> Posted by Lisa Kienzle and Gigi Gatti, Grameen Foundation
Women make great digital financial service (DFS) agents: they are often savvy at managing liquidity, effective at building trust, and perhaps most importantly, they are more effective at onboarding other women into DFS than men. This makes the recruitment and training of women agents an important strategy for closing the gender gaps in digital financial services and technology, and for ultimately ensuring universal financial inclusion.
Men in developing markets still outpace women in account ownership by 9 percent. The technology gap is even larger – women are 14 percent less likely to own a mobile phone than men. Given the growing emphasis on digital solutions to drive financial inclusion, this technology gap could further widen the financial services gender divide if not explicitly taken into account in the design of digital solutions. Women agents are a crucial element of that design.
However, research from the Helix Institute of Digital Finance shows that women are consistently underrepresented in agency networks due to a variety of cultural and socio-economic constraints. These start from their difficulty in obtaining formal financial services. Many women lack a bank account, the documentation to get an account, and any sort of information on their financial behaviors, let alone a credit history needed to access a formal loan. Even greater challenges can confront aspiring financial service agents, who may need to acquire and learn new technologies to act as agents.
In the Philippines, Grameen Foundation, a global nonprofit that uses technology to empower the poor, is harnessing the power of the local investors to fund women agents. Last December, Grameen Foundation launched the Community Agent Network (CAN) Program, which engages nanays – women running sari-sari shops (neighborhood variety shops) – to take on a new role as financial service providers. Grameen Foundation partnered with Payswitch Fintech Ventures to design Panalo, a payments platform.
Across the board, when traditional financing fails, innovative financing is needed – such as leveraging the power of the crowd. Crowdfunding models that use online platforms to enable peer-to-peer lending can offer alternative ways for women entrepreneurs to access funding – either from local or international investors – to overcome their financing challenges.
To help nanays invest in the required technology, Grameen Foundation is launching a crowdfunding campaign in partnership with FundKo, a local Filipino peer-to-peer lending platform, to provide the women with access to initial capital and the necessary digital platforms, enabling them to become financial service agents for their mostly poor and unbanked clientele. By the end of 2017, the CAN network aims to expand to over 600 sari-sari stores, and reach 66,000 low-income customers across several islands.
We’re seeing crowdfunding being put to work to enable women agents in other parts of the world as well. In sub-Saharan Africa, Zoona Zambia, a digital payments technology provider, found that women as agents make good business sense – they were better at running their agency business than men were. When Zoona expanded to Malawi, they decided to focus on recruiting women agents. To address the upfront capital hurdle for its agents, Zoona partners with Kiva, an international crowd-funding organization that matches lenders with entrepreneurs to offer low-interest loans. They’ve found that women raise funds twice as fast as men through the platform. As a result, today 70 percent of Zoona’s agents in Malawi are women.
These peer-to-peer models remove the roadblock of access to start-up capital, but another challenge remains. Central to first-time agent banking models is access to training and information. In the Philippines, Grameen Foundation works with Payswitch to train sari-sari store owners on the digital payments platform. The training covers hard skills, including the use of the technology and the digital financial services products on offer, and soft skills, such as customer service and support. Similarly, Zoona educates women on business financing and agency management. The coupling of appropriate access to capital and information ensures that these women have the tools they need to make the most of their investment in their business.
Although access to finance and training are two major barriers facing women agents, agent network managers looking to bring women into their service potentially need to address a host of socio-economic disparities and cultural challenges and their many variations across geographies. Innovative designs could address the particular needs of these aspiring women entrepreneurs. However, finding unique ways of financing and training women agents when traditional banking fails can remove key constraints to a more inclusive agency system, and in turn, work to decrease the gender divide in financial inclusion.
Lisa Kienzle is global director of financial services at Grameen Foundation. Gigi Gatti is Grameen Foundation’s regional director (financial services) for Asia and country director for the Philippines.
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