>.

<img class="aligncenter size-full wp-image-46361" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2023/08/Screenshot-2023-08-25-at-7.42.00-AM.png" alt="" width="2054" height="1034" />

*Note: In this blog, gender gaps refer to the gap between women and men. However, CFI acknowledges that gender includes non-binary populations such as LGTBQ communities. It is essential to highlight that this blog does not intend to dismiss the existence of non-binary people.

Gender Bias in AI: An Experiment with ChatGPT in Financial Inclusion

Artificial intelligence (AI) enables innovations in digital finance that can boost efficiency, cut costs, and expand consumer reach. AI provides scalable ways to determine the creditworthiness of individuals and businesses that historically lacked identification, collateral, and credit history. And by automating processes, AI can enable higher volumes of low-value transactions that make harder-to-reach segments more viable customers. However, while AI presents tremendous opportunities, deploying AI also comes with significant risks – one being inequitable outcomes for marginalized consumers, especially women. When applied at scale, the harms caused by AI counter the financial inclusion goals of many impact investors and their portfolio companies. While impact investors are well positioned to take a proactive role in supporting companies in building and deploying equitable AI systems in inclusive finance services, they often do not have the tools required to assess and evaluate the fairness of algorithms. Recognizing this gap, the Center for Financial Inclusion (CFI) developed a practical guide for impact investors to help them identify harmful AI gender bias.
The Investing in Equitable AI for Inclusive Finance: A Risk Management Guide for Impact Investors gives an overview of the use cases of AI in inclusive finance and some of the drivers of harmful AI bias towards women. It also presents a snapshot of the state of practice in bias identification and mitigation and then provides a user-friendly checklist with an actionable set of questions to help impact investors understand the use of AI among their investee companies.
The accompanying brief, Prompts for Equitable Artificial Intelligence in Inclusive Finance: Strengthening the Industry Conversation, presents some of the key challenges with building accountability and transparency for AI in inclusive finance and discusses how CFI’s new guide can help raise awareness around the risks and costs of gender bias in AI. The brief also offers opportunities to strengthen the industry conversation on equitable AI, including advancing research, supporting consumer advocacy and journalism, and operationalizing data rights for consumers.
This work is the result of USAID’s <a href="https://www.usaid.gov/innovation/competitions/equitable-ai-challenge" target="_blank" rel="noopener noreferrer">Equitable AI Challenge</a>. Implemented by DAI’s Digital Frontiers, the challenge aimed to identify innovative approaches to address artificial intelligence inequitable outcomes. The Equitable AI Challenge asked for proposals that critically consider holistic and creative approaches to identify and address gender biases in AI systems within global development contexts. This work is the result of CFI’s winning proposal.

Equitable AI for Inclusive Finance

On the outskirts of sprawling Delhi, 34-year-old Maya opens her kirana, a small grocery store, for the day. Sleeves of shampoo packets and dry snacks line the walls around the counter where Maya serves up to 80 customers on a good day. She accepts payments in cash as well as digital payments on her smartphone, thanks to India’s successful <a href="https://www.forbes.com/sites/zennonkapron/2023/04/10/is-indias-upi-real-time-payments-system-ready-to-go-global/?sh=298e95e94d14" target="_blank" rel="noopener noreferrer">Unified Payments Interface (UPI) system</a>. However, while Maya’s name is registered as the business and bank account owner, she does not know much about the bank account or the business finances beyond her handwritten ledger book. Instead, her husband manages the banking relationship, and she must ask him for more cash or information about the account balance.
<blockquote>Many registered businesses are owned and managed by women only on paper; their lived realities are much different.</blockquote>
According to the Indian Ministry of Micro, Small &amp; Medium Enterprises (MSMEs), <a href="https://msme.gov.in/msme-annual-report-2022-23" target="_blank" rel="noopener noreferrer">women only own 20 percent of Indian MSMEs</a>. While this is already a small figure, ​​​​<a href="https://www.centerforfinancialinclusion.org/fight-gender-inequality-prioritizing-womens-customer-experience-in-product-design-and-complaint-resolution-processes">interviews conducted in March 2023</a> with 38 women business owners in India suggest that this number may be even lower. Many registered businesses are owned and managed by women only on paper; their lived realities are much different.

<img class="aligncenter wp-image-46289" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2023/08/Nina-Liew-blog-graphic.png" alt="" width="1009" height="235" />
<h1>Challenging Existing Norms</h1>
Providing financial services to women in low- and middle-income countries <a href="https://www.povertyactionlab.org/policy-insight/designing-financial-services-and-social-protection-programs-enhance-womens-economic" target="_blank" rel="noopener noreferrer">does not necessarily result in economic empowerment</a> if women do not or cannot make the decisions about their finances. Of the Indian women micro- and small-business (MSE) owners interviewed, over one-third relied on a man — typically a husband or brother — to manage or assist in their use of financial services, even if the woman was the registered owner of the business and bank account. When asked why, women said it was because of personal preference, a lack of confidence in operating the account, or that it was the man’s choice. This was true of interviewees with a master’s degree as well as those with lower levels of formal education, illustrating the pervasiveness of gender norms across education levels.

Managing the business’ day-to-day finances extends to resolving issues with a bank or fintech. Women who rely on their husbands or brothers to operate their bank accounts will often wait for them to contact the agent -- who is usually a man -- to resolve any complaints. This process is time-consuming and causes friction in women’s daily business activities. Consequently, these women may turn away customers if they do not have enough cash or lack information on accessing financial services for business improvement or growth.

For women in India to fully realize their economic contribution to the Indian economy, we must challenge and change existing norms. The current lack of equality represents a missed opportunity as bona fide access to formal financial services enables women to build their assets and wealth, improving their wellbeing and the wellbeing of their families.
<h1>Benefits for Women and Businesses</h1>
The burgeoning fintech sector has the pivotal opportunity to create better outcomes for women. India’s fintech sector is one of the fastest growing in the world, with approximately <a href="https://www.bain.com/insights/india-fintech-report-2022-sailing-through-turbulent-tides/" target="_blank" rel="noopener noreferrer">USD $35 billion invested</a>, more than doubling India’s share of global fintech funding since 2016. However, many fintechs are “gender-neutral” and do not design intentionally for diverse genders, reinforcing discriminatory gender norms. For example, because women tend to have <a href="https://www.centerforfinancialinclusion.org/an-equitable-rebuilding-learnings-from-women-owned-msmes">lower rates of digital transactions or formal financial assets</a>, it can be more challenging for them to meet loan eligibility requirements. When fintechs have a gender-neutral approach, the <a href="https://www.inclusivefintech50.com/2022-insights" target="_blank" rel="noopener noreferrer">gender gap is 28 percent higher</a> than the gap for bank accounts or smartphone ownership.
<blockquote class="pullquote--left">Many fintechs are “gender-neutral” and do not design intentionally for diverse genders, reinforcing discriminatory gender norms.</blockquote>
Advancing gender-intelligent changes and developing strategies to overcome women’s specific constraints can help fintechs tap into the <a href="https://financialallianceforwomen.org/download/how-fintechs-can-profit-from-the-multi-trillion-dollar-female-economy/" target="_blank" rel="noopener noreferrer">$216 trillion global market</a> controlled by women. Research by the Financial Alliance for Women shows that fintechs could see a ​​​​<a href="https://financialallianceforwomen.org/download/how-fintechs-can-capture-the-female-economy/" target="_blank" rel="noopener noreferrer">70 percent increase in revenues</a> by converting new women customers at the same rate as men. While building economic power for women on its own is a compelling reason to inspire change, this financial incentive is an additional driving force for investor-backed and profit-driven fintechs to prioritize gender-inclusive design and compete in an increasingly crowded market.
<h1>Increasing Diversity Is a Crucial Driver of Change</h1>
One fundamental way that fintechs can adapt their strategies to benefit women is by increasing their organizational diversity. From its interviews with the <a href="https://www.inclusivefintech50.com/" target="_blank" rel="noopener noreferrer">Inclusive Finance 50</a> fintech winners, CFI found that women-led fintechs were <a href="https://www.inclusivefintech50.com/2021-insights" target="_blank" rel="noopener noreferrer">more likely</a> to explicitly target and serve more women customers and report gender segmentation data, which is necessary for gender-intelligent decision making. This staff diversity should extend to customer-facing roles, such as the agents and distributors interacting with women customers, and women business correspondents are critical in <a href="https://www.adb.org/publications/digital-doorstep-banking-female-banking-agents-lead-digital-financial-inclusion-through-the-pandemic-and-beyond" target="_blank" rel="noopener noreferrer">expanding financial inclusion</a>. Interfacing with women staff makes it easier for women business owners to manage financial matters as women place a higher value on building personal relationships with agents and building trust over time.
<blockquote class="pullquote--right">Women-led fintechs were more likely to explicitly target and serve more women customers and report gender segmentation data.</blockquote>
Investors and regulators can also incentivize and require fintechs to make these changes. For example, through <a href="https://www.womensworldbanking.org/what-we-do/gender-lens-investing/" target="_blank" rel="noopener noreferrer">gender lens investing</a>, Women’s World Banking works toward higher social and financial returns. Their in-depth approach uses fintech data to develop customized, strategic Gender Action Plans, and their first fund saw an <a href="https://www.womensworldbanking.org/what-we-do/gender-lens-investing/" target="_blank" rel="noopener noreferrer">83 percent increase in women reached</a> by portfolio companies. 

Although fintechs alone cannot bring about an overnight transformation in societal and gender norms, taking these steps represents a real and immediate opportunity to initiate change for the economic empowerment of women in India and beyond.



<a href="https://www.linkedin.com/in/camilla-nestor-640b70">Camilla Nestor</a>, Advisory Council Member of CFI and CEO of MCE Capital, teaches a financial inclusion course at Columbia’s <a href="https://www.sipa.columbia.edu/">School of International and Public Affairs</a> (SIPA). Each year, the course features a writing competition that gives students an opportunity to write a blog post on a topic of their choice related to inclusive finance. This piece was written by the winner of the 2023 writing competition, Nina Liew.

This work is inspired by a graduate research project conducted by students at Columbia University’s School of International and Public Affairs in consultation with CFI and with support from <a href="https://ifmrlead.org/">LEAD at Krea University</a>. Nina and the team of graduate students focused on digital financial inclusion and consumer protection for women MSE owners in India. They interviewed 38 women MSE owners, bank and fintech agents, and fintech executives in India in March 2023. 

Note: The story in this post was created as an amalgamation of interviewees.

Power in Practice – or Only on Paper? Addressing the Financial Gaps Affecting Women Business Owners in India

This blog post was generated from a research project conducted by a team of graduate students from Columbia University’s <a href="https://www.sipa.columbia.edu/" target="_blank" rel="noopener noreferrer">School of International and Public Affairs</a>, in consultation with CFI and with support from <a href="https://ifmrlead.org/" target="_blank" rel="noopener noreferrer">LEAD at Krea University</a>. The team focused on digital financial inclusion and consumer protection for women micro- and small-enterprise (MSE) owners in India and interviewed 38 women MSE owners, bank and fintech agents, and fintech executives in India in March 2023. Please note: Akanksha is a composite character based on interview anecdotes.  

It is the middle of the day in Noida in Uttar Pradesh, and an angry customer storms into Akanksha’s small mobile phone and banking agent shop. The customer demands to know why his parents have not yet received the money he transferred to them at Akanksha’s shop yesterday. To calm him down, Akanksha explains that the bank app’s server experienced an electrical outage in the morning that stalled all transactions. However, the customer continues to demand an immediate fix. 
<blockquote class="pullquote--left">As a woman, building trust with male customers has been particularly challenging, but she must do so since most customers are men. </blockquote>
In addition to running her shop, Akanksha is an agent for banks and fintechs, offering mobile money transfers and various utility services. In this scenario, she faces a tough decision. Akanksha must choose how to address the customer’s complaint – she can try to resolve the issue via the bank app, contact her area distributor — the middleman between banks or fintechs and the network of local agents serving customers, or close her shop and visit the bank. How she handles this complaint is critical, as she must maintain her customer base and the hard-earned trust of her customers. As a woman, building trust with male customers has been particularly challenging, but she must do so since most customers are men. 

Akanksha, a woman in her mid-thirties with a bachelor’s degree, is not confident in filing a formal complaint using the app, which only has instructions in English. She also does not want to file a formal complaint out of fear that staff may escalate her issue to upper management, damaging her relationship with bank staff or her distributor. She attempts to contact her distributor on WhatsApp, but he does not answer. Because her husband is busy at work, Akanksha has no choice but to close her shop early and walk to the bank to talk to a staff member in person.  
<h2 style="text-align: center;"><img class="aligncenter wp-image-46280" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2023/08/SIPA_quote1.png" alt="" width="1074" height="180" /></h2>
<h1>Minor Issues With Major Implications </h1>
While Akanksha’s story is fictional, it is not an uncommon situation for many women MSE owners in India. A team of graduate students from Columbia University interviewed 38 women in India who use digital financial services (DFS) to understand their user experiences with banking and fintech apps, especially concerning the complaints journey. The interviews revealed that a stalled transaction is just one of several common issues faced daily by women MSE owners and agents like Akanksha. Stalled transactions and outages are so common that one interviewee described this as “just a part of life.” Almost all interviewees (35 out of 38) experienced at least one minor issue like this when using banking or fintech apps. Because each instance takes valuable time to resolve and leads to lost revenue, the effects of “minor” issues can significantly impact MSE owners’ businesses. One interviewee reported closing her shop for 15-minute periods multiple times a day to walk to the bank and settle matters in person.  

Akanksha’s experience highlights some of the barriers to complaints resolution and consumer protection for women MSE owners in India, driven by low confidence in DFS and a reliance on personal relationships with distributors and staff. In an interview with one fintech CEO – whose company was also among the <a href="https://www.inclusivefintech50.com/" target="_blank" rel="noopener noreferrer">Inclusive Fintech 50</a> winners – she said, “Women do not come screaming and shouting; this never happens. Local partners are more approachable. It is a business relationship; if you go to that level, it is also a social relationship.” 

An example of this type of social relationship is how many women agents rely on and highly value their personal relationships with distributors who travel to different communities to collect and disburse cash to agents. One agent even described her distributor as her “mentor and guru.” However, this relationship can also be vulnerable; distributors can exploit agents who depend on them for operational needs and resolving issues. Furthermore, if complaints are made informally to the distributor, which is often true for women, distributors are not incentivized to formally record complaints. As a result, the absence of an official record limits management’s oversight of the challenges women agents face.  
<h1>Finding Solutions That Better Serve Women </h1>
<a href="https://www.microsave.net/2018/10/24/consumer-protection-in-the-digital-age/" target="_blank" rel="noopener noreferrer">Existing literature</a> points to factors such as literacy levels, a difficult interface, and a lack of trust that prevent the adoption and use of DFS. However, there remains a gap in understanding the challenges in post-adoption utilization of services, particularly in the face of weak consumer protection provisions by low-income women users. Therefore, in our study, we aimed to explore how consumer protection policies impacted the experiences of women MSEs in using DFS, particularly with complaint redressal.

We found that, generally, women were not comfortable with the process of submitting formal complaints. Despite fintechs and DFS providers having established complaints handling processes under their consumer protection policies, they are often inadequate in supporting their women users. This results in many women abandoning platforms altogether. 
<h2 style="text-align: center;"><img class="aligncenter wp-image-46281" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2023/08/SIPA_quote2.png" alt="" width="1075" height="180" /></h2>
The interviews with women users in India showed that they highly value personal relationships and prefer in-person complaint resolution. However, women face higher challenges to complaint redressal because of their strong preference for resolving issues through social interactions and providers’ lack of gender-sensitive consumer protection policies. As such, to accommodate women’s user preferences, banks and fintechs need to adopt <a href="https://www.centerforfinancialinclusion.org/the-case-for-a-gender-intelligent-approach-an-opportunity-for-inclusive-fintechs">gender-intelligent</a> strategies.

Through a gender-intelligent approach, banks and fintechs can better understand how women use complaint resolution processes and ultimately design offerings that address their specific needs. This approach can help <a href="https://www.centerforfinancialinclusion.org/the-case-for-a-gender-intelligent-approach-an-opportunity-for-inclusive-fintechs">change entrenched gender inequalities</a> and <a href="https://financialallianceforwomen.org/download/how-fintechs-can-capture-the-female-economy/" target="_blank" rel="noopener noreferrer">benefit</a> companies’ bottom lines. Therefore, solutions should focus on directly addressing women’s specific needs while considering the ability to achieve scale.

Based on the research interviews, we recommend that banks and fintechs consider the following:
<h3>1. Banks and fintechs should develop support features that strengthen women agents’ ability to use their apps confidently.</h3>
This approach could include robust in-person onboarding, training, and support in learning to use the app’s features. While this element is considered “high-touch,” <a href="https://www.accion.org/the-path-forward-for-human-touch-in-a-high-tech-world" target="_blank" rel="noopener noreferrer">the tech-touch balance</a> is vital in providing inclusive financial services. Women users also reported that certain apps and resources were only available in English. Consequently, financial service products should be available in local languages and cater to varying literacy levels.
<h3>2. Banks and fintechs should formalize the full scope of the complaint process for their digital financial services.</h3>
Our research found that many women agents resolve complaints through informal mechanisms such as calling, texting (including WhatsApp), or meeting in person with distributors. Therefore, banks and fintechs should update processes and incentives to record distributor interactions and include them in formal complaint resolution processes and metrics.
<h3>3. Banks and fintechs should build user communities that enable high-touch and in-person support at scale.</h3>
Due to the travel-intensive and vulnerable cash collection nature of the role, most distributors are men. However, there is an opportunity to engage women as distributors to support women agents – one example is creating an “ambassador” program where established and high-performing women agents onboard and help new women agents. The incentive for becoming an ambassador is recognition as an expert and leader within the community. While many of our interviewees said they did not know other women agents, we saw that those who had learned from other women had higher competency levels in using the bank and fintech apps.   
<h3>4. There should be more physical meeting spaces or local offices for women customers to meet staff and raise complaints.</h3>
For example, one gender-intelligent fintech established local meeting hubs to support women using fintech services. By providing a secure environment and personalized assistance, the space motivated women customers to raise issues and embrace a broader range of digital financial services, ultimately improving customer loyalty and lifetime value to fintechs.

These recommendations are merely the beginning of the transformative potential of digital financial services in advancing financial inclusion and consumer protection for women. By taking experiences like Akanksha’s into account during the product design and complaint resolution processes, banks and fintechs can forge a more inclusive complaints-handling strategy. Such an approach would enable women MSE owners and agents to thrive, expand their businesses, and achieve greater economic prosperity. When more women feel they can use DFS and fintech successfully, financial service providers can expand their business reach, demonstrating that gender-intelligent design is a win for all.

Fight Gender Inequality: Prioritizing Women’s Customer Experience in Product Design and Complaint Resolution Processes

The financial inclusion landscape has changed drastically since the Global Partnership for Financial Inclusion (GPFI) was established over a decade ago. The <a href="https://www.worldbank.org/en/publication/globalfindex">Global Findex 2021</a> revealed that the inclusive finance sector has made significant progress in access — with worldwide account ownership reaching nearly 76 percent of the global population. This uptick largely has been driven by rapid digitalization, investments in digital public infrastructure, and enabling policy environments across several countries.

We should celebrate these accomplishments and continue to focus on the benefits for low-income consumers. There are plenty of examples of how financial services have been designed to support low-income populations. <a href="https://www.worldbank.org/en/publication/globalfindex/Report" target="_blank" rel="noopener noreferrer">In Kenya</a>, mobile money users received remittances from their social networks in times of need to avoid cutting back on essential spending. In Bangladesh, we have seen a reduction in extreme poverty levels due to increased mobile money remittances from people migrating to cities to support their families.

However, there is still work to do, especially to reach the most vulnerable populations. Going forward, it is important that we consider the consumer segments that remain excluded and the underlying reasons behind this exclusion while also continuing to better understand newer risks that are emerging and becoming increasingly relevant.

We must address existing vulnerabilities that stem from poverty, low-income levels, limited financial education, and external conditions that can exacerbate these vulnerabilities, such as the availability, or lack thereof, of adequate infrastructure or consumer and data protection mechanisms. To help classify types of vulnerabilities that can arise, CFI uses a <a href="https://www.strivecommunity.org/insights/financial-services/consumer-protection" target="_blank" rel="noopener noreferrer">vulnerability framework</a>. This framework categorizes the four types of vulnerabilities specific to digital financial services as information vulnerability, supply vulnerability, redress vulnerability, and impact vulnerability.
<blockquote>It is important that we consider the consumer segments that remain excluded and the underlying reasons behind this exclusion while also continuing to better understand newer risks that are emerging and becoming increasingly relevant.</blockquote>
The GPFI has worked over the last few years to address some of these vulnerabilities. The importance of infrastructure is the object of the current Indian Presidency; consumer protection and financial education were addressed during the Italian Presidency; and a <a href="https://www.g20smecasestudies.org/case-studies" target="_blank" rel="noopener noreferrer">G20 living database</a> of best practices of MSMEs innovative financing was created during the Indonesian Presidency.

Despite much progress in addressing vulnerabilities low-income people face, new risks continue to emerge.
<h4>1. Economic recovery from the pandemic remains a priority for several nations.</h4>
The pandemic heavily impacted micro- and small- enterprises (MSEs) and women – two large consumer groups who are often excluded from formal financial services. The pandemic exposed that despite <a href="https://www.worldbank.org/en/publication/globalfindex/Report" target="_blank" rel="noopener noreferrer">recent progress in narrowing the gender gap</a>, it remains a priority focus area for the sector. GSMA’s mobile gender gap reports reveal that women’s digital inclusion is slowing across low- and middle-income countries for the second consecutive year, and several other reports have shown that we need to address the challenges women have in using financial services to see the full gains of access.
<h4>2. Geo-political risks are increasing the mass displacement of people, disproportionately affecting low-income individuals, and heightening the risk of financial exclusion.</h4>
Coping strategies require helping low-income people and vulnerable consumers adapt and transition to new livelihoods. Cash transfers, insurance, and remittances can play a crucial role, but we must first address problems with innovation, distribution, and the cost of remittances.
<h4>3. The wide adoption of new technologies in the financial sector, if not correctly governed, poses a significant risk of further excluding and exploiting vulnerable populations.</h4>
This is especially true as AI becomes more entrenched in every facet of financial products and services and distribution channels, and instances of <a href="https://www.cgap.org/research/reading-deck/evolution-of-nature-and-scale-of-dfs-consumer-risks-review-of-evidence" target="_blank" rel="noopener noreferrer">fraud and cybercrime are on the rise</a>.

&nbsp;

To deliver financial services responsibly, we must address current and emerging exclusions, anticipate possible sources of vulnerability, and consider who might be adversely affected. The inclusive finance sector has the potential to develop products and services that allow consumers, especially the most vulnerable, to become more resilient and adapt to their new realities.

In response to these challenges, <a href="https://globalrff.org/" target="_blank" rel="noopener noreferrer">RFF</a> launched three working groups: 1) Responsible Recourse, led by the Better than Cash Alliance (BTCA) and Bangko Sentral ng Pilipinas; 2) Responsible Digital Credit, led by CGAP, and 3) Responsible AI, led by the office of the UNSGSA and CFI. Each group aims to influence and build a collective effort towards a more responsible finance ecosystem and will present its findings at the upcoming event in India.

RFF convenes July 5-7, 2023, in Bengaluru, India, under the theme of Shaping a Responsible Digital Finance Ecosystem. Visit the <a href="https://globalrff.org/july-2023" target="_blank" rel="noopener noreferrer">RFF website</a> to view the full agenda.

Outlining Priorities for Responsible Finance

The Intersection of Financial Inclusion and Gender during the COVID-19 Pandemic: Insights from Impact Investing

Swati Mehta

Elizabeth (Liz) McGuinness

Mayada El-Zoghbi

Joanna Ledgerwood

Lucciana Alvarez Ruiz

Alexandra (Alex) Rizzi

Nina Liew

Nikita Chettri

Evelina Durlind

Leonie Rauls

Ulayya Gempur Tirani

Marina Santos Piacente

Magda Bianco

Jacob Tate

Sophia Sunderji

Evelyn Stark

Nina Holle

Julia Arnold

Shradha Modi

Anindita Chakraborty

Rima Patel

India

South Asia

Digital Payments

Enabling Environment

Women

Access Usage Gap

Responsible Product Design and Delivery

Consumer Protection

Responsible Digital Finance

Alternative Data

Digital Financial Services

Fintech

Impact Investing

Underserved Groups

Fintechs

Small Business Owners

Credit

Financial Inclusion Strategy

Challenges and Crises

Digital Transformation

Financial Capability

Policy, Regulation and Government Initiatives

Blockchain

Mobile Banking

Financial Health

Resilience

Agricultural and Rural Finance

Smallholder Farmers

Blog Post

Report

Toolkits and Guides

India is a global leader in financial inclusion. For over a decade, Accion has worked with and learned from India’s innovators, investors, and policymakers to expand economic opportunity for its people and businesses.

FIW Recap: Women’s Financial Inclusion Remains Key Global Focus

The theme for Financial Inclusion Week (FIW) 2022 was “Inclusive Growth in a Digital Era.” For years, financial products and services have been moving digital, and the pandemic further accelerated the trend toward digitalization. As digital becomes the new norm, we must ensure that these services are safe and inclusive of all people and do not exacerbate the exclusion of marginalized and vulnerable groups. FIW 2022 explored how the global financial inclusion community can harness digital innovation to expand inclusive financial services for all people across the globe, ensuring that products meet customer needs, have appropriate safeguards in place, and contribute to inclusive economic growth.

FIW 2022 hosted 125 live and on-demand sessions, featuring nearly 400 speakers from around the world. With over 3,330 registered participants from 2,000 organizations and 146 countries, FIW 2022 was the largest event to date.

To capture the learnings and key takeaways from the many Financial Inclusion Week 2022 sessions, CFI is compiling short summaries that highlight content and ideas from FIW 2022 sessions on select topics.

FIW 2022 Recap

As each year comes to a close, it’s natural to reflect on the key moments and events that shaped the year. Beyond the political and economic events and trends – the war in Ukraine, the rise in inflation globally, the floods in Pakistan, and COP27 – the field of inclusive finance itself is reshaping its contours to meet the moment. We saw this very visibly in this year’s <a href="https://financialinclusionweek.org/">Financial Inclusion Week (FIW)</a>, the largest event we have hosted to date – with virtual participants from 2,000 organizations across 146 countries. The topics covered reflect the priorities of global actors in inclusive finance, pointing to the direction the field is going.

<img class="wp-image-45545 aligncenter" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2022/12/Screenshot-2022-12-12-at-11.27.19-AM.png" alt="" width="967" height="429" />

To me, the scale of this year’s FIW and the coming together of the minds of stakeholders worldwide during this difficult time signals an urgent need and momentum to accelerate our understanding of how inclusive finance must evolve to address global challenges. With over <a href="https://financialinclusionweek.org/2022" target="_blank" rel="noopener noreferrer">50 hours of live content and 70 on-demand sessions</a>, FIW has something for everyone. While it would be amazing to watch the hours of rich live and on-demand content oneself, we know few people have this luxury. We have been reflecting on this at CFI and will launch a blog series that highlights takeaways on key topics covered during FIW 2022.

<img class="wp-image-45546 aligncenter" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2022/12/4_Closing_Plenary-2-1.jpg" alt="" width="960" height="761" />

FIW 2022 left me with several reflections on the state of the inclusive finance sector and what needs to be prioritized. While FIW covered many sub-topics, the overall theme for the week was “Inclusive Growth in a Digital Era,” exploring how our community can harness digital innovation to expand inclusive financial services and contribute to inclusive economic growth.

In hindsight, as I reflect on the content, I would revise the theme and say that this year’s FIW was really about: “How we can create shared prosperity in our digital era.” Many of the sessions at FIW highlighted that, despite digital financial services’ promise to create inclusive solutions, there are serious shortfalls in how the digital economy is evolving, and new risks and gaps are emerging. We learned that while access and usage continue to rise, indicators linked to resilience have worsened. Even more concerningly, numerous examples of fraud and online harassment were spotlighted during the sessions indicating that the digital economy has yet to pan out as the equalizer that we thought it would be.

Some key messages I took away from FIW 2022 include:
<h3>The future of micro and small enterprises (MSE) on digital platforms needs attention.</h3>
In a joint <a href="https://www.youtube.com/watch?v=0FCpTM0TAac" target="_blank" rel="noopener noreferrer">session</a> hosted by CFI and Mastercard Center for Inclusive Growth, panelists discussed the status quo – where platforms retain substantial bargaining power and most MSEs lack the skills or power to benefit fully from the economies of scale offered through platforms. While alternative business models, such as platform cooperatives or open networks, may be options worth exploring, integrating elements of these emerging models into today’s established business models is likely to produce the greatest benefits to MSEs and platforms alike. Sessions by CGAP on <a href="https://www.youtube.com/watch?v=8VlU8U3DOdI" target="_blank" rel="noopener noreferrer">digital platforms</a> and <a href="https://www.youtube.com/watch?v=iGzlBKRK-PU" target="_blank" rel="noopener noreferrer">fintechs</a> surfaced regulatory fragmentation, payment rails, and e-KYC norms as pressing issues limiting workers and MSEs from fully benefitting from the digital economy. Regulators, donors, investors, and other industry stakeholders should invest more explicitly to enable a rebalancing of power to favor MSEs.
<h3>Trust needs to be earned; regulators, providers, and consumer organizations each have a role in making that happen.</h3>
A <a href="https://www.youtube.com/watch?v=yXw-r70lLXc" target="_blank" rel="noopener noreferrer">session by Consumers International</a> shared evidence on both existing and emerging consumer risks. These included significant increases in consumer complaints in Fiji and major issues around trust in digital finance in India, where 60 percent of digital finance users surveyed stated that they stopped usage because of trust issues. While several digital financial services users sought redressal through customer care channels, 20 percent of respondents in India never had their issue resolved.

Regulators can play a critical role in shaping market conduct. Another <a href="https://www.youtube.com/watch?v=CJ9_P7bGOvA" target="_blank" rel="noopener noreferrer">session hosted by SPTF</a> provided compelling evidence of fraud and abuse in markets like Kenya and discussed what provider practices could help mitigate these risks. Fair Finance’s session brought up an example of how a regulator can step in to enable greater trust in the financial system for low-income consumers and businesses: they mentioned the Central Bank of Rwanda's approach, where they are working to build trust via a consumer protection law, retaining oversight of financial consumer protection, creating tools to compare providers, and establishing instant complaints systems that allow consumers to submit complaints through email and social media.

These sessions reinforced the need for rigorous research, progressive regulation, and market conduct supervision that incentivize providers to be responsible and strong consumer organizations who can advocate on behalf of the silent majority in most developing markets. Donors and investors working to support market development must ensure that these fundamental guardrails are in place before they scale innovations.
<h3>Regulation and regulators are important in addressing gender inequity and creating trust.</h3>
Gender inequity is perhaps the gap that received the greatest attention during FIW 2022. Toronto Centre’s panel on <a href="https://www.youtube.com/watch?v=ISoRGWNdaQQ&amp;list=PL30fMMRd3G_7IGUKLWAQm_Z3zDVIu6LCB&amp;index=28" target="_blank" rel="noopener noreferrer">Advancing Cybersecurity and Financial Inclusion</a> highlighted the large gender gaps – such as access to technology – and the greater vulnerability, whether harassment, gender-based violence, or outright discrimination, and looked at what regulators are doing to counterbalance the system that is stacked against women.

<a href="https://www.youtube.com/watch?v=FFIFIvuVo0U" target="_blank" rel="noopener noreferrer">CFI’s Edoardo Totolo</a> delivered one of the four keynotes and highlighted both the opportunities and the risks posed by new embedded finance players. He emphasized the increasingly important role unregulated non-financial actors play in the design and delivery of financial services and the regulatory ambiguity around who is responsible for what. His keynote ends with a cautionary note to regulators and policymakers to clearly define the regulatory perimeters, articulate the role of third-party actors, promote interoperability and open architecture, and above all, create a level playing field.
<h3>One-size fits all solutions are insufficient; segmentation is necessary.</h3>
Several panelists emphasized that low-income customers are not a monolith and recognized that low-income consumers occupy different societal groups, each with its unique strengths, challenges, and starting points. A key takeaway from these sessions is that when we design without understanding the specific segment we are trying to reach, we will de facto design products and services for men. Instead, we must be intentional and create solutions that address specific consumer needs.

<a href="https://www.youtube.com/watch?v=-jz8tnEuAIQ" target="_blank" rel="noopener noreferrer">AXA’s session</a> on developed markets, including Japan, the US, and France, provided a unique look at excluded segments and approaches providers were taking to be inclusive in these highly competitive and highly regulated markets. For example, French provider <a href="https://nickel.eu/fr" target="_blank" rel="noopener noreferrer">Nickel</a> noted their rapid trajectory of delivering a simple product with very clear and fair terms and relying on distribution systems that leverage existing points of sale used by low-income consumers. In another <a href="https://www.youtube.com/watch?v=jC2AmET0HXI" target="_blank" rel="noopener noreferrer">session by Mastercard Strive</a>, a panelist from <a href="https://www.withboost.co/" target="_blank" rel="noopener noreferrer">Boost</a> Nigeria noted that women-owned small businesses are not a homogenous retail segment. Recognizing that women business owners had varying levels of digital and financial capabilities, Boost adopted a range of strategies that tried to meet women where they were in their journeys. A <a href="https://www.youtube.com/watch?v=Yp5yhELqTqI&amp;t=12s" target="_blank" rel="noopener noreferrer">session hosted by the Kashf Foundation</a> noted that despite the progress prompted by the pandemic, the digital divide is a nuanced issue that merits attention. Affordability to broadband is perhaps the next frontier, particularly when women don’t always have full control of household income or phone ownership.
<h3>We need to focus on climate adaptation; prioritizing mitigation is not enough.</h3>
In his keynote, USAID’s <a href="https://www.youtube.com/watch?v=_hUipQztGXs" target="_blank" rel="noopener noreferrer">Songabae Lee</a> provided a realistic and sobering view of the limitations of development finance, noting that mobilizing capital is the current priority at the global level. Recognizing that private sector capital is best geared toward mitigation, while adaptation still requires grant funding, Lee urges the audience to take advantage of what’s currently open rather than beating on a closed door. The open door is to start by leveraging capital for mitigation and then work to advocate for and shift attention to adaptation.

A <a href="https://www.youtube.com/watch?v=IyUlwUPPY40" target="_blank" rel="noopener noreferrer">session hosted by BFA Global</a> on the business case for climate resilience adopts a more optimistic lens, where investors start recognizing the need to move faster toward adaptation. The session delved into the experiences of multilateral development banks (MDBs) in financing climate initiatives that can be leveraged for earlier-stage ventures, highlighted the creation of the <a href="https://gca.org/news/collaborating-to-accelerate-investment-in-climate-adaptation-and-resilience/" target="_blank" rel="noopener noreferrer">adaptation and resilience collaboration</a> with 18 organizations, and the importance of data and measurement to help move this agenda forward. The urgency of scaling climate adaptation finance was also highlighted in a <a href="https://www.youtube.com/watch?v=2qENaGgm_4k&amp;t=1s" target="_blank" rel="noopener noreferrer">session</a> organized by CFI, where panelists from SEWA, FSD Mozambique, and UNHCR unequivocally emphasized the threats and income shocks low-income communities and refugees were exposed to in the absence of solutions tailored to support adaptation and resilience building at the community level.

My colleagues will go deeper into some of these messages in the blogs to follow in this series. If you are interested in revisiting the recordings, all sessions from FIW 2022 are available online. Check out the full playlist <a href="https://financialinclusionweek.org/2022" target="_blank" rel="noopener noreferrer">here</a>.

For curated session lists by topic, please see the links below for the playlists we’ve developed thus far.
<ul>
 	<li><a href="https://www.youtube.com/playlist?list=PL30fMMRd3G_7YYIjKT10xi4v5vjOKbuLl" target="_blank" rel="noopener noreferrer">Women’s financial inclusion</a></li>
 	<li><a href="https://www.youtube.com/playlist?list=PL30fMMRd3G_4ysbJRWLiVICDCCHEKSTMY" target="_blank" rel="noopener noreferrer">Consumer protection</a></li>
 	<li><a href="https://www.youtube.com/playlist?list=PL30fMMRd3G_434ImijU6wxmZro4JHG7vu" target="_blank" rel="noopener noreferrer">Climate and inclusive finance</a></li>
 	<li><a href="https://www.youtube.com/playlist?list=PL30fMMRd3G_5l8T1UH24TIm7H-EM7gydP" target="_blank" rel="noopener noreferrer">Micro and small enterprises</a></li>
 	<li><a href="https://www.youtube.com/playlist?list=PL30fMMRd3G_5Mn-Gm3O2hgxyaSo9ajB7a" target="_blank" rel="noopener noreferrer">Digital assets and digital currencies</a></li>
 	<li><a href="https://www.youtube.com/watch?v=-jz8tnEuAIQ" target="_blank" rel="noopener noreferrer">Developed markets and inclusive finance</a></li>
 	<li><a href="https://www.youtube.com/playlist?list=PL30fMMRd3G_4yq2Ugx050YBIt4wwN5rMs" target="_blank" rel="noopener noreferrer">Impact measurement</a></li>
</ul>

End-of-Year Reflections

A woman's world changes when payments are designed to suit her needs, digitized, and directed into her own account. During the pandemic, however, women were often excluded from receiving humanitarian cash transfers because of a lack of access to basic identification documents. Humanitarian organizations have become key advocates to allow functional IDS – ration cards, refugee ID cards, cards provided by cash transfer programs from organizations like World Food Programme (WFP) – to be recognized as proof of identity. The ability to register a bank or mobile money account has enabled access to humanitarian payments for millions.

This report highlights the benefits of having an ID, the barriers for women in obtaining an ID, and how we can leverage cash transfers to facilitate women's access.

&nbsp;

This resource was developed in partnership with the World Food Programme (WFP) and the Bill &amp; Melinda Gates Foundation.

Bridging the Gap: How Humanitarian Cash Transfers Can Facilitate Women’s Access to IDs

Investing in digital financial capability is essential to support women navigating increasingly digitalized financial systems. A woman who is digitally and financially capable can evaluate, choose, and use financial services that enhance her life. Investing in her digital financial capability can contribute to meaningful access to and usage of financial services. This can be a positive step in improving economic opportunities for women and their families.

Approaches that work for women require going beyond traditional financial education to approaches that may require more time, support, and a deeper understanding of the social and <a href="https://www.centerforfinancialinclusion.org/normative-constraints-to-womens-financial-inclusion-what-we-know-and-what-we-need-to-know">gender normative constraints</a> that prevent women from realizing their economic potential.

This publication shares how we can improve the design and delivery of digital cash transfers for low-income women using a four-phased approach: diagnose, design, deliver, and document. It presents examples of promising interventions tailored to women’s needs and realities and offers practical suggestions and tools for market and ecosystem actors to support women’s digital financial capability.

This resource was developed in partnership with the World Food Programme (WFP) and the Bill &amp; Melinda Gates Foundation.

Making Digital Financial Capability Programs Work for Women

Imagine a woman, Rita, who owns a food shop in Delhi. She lives in a small home with her husband and two children. The incomes from her business and her husband’s job cover the rent for their small apartment, household essentials, and school expenses, while also allowing them to send money to their family in the village and save for future expenses. Climate change has intensified the monsoon season in the past few years, and two years ago, a record-setting flood caused damage to Rita’s shop and all her business supplies. She has been working hard to rebuild her business, but a lack of capital has prevented her from operating at full capacity. <a href="https://www.washingtonpost.com/weather/2022/04/28/india-pakistan-heat-wave-records/" target="_blank" rel="noopener noreferrer">An intense heatwave now is affecting Delhi</a> and posing new hurdles to Rita’s business. 

Rita’s situation is not unique and many small businesses around the world face similar challenges. Climate change disproportionately impacts low-income and vulnerable people and climate-related shocks are drastically altering the livelihoods and living conditions for many. Globally, MSMEs make up over <a href="https://www.un.org/en/observances/micro-small-medium-businesses-day" target="_blank" rel="noopener noreferrer">90 percent of firms and provide 70 percent of employment</a>, and many are struggling with intensifying climate risks. As part of CFI’s <a href="https://www.centerforfinancialinclusion.org/research/covid-19-and-msmes-data-and-analysis-to-understand-impact">longitudinal</a> research on the impact of COVID-19 on MSMEs in four different markets (Colombia, India, Indonesia, and Nigeria), we conducted a dipstick survey in 2021 to understand the consequences of climate shocks on MSMEs and the ways they are preparing to adapt to climate change.

Our research revealed three takeaways:
<h1>1  Climate Change is Impacting MSMEs and Hindering Their Recovery from COVID-19 Financial Impacts </h1>
Thirty-two percent of survey respondents reported that at least one climate shock – including flooding, sea level increase, heat wave, or drought – has impacted their business within the past five years. The types of climate shocks and their impact varied by country (see graph below).

<img class="size-full wp-image-44468 aligncenter" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2022/05/MSME-Climate-Graph1-1.png" alt="" width="2696" height="1308" />

While climate change impacts all people, women bear the brunt of the escalating climate risks. <a href="https://www.unwomen.org/en/news/in-focus/csw61/women-in-informal-economy" target="_blank" rel="noopener noreferrer">Women make up much of the informal economy</a> and their <a href="https://www.un.org/en/chronicle/article/womenin-shadow-climate-change" target="_blank" rel="noopener noreferrer">livelihoods are more likely to be impacted by climate risks</a>. CFI’s data indicates that women show a higher level of concern than men that climate change will affect their ability to operate their business and maintain their quality of life – 61 percent of women business owners were concerned about this compared to 52 percent of men.

Additionally, among the MSME respondents who had been impacted by a climate shock, <a href="https://www.centerforfinancialinclusion.org/the-precarious-state-of-msmes-understanding-the-impact-of-covid-19-and-opportunities-to-support-their-recovery">recovery from the financial impacts of the pandemic appears to be slower</a> than those who had not faced a climate-related shock (see graph below).

<img class="size-full wp-image-44469 aligncenter" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2022/05/MSME-Climate-Graph2.png" alt="" width="2766" height="1394" />
<h1>2  MSMEs Are Unable to Actively Prepare for the Accelerated Effects of Climate Change</h1>
Extreme climate events are becoming a more frequent phenomenon around the world. And for MSME owners with limited resources and time, preparing for climate change can be a challenge. Across all survey respondents, only 47 percent reported that they had an operating plan in place for business continuity (see graph below).

Sixty-two percent said they are confident in their ability to get a loan to rebuild their business following a climate disaster, and 53 percent said they had friends and family who could provide financial support in the event of a climate shock. During the COVID-19 crisis, help from friends and family was essential to the ability of MSMEs to survive. In the immediate aftermath of the pandemic, 44 percent of business owners in Colombia said they borrowed from friends and family compared to 11 percent who borrowed from a financial service provider. This demonstrates the importance of both formal financial services and informal networks in supporting climate resilience.

Only 23 percent reported that they had an insurance plan for climate disasters, and 38 percent said they had savings set aside to cope with climate disasters. While there were variations among countries in the strategies employed to combat a future climate shock, data suggests that MSME owners are more likely to rely on reactionary strategies than preventative ones.

<img class="wp-image-44470 aligncenter" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2022/05/MSME-Climate-Graph3.png" alt="" width="1022" height="881" />
<h1>3  MSMEs Need Support From Governments and Financial Services Providers to Adapt Their Businesses to Increasing Climate Risks</h1>
<a href="https://www.centerforfinancialinclusion.org/green-inclusive-finance-a-framework-for-understanding-how-financial-services-can-help-low-income-people-weather-climate-related-risks">CFI’s green inclusive finance framework</a> outlines four pathways – Mitigation, Resilience, Adaptation, and Transition – that help to understand how inclusive finance can support low-income and vulnerable populations prepare for climate-related impacts. Financial services can help MSMEs build resiliency and respond to the disastrous effects of climate change. For example, access to savings products and emergency loans can help MSME owners carry out cost-intensive efforts to rebuild their business after an extreme weather event.

Our survey data indicates that MSMEs need support from governments and financial services providers to build resilience and adapt to climate change. In some cases, such as insurance products, governments and financial service providers will need to work together to ensure MSMEs have access to appropriate and affordable financial services.

A significant share of MSME owners who experienced a climate shock faced damage to their shop or inventory (see graph below). To manage the impacts of climate disasters on their business operations, MSMEs need financing to make upgrades to their business location or inventory storage. Governments can provide grants or low-cost loans to MSMEs for making upgrades that would help avoid more drastic consequences of a climate emergency.

Climate Change Adds to Challenges for MSMEs Recovering from COVID: Three Takeaways from CFI Surveys

Hanh Nguyen is thrilled! Recently, an international organization introduced a new climate-smart seeder technology for rice production in his village. The seeder is less resource-intensive and will improve yields while allowing farmers to plant rice more quickly. While Hanh and the other men farmers in the village are celebrating their good fortune, his neighbor, Linh Bui — an agricultural laborer and single mother of four, is extremely worried. Cultural restrictions and childcare responsibilities restrict her from venturing out of the village seeking work, and she relies on the income she makes working in the rice fields. The new technology will reduce the need for wage laborers in rice transplanting, and Linh will no longer have an income. How will she now provide for her family?

As the story above illustrates, <a href="https://agrilinks.org/post/lessons-farming-households-agricultural-decision-making-and-shifting-social-norms-womens" target="_blank" rel="noopener noreferrer">development programs and processes often impact men and women differently.</a> Social and cultural norms negatively impact women smallholder farmers, but there are numerous ways that organizations can design programs to work for both low-income men and women. Integrating <a href="https://www.cgap.org/research/publication/social-norms-change-womens-financial-inclusion" target="_blank" rel="noopener noreferrer">norms-aware and norms-transformative approaches</a> in climate and agriculture programs can shift existing power dynamics and ensure equitable developmental outcomes for low-income men and women.

We highlight innovative approaches that organizations are taking to address norms barriers, reach smallholder women, and provide them with information and capital – two critical impediments that prevent them from adopting climate-smart productive agricultural investments. Funders, policymakers, and providers can consider these insights as they invest in and design policies and solutions that integrate women smallholders in climate-smart agriculture.

<img class="alignnone size-full wp-image-44432" src="https://content.centerforfinancialinclusion.org/wp-content/uploads/sites/2/2022/05/Screen-Shot-2022-05-04-at-2.38.29-PM.png" alt="" width="2520" height="1476" />
<h1>Despite the Feminization of Agriculture, Norms Interfere with Women’s Adoption of Climate-Smart Agriculture</h1>
Evidence from the <a href="https://www.gfdrr.org/sites/default/files/publication/gender-equality-disaster-recovery.PDF" target="_blank" rel="noopener noreferrer">World Bank</a>, <a href="https://www.fao.org/climate-smart-agriculture-sourcebook/enabling-frameworks/module-c6-gender/chapter-c6-1/en/" target="_blank" rel="noopener noreferrer">Intergovernmental Panel on Climate Change</a>, and others suggest that men and women experience the ramifications of climate change hazards differently due to their socially constructed roles and responsibilities. As Joanna Ledgerwood and Mayada El-Zoghbi pointed out in a <a href="https://www.centerforfinancialinclusion.org/the-pandemic-wake-up-call-gender-norms-matter-in-financial-inclusion/" rel="noopener noreferrer">recent blog post</a>, gendered roles — and the underlying social norms that influence them — are the <a href="https://www.centerforfinancialinclusion.org/normative-constraints-to-womens-financial-inclusion-what-we-know-and-what-we-need-to-know">invisible guardrails</a> dictating acceptable behavior, the division of labor, allocation of resources, and decisions about adopting new technologies, including climate-smart agricultural practices that can help low-income households build resilience against climate extremes.

Because of cultural and social norms, men and women smallholders have different roles and responsibilities, which in turn impact decisions related to agricultural investments and crop selection. For example, men typically prioritize cash crops for commercial gains, while women, who are likely to be <a href="https://link.springer.com/chapter/10.1007/978-3-319-25718-1_11" target="_blank" rel="noopener noreferrer">subsistence farmers</a>, tend to pay more attention to crop’s cooking time and potential for consumption, food security, and cattle feed. Furthermore, due to normative roles, women farmers tend to be the ones who consider potential water contamination risks from herbicides, as it is their responsibility to fetch freshwater (often needing to travel long distances to find safe water) and care for sick family members.
<blockquote class="pullquote--right">Women’s role in agriculture is significantly undervalued and women smallholders have limited access to land, assets, inputs, advisory services, and post-harvest technologies.</blockquote>
While these norms have been in place for years, increasingly, men <a href="https://openknowledge.worldbank.org/bitstream/handle/10986/9104/WDR2008_0020.pdf?sequence=1&amp;isAllowed=y" target="_blank" rel="noopener noreferrer">are migrating for extended periods to seek off-farm opportunities</a> and women are playing a larger role in both on-and off-farm activities. However, despite accounting for <a href="https://documents1.worldbank.org/curated/en/855471513670397514/pdf/Mobile-technologies-and-digitized-data-to-promote-access-to-finance-for-women-in-agriculture.pdf" target="_blank" rel="noopener noreferrer">approximately 43 percent of agricultural labor in the developing world</a>, women’s role in agriculture is significantly undervalued. Women smallholders have limited access to land, assets, inputs, advisory services, and post-harvest technologies. They are also less likely to be <a href="https://www.researchgate.net/publication/237415255_Investing_in_Women_as_Drivers_of_Agricultural_Growth" target="_blank" rel="noopener noreferrer">connected to commercial agribusiness supply chains</a>. Gendered differences in <a href="https://cgspace.cgiar.org/bitstream/handle/10568/65680/Gender%20and%20Institutions%20Working%20Paper%2079.pdf?sequence=1&amp;isAllowed=y" target="_blank" rel="noopener noreferrer">awareness of the effects of climate change and adoption of climate-smart agriculture practices</a> to mitigate such risks further leave women behind. According to <a href="https://news.un.org/en/story/2011/03/368252-women-could-feed-millions-more-people-if-given-access-means-production-un" target="_blank" rel="noopener noreferrer">FAO’s estimates</a>, if men and women had equal access to productive resources, total agricultural productivity would rise by 20 to 30 percent and reduce global hunger by at least 12 to 17 percent.

Norms change is a complex and dynamic process that requires unlearning and relearning at the household, community, and national levels. To begin changing norms, programs must be designed with a gender lens. Solutions that focus only on access, delivery, or technological innovations – without explicitly accounting for the socio-economic and institutional contexts and gender disparities – can fail to achieve desired outcomes. For example, providing women with land tenure – often considered one of the biggest barriers for women smallholders – is insufficient by itself. Even if women smallholders are given <a href="https://link.springer.com/article/10.1007/s10460-021-10277-z" target="_blank" rel="noopener noreferrer">property rights</a>, they will need access to information, finance, markets, and decision-making powers to be able to leverage these rights into economic benefits. Even when women have property rights, traditional and cultural practices often require them to forfeit their rights to male relatives. Given these risks, women smallholders often lack the incentive to invest in improved climate-smart farming practices or commercially lucrative crops.

Gender-neutral or gender-blind solutions, such as the rice seeder example, often have unintended negative ramifications on the livelihoods of women like Linh because they fail to consider women’s role as caregivers and the unique contexts in which they live. So how do we address these norms barriers and support women smallholder farmers?
<h1>Delivering Training and Information to Reach Women Farmers</h1>
To begin with, we must focus on ensuring that women have equal access to information so they can make agricultural investments, access markets, and improve their wellbeing. Access to information is one of the biggest constraints women smallholders face. Traditional extension and advisory services often follow established practices that reinforce existing gender biases related to knowledge sharing and distribution of labor. Women smallholders with low literacy levels are therefore excluded from technical training covering seed variants, fertilizer use, feedstock, or new machinery and mechanized systems. On the rare occasion when women participate, they often need more time to learn and adapt because they are beginning from a lower baseline capability. This added cost of learning and adaptation can be a major deterrent that is often overlooked by development programs.
<blockquote class="pullquote--left">Access to information is one of the biggest constraints women smallholders face.</blockquote>
Furthermore, women face mobility restrictions and gender norms often dictate that women can’t attend male-led trainings in public spaces. Equipped with this understanding of gendered differences in mobility, information, and capabilities, under MEDA’s INNOVATE program, <a href="https://www.meda.org/document/lessons-from-farming-households-agricultural-decision-making-and-shifting-social-norms-for-womens-economic-empowerment/" target="_blank" rel="noopener noreferrer">Krishi Utsho</a> – a social enterprise operated by CARE Bangladesh – offered home-based training to rural women who were unable to participate in the programs conducted in the Krishi Utsho shops.

Additionally, while many organizations are leveraging smartphones to offer training, extension services, and real-time weather and price information at scale, women risk being left behind. Women are <a href="https://www.centerforfinancialinclusion.org/workarounds-dont-work-gender-aware-financial-services-must-help-address-discriminatory-norms">8 percent</a> less likely than men to own a phone (the gap is even larger for smartphone ownership) and <a href="https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2020/05/GSMA-The-Mobile-Gender-Gap-Report-2020.pdf" target="_blank" rel="noopener noreferrer">20 percent less</a> likely to use mobile internet than men. Development organization programs such as Mercy Corps AgriFin (through its <a href="https://www.mercycorpsagrifin.org/2021/05/27/sprout-open-content-agriculture-platform-learning-launching-soon/" target="_blank" rel="noopener noreferrer">Sprout</a> platform) and <a href="https://m-shamba.net/" target="_blank" rel="noopener noreferrer">M-Shamba</a> are trying to address this barrier through one-stop content platforms on feature phones that produce audio content that mimics the format of radio shows popular among rural women.

Recognizing that trust is key for adoption, Amplio involved rural women from North Ghana in the design of its <a href="https://digitalprinciples.org/wp-content/uploads/PDD_CaseStudy-Amplio-v2-1.pdf" target="_blank" rel="noopener noreferrer">Talking Book</a> — a rugged, battery-powered device with pre-programmed infotainment content in local dialects that health and agricultural extension agents use to deliver information in hard-to-reach communities with limited electricity. Since the content is available offline, it is well-suited for women without a phone, allowing them to listen and learn together at their convenience and record their feedback. Amplio also collects usage statistics to understand user engagement and concerns and continually improve the content.
<h1>Embedding Norms Change Programming in the Delivery of Financial Services Can Improve Outcomes for Women</h1>
Group lending models promoted by the microfinance sector sought to address demand-side barriers women face, including mobility and collateral constraints. However, they failed to uproot the discriminatory gender norms at the source. As a result, low-income women became a vehicle for receiving and repaying loans with little or no control over their use. To get to the root causes of women’s exclusion, we must address the underlying power dynamics at the household and community level, and increase women’s control of resources.
<blockquote class="pullquote--right">Low-income women became a vehicle for receiving and repaying loans with little or no control over their use.</blockquote>
There are some promising approaches to embedding norms change programming to get to the root cause of women’s exclusion from the financial system. In Nepal, many men are migrating, leaving women in rural communities to fend for themselves. Under the prevailing social norms, women lack the knowledge, capabilities, or networks to partake in climate-smart agricultural investments, and their social networks are limited to include only other women with similar backgrounds. To address these barriers, <a href="https://www.meda.org/document/lessons-from-farming-households-agricultural-decision-making-and-shifting-social-norms-for-womens-economic-empowerment/?wpdmdl=4237&amp;refresh=6256d21127f2f1649857041" target="_blank" rel="noopener noreferrer">International Development Enterprises (iDE)</a> trained and engaged women community agents to help women-headed households access information and financial services that would enable them to invest in climate-smart technologies. These networks and agents were trusted intermediaries, allowing women and men in the community to support the initiative. The program offered bundled agricultural credit, insurance, and inputs to help women invest in climate-smart technologies.

In another case, <a href="https://www.meda.org/document/lessons-from-farming-households-agricultural-decision-making-and-shifting-social-norms-for-womens-economic-empowerment/" target="_blank" rel="noopener noreferrer">Bidhaa Sasa</a>, a last-mile finance and distribution company in Kenya, researched the household decision-making process, needs, and constraints of women smallholders. They learned that rural women in Kenya prioritized items that met their household needs and agricultural tools. Using these learnings, Bidhaa Sasa chose to leverage the group lending model to disseminate information and sell essential goods and agricultural innovations. Because top-performing women customers gave the product demonstrations, Bidhaa Sasa circumvented norms barriers and earned the trust of women smallholders.

These examples suggest that models that consider community and household dynamics and the needs and constraints of women smallholders during product design can increase relevancy and improve livelihood outcomes. However, more rigorous evaluations are needed to generate evidence on the long-term outcomes of these innovations.
<h1>Where We Go From Here</h1>
Unless we address the norms that limit women’s ability to benefit from the same tools and climate-smart agriculture practices that are available to men, women farmers will fall further behind. Norms-aware and norms-transformative approaches must be incorporated into climate-smart agriculture programs to ensure equitable developmental outcomes for low-income men and women. Stakeholder and gender analyses and customer research can shed light on local contexts and power structures, help us evaluate potential scenarios and tradeoffs, and support corrective measures to ensure that women and other marginalized segments are not harmed.
<blockquote>Unless we address the norms that limit women’s ability to benefit from the same tools and climate-smart agriculture practices that are available to men, women farmers will fall further behind.</blockquote>
Program designers, providers, and policymakers should critically examine who will be the direct user of the technology, who makes labor and resource allocation decisions, and who benefits from using the technology during the project conceptualization stage. And funders and researchers must support the testing of gender-transformative approaches in inclusive finance and incentivize providers to consider women and their contexts in the design and delivery of financial services. Only then will the inclusive finance sector live up to its promise of equitable outcomes for all.

For more background on existing literature, see CFI's report <a href="https://www.centerforfinancialinclusion.org/normative-constraints-to-womens-financial-inclusion-what-we-know-and-what-we-need-to-know">Normative Constraints to Women’s Financial Inclusion: What We Know and What We Need to Know</a> (2021).

Gender Norms On and Off the Farm: Engaging Smallholder Women in Finance and Climate-Smart Agriculture

With more than 30 years of financial experience, CFI Advisory Council Member, <a href="https://www.centerforfinancialinclusion.org/bio/joanna-ledgerwood">Joanna Ledgerwood</a>, has witnessed dramatic changes in the inclusive finance space. Originally a banker interested in women’s studies, she entered the field hoping to contribute to improving women’s lives and alleviating poverty. After working at various organizations, including the World Bank and the Aga Khan Foundation, and eventually establishing and managing <a href="https://www.fsdzambia.org/" target="_blank" rel="noopener noreferrer">Financial Sector Deepening (FSD) Zambia</a>, Joanna now focuses primarily on women’s financial inclusion and economic empowerment.

Joanna is a member of CGAP’s gender team, contributing most recently to understanding how gender norms affect women’s financial inclusion and building gender-transformative solutions. She also advises several organizations within the FSD Network in Sub-Saharan Africa. Joanna joined CFI’s Advisory Council in July 2020.

As she reflects on lessons learned and progress made, Joanna emphasizes the need to clearly define what success means for inclusive finance, and the importance of moving beyond access and use to actively assess and measure impact.
<h3>How did you get involved in inclusive finance and what are you working on now?</h3>
JL: After completing my MBA in the late 1980s, I found myself working as a private banker while taking women’s studies classes in the evenings. Quite a contrast! I had always been very interested in women’s empowerment and found it increasingly difficult to separate what I was doing in my career with what I really cared about. I decided to give up banking and joined <a href="https://www.centerforfinancialinclusion.org/institutional_partnerships/calmeadow">Calmeadow</a>, a Canadian NGO and forerunner in microcredit.

About 15 years ago, I met Alan Gibson and learned about Making Markets Work for the Poor (M4P). This approach, which I ended up writing a <a href="https://www.amazon.com/Making-Market-Systems-Work-Poor/dp/1788531418" target="_blank" rel="noopener noreferrer">book</a> about, changed my entire perspective on development. Now, working almost exclusively in women’s financial inclusion and empowerment, I use the M4P approach – now referred to as market systems development –in everything I do; I believe it is the only way to make progress in development.
<h3>How did you find yourself working on women’s financial inclusion?</h3>
JL: The genesis of my getting into microcredit was joining Calmeadow. However, for most of my development career, I didn’t focus on gender because I assumed that if the poor were benefiting, then women must be benefiting. It wasn’t until FSD Zambia that I became more involved in gender after securing funding from Sida for a women’s inclusion program. A couple of years after I left FSD Zambia, I spent about a year in an advisory role at the Bill and Melinda Gates Foundation, focused on their gender and policy work. There, I gained an understanding of what various funders and others were working on with regard to women. A few months later, I joined the CGAP gender team, where I focus on gender and market systems development.
<h3>How has inclusive finance changed since you first became interested in the subject?</h3>
JL: For one, the name and focus have changed. When I first joined Calmeadow, it was all about microcredit – the idea being if you provide a small amount of credit to (primarily) poor women, they could start a business that would reduce their poverty. After a decade or so of microcredit, we realized that savings were also important and shifted to microfinance. However, we were still very much centered around supply, and to some extent, I think we still are.

At the time this shift was taking place, I was working with the World Bank and wrote “<a href="https://www.amazon.com/New-Microfinance-Handbook-Financial-Perspective/dp/0821389270/ref=asc_df_0821389270/?tag=hyprod-20&amp;linkCode=df0&amp;hvadid=266118767273&amp;hvpos=&amp;hvnetw=g&amp;hvrand=8536880947652654858&amp;hvpone=&amp;hvptwo=&amp;hvqmt=&amp;hvdev=c&amp;hvdvcmdl=&amp;hvlocint=&amp;hvlocphy=9061285&amp;hvtargid=pla-613592886641&amp;psc=1" target="_blank" rel="noopener noreferrer">The Microfinance Handbook</a>” in 1998. The field has continued to evolve and eventually the term “financial inclusion” made more sense as (micro)insurance and payments were recognized as important financial services for the poor. Now, you often hear the term ‘inclusive finance’, indicating a shift in emphasis and a deeper focus on inclusivity.

I’ve also seen a big movement towards adopting a market systems development approach: recognizing how the various functions and actors necessary in financial market systems must work together to include those underserved and excluded and, ultimately, benefit the real economy.

The other big change has been the acknowledgment of the informal financial sector and its importance in providing financial services to the poor, particularly women and particularly in rural areas. Donor investments made to develop the savings groups sector have been transformational. I think we can learn from the informal sector how to make the formal financial sector work better for women.
<h3>What is your view on the current state of inclusive finance?</h3>
<blockquote class="pullquote--right">If we don’t proactively consider why these groups are underserved or excluded, and then do something about it, inclusive finance won’t be “inclusive”.</blockquote>
JL: What immediately comes to mind is “we’re getting there.” Although much progress has been made, there has recently been an acknowledgment that some marginalized groups are not as included as we assumed. If we don’t proactively consider why these groups are underserved or excluded, and then do something about it, inclusive finance won’t be “inclusive”.

Gender equity, for example, is at the core of development and therefore fundamental to our work in finance. Many people are now talking about a shift toward the “real economy” and how financial services can contribute to inclusive economic growth, access to basic services, and resilience. However, if we’re not intentional and don’t fully consider women and the need for gender equality, real economic impact will be less and will be inequitable.
<h3>What unique expertise do you bring to CFI’s Advisory Council?</h3>
JL: Probably my work in women’s financial inclusion, which is useful since it’s one of CFI’s key focus areas. I love the work CFI is doing on women’s financial inclusion and it’s great to be able to be more actively involved. Also, market systems development, because I believe it’s the only approach that will result in sustainable change that benefits the poor.
<h3>If you weren’t in your current professional role, what would you be doing right now? </h3>
JL: I love my work and the people I have met through it. So, fortunately, I’m doing exactly what I want to be doing. However, if I didn’t work in inclusive finance, I would do something to combat human trafficking. I actually retired about four years ago, but I somehow morphed back into working and got really into women’s financial inclusion and empowerment. I am probably the most inspired and passionate about my work now as I ever have been.
<h3>What lessons did you learn as the founding director of FSD Zambia?</h3>
JL: I learned that to effect market system change, you need to be close to market actors, and I don’t just mean in the private sector. Market actors also include the public sector and civil society. We must consider all the actors (and functions) that either contribute to or constrain the financial market system from working well for everyone – so policymakers, ministries, payment platforms, collateral registries, data management providers, and many others.

Facilitating change requires knowing what’s going on. You need to conduct the research, talk to people, have your ear to the ground. So, when the opportunity for change comes, you’re informed and can influence change in market actor behavior.
<h3>What are the most crucial issues in inclusive finance that we should prioritize over the next five years and why?</h3>
<blockquote class="pullquote--left">The end game is not just about closing the gender gap; it’s about identifying and measuring the benefits of financial services for women.</blockquote>
JL: We need to reach marginalized groups. I think it’s key that we figure out how to define success and how best to measure it. And in measuring it, we pay attention to what is and is not working and adapt what we are doing. The end game is not just about closing the gender gap; it’s about identifying and measuring the benefits of financial services for women. It’s not just about access and use. We need to understand what poor people use financial services for. Are their lives improving as a result? Is poverty being alleviated? That requires not only defining impact but also measuring it and developing an evidence base of what works. Inclusive finance must be inclusive.
<h3>In these recent times of uncertainty, what keeps you up at night and what keeps you inspired?</h3>
JL: A key development objective is poverty alleviation, and gender equality is right at the heart of it. Women simply do not have the same opportunities as men – they have less access to education, health services, finance, etc. ­­– and this inhibits their equal chances to succeed. Women are expected to provide the lion’s share of (unpaid) childcare and domestic work which in turn limits their mobility, their time, and access to market resources and information. They have limited ownership and control of assets, which limits their economic participation as producers. All of this results in income inequality. Therefore, gender inequality is not just a symptom but a cause of poverty. The more research I do, the more I realize that if we’re not making progress on gender equality, then we’re not making progress on the bigger development objectives.
<blockquote>If we’re not making progress on gender equality, then we’re not making progress on the bigger development objectives.</blockquote>
What keeps me inspired are the people. My colleagues, many of whom I consider friends, are really smart and really dedicated. I also think that COVID, despite all the harm it has done, presents an opportunity to ‘build back’ differently. In these uncertain times, I can’t emphasize enough how important it is to understand women’s experiences, needs, preferences, capabilities, and constraints and how they differ from men’s, and design interventions that will result in products, services, policies, and behavior change that work for women.

Inclusive Finance Must Be Inclusive: Q & A with Joanna Ledgerwood, CFI Advisory Council Member