Women and Financial Inclusion: What More Can We Do to Address the Systemic Barriers Women Face?

This International Women’s Day, CFI’s Danielle Piskadlo reflects on structural barriers to financial inclusion gender equality, and how digital needs to be more intentional.

It was the Dixie Chicks who led me to a career in financial inclusion.

Back in 2006, I moved home because I wanted to “do more” with my life and figure out what that meant. That involved a lot of “I am woman, hear me roar” inspirational music.

This brings me to the Dixie Chicks: one of their album covers mentioned the work of Pro Mujer. I had never heard of microfinance but it was getting a lot of attention because 2005 was the International Year of Microcredit. Microfinance checked two important boxes for me: the focus on women and, specifically, a sustainable approach to providing women with a “hand up, not a hand out.”

Confronting Harsh Realities of Structural, Systemic and Societal Barriers

On this International Women’s Day, 13 years later, I remain convinced that access to quality financial products and services helps women around the world. I’m sure that greater financial independence helps empower women, and gives them greater choice, confidence and independence.

However, I also know there are many harsh realities and inequalities women face, and that access to financial products and services isn’t always enough to improve the lives of women. We need to be able to recognize that a loan or savings account alone does not allow all woman to be able to start or grow a business.

This hands-off, “bootstraps” approach, making women responsible for working their own way out of poverty, comes up short. It doesn’t actively address so many of the structural, systemic and societal barriers, biases and inequalities that women continue to face, especially in the poorest countries, and that prevent women from being able to start or grow a business.

The “bootstraps” approach, making women responsible for working their own way out of poverty, comes up short.

Many women around the world continue to show incredible strength and resilience while facing the horrific realities of lacking rights, being marginalized or abused, and living in extreme poverty. In some places, women can’t own property, they’re not equally educated, and too often they’re forced into marriages and motherhood too soon. At less extreme levels, many girls are still very young when they start to internalize the societal inequalities they see in childcare and housework. The resulting “less than” perception causes some to lose their confidence and voice.

These gaps and barriers must be taken into account and intentionally combatted when providing financial products and services, as the account access and usage data continues to show us that women lag men. Findex data show that men remain more likely than women to have an account. The gap between men and women in developing economies has remain unchanged since 2011, at 9 percentage points, even though there’s clear evidence that women continue to prove themselves more reliable re-payers and lower credit risks.

Digital Is No Panacea

Of particular concern to me is how the movement toward digital financial services could be widening this gender gap. The research is not showing entirely positive trends for women and digital financial service access:

  • Women in low- and middle-income countries are still 33 percent less likely than men to use mobile money and 10 percent less likely to own a mobile phone.
  • Women have consistently lower levels of awareness, adoption, and use than men across countries, according to a 2017 report. “Even controlling for other sociodemographic and economic factors, we find that being female is associated with an overall lower likelihood of awareness of mobile money,” the analysis notes. “Across all countries, women who are aware of mobile money are also less likely to adopt mobile money than are aware men, with the negative effect of gender increasing in each wave. Gender does not have a significant association with the use of mobile money among those that have adopted it, however, which suggests that barriers to first-time use may be the most important for women’s access to mobile money.”
  • A 2017 CFI report, Uniting Tech and Touch, has shown that, in Kenya, more than three quarters of women prefer to ask a question in person. “Eight out of 10 of female respondents preferred to ask a question in person. More than half of our male respondents preferred to ask questions via the phone or had no preference and were comfortable either way. Interestingly, a majority of our female respondents preferred to conduct regular transactions with the support of a person as well. For rural women, this mostly corresponded with low literacy.”

Call to Action for Financial Inclusion Professionals

Given that the theme of this year’s International Womens Day is Balance for Better (#BalanceForBetter), overcoming these barriers could be more effective if we take a look at ourselves as an industry. Making lasting changes requires financial service providers (FSPs) and fintechs to look internally to ensure a balance of women’s voices at all levels – from boards and leadership to product designers. We can’t allow male-dominated boards to make strategic decisions about women clients, and then have male-dominated tech teams design digital financial products for women based on a survey or focus group.

We can’t allow male-dominated boards to make strategic decisions about women clients.

There’s research showing women make better leaders than men, including evidence that boards with more women perform better financially, show better risk management, are more professional, and better understand the needs of the female clients they are serving. Yet none of this evidence is translating into women-started or women-led businesses getting more funding, or more female leadership or board participation at FSPs.

Here are good places for financial service providers to start:

  1. Make a strategic decision to focus on serving women, even if they require smaller loans or have smaller savings balances. Only one fifth of FSPs currently focus on women.
  2. Provide business and financial literacy trainings and support bundled with finances.
  3. Think strategically about the potential add-on services and partnerships with NGOs that might be possible to provide – healthcare, education, etc.
  4. Reconsider what’s a productive business loan: if household appliances and scooters allow women more time and independence for their business, then they should also be financed.
  5. Provide adequate channels for women to ask questions to a human.
  6. Focus extra effort on helping women overcome the initial adoption hurdle when it comes to digital financial products.
  7. Invest in more women-led or women-run FSPs and fintechs.
  8. Pay equal wages for the same job.
  9. Ensure gender equity on boards.
  10. Set gender-specific goals and targets and tracking progress toward them over time.
  11. Provide digital public assistance or government payments to women specifically.
  12. End industry “manels” at conferences.

The industry has evolved a lot since 2006, but we still have yet to implement these practices. I had many advantages and lots of support to help me advance in my career, but women at the base of the pyramid do not. They need advocates. Let’s take a closer look internally at what each one of us can personally do to make a change to combat the unequal playing field women face globally. It will take a concerted and collective effort to tackle the major challenges of achieving full gender equality in financial inclusion.

Join the Conversation

Stay informed. Subscribe to our newsletter.

<noscript><iframe src="https://www.googletagmanager.com/ns.html?id=GTM-W5XP2HF" height="0" width="0" style="display:none;visibility:hidden"></iframe></noscript>