So much is in her hands. Ensuring daily meals for the family. Paying school fees. Purchasing inventory for her business. Setting aside money for seeds for the next planting. Yet when it comes to the essential tools to manage these expenses, invest in timely opportunities to buy in bulk, save for a piece of needed equipment, or make a payment without spending a half day to do so, she lacks the tools she needs.
Digital finance has the potential to put in the hands of women the means to better carry out their roles. But it will not happen automatically. The gap between men and women in access to financial services is great. In developing economies, women are 20 percent less likely than men to have an account at a formal financial institution and 17 percent less likely to have borrowed formally in the past year.
To reduce the gender gap—and to expand women’s overall level of access—policymakers and financial services providers need to understand what women value when it comes to financial products and services. In a variety of settings, the answers that have come back are strikingly similar. Convenient. Reliable. Secure. Private. When these attributes are taken into consideration in design, the benefits to women—in terms of greater economic participation and empowerment as well as greater account ownership and asset accumulation—are significant.
The power of financial inclusion
Digital financial services have the potential to address women’s preferences in new and different ways than traditionally provided financial services. In Malawi, for example, with UNCDF support, Women’s World Banking and NBS Bank have designed the Papfupi Savings Account to give “mtima myaa” or peace of mind to its clients. By using mobile phones in rural areas as a transaction point to make deposits and withdrawals, and with the help of the mobile sales team, clients can open an account in ten minutes from anywhere. The product conveys information simply and visually so that the customer does not need to be literate.
In Niger, evidence from the social cash transfer program demonstrates that the greater privacy and control of mobile transfers compared to manual cash transfers shifts intra-household decision-making in favour of women. In Kenya, the arrival of mobile money transfers increased women’s economic empowerment in rural areas, by making it easier to request remittances from their husbands who migrated to urban areas for work. In India, where trust is a particularly important issue for women, agents played an essential role in training and supporting women in their use of the technology.
While digital financial services can be offered in many forms including ATMs, point of sale terminals, and cards (pre-loaded or debit), one that is promising particularly for women is mobile phones. Yet gaps in subscriptions—there are some 300 million fewer women subscribers than men—and ownership—women in developing countries are 21 percent less likely to own a mobile phone than men—must be addressed if digital financial services are going to deliver on their promise to women.
This may take longer than hoped for; however, through the Benazir Income Support Programme (BISP) G2P program in Pakistan, for example, it was thought that mobile phones would be a low-cost and convenient way for women in remote areas to interact with a bank. The reality was that many of the women did not have a phone and did not know how to use one. This experience and others like it point to the importance of ensuring that the product is simple and easy to use and that adequate customer support or training is provided, particularly for illiterate women who have had little experience with using technology or financial services or both.
Governments also have an essential role to play by creating an enabling regulatory environment, establishing an appropriate financial consumer protection framework, and catalyzing a digital ecosystem.
The links between financial inclusion—particularly for women—and broader development goals is increasingly being recognized on the global stage. Indeed, the draft Sustainable Development Goals features financial inclusion as a key enabler to multiple goals. The links between financial inclusion, digitization, and the global growth agenda have been underscored by the G20 and are priorities for the Turkish G20 Presidency. Digital financial services offer the promise of closing the access and usage gap between men and women. Deliberate efforts on the part of governments and providers can help put the tools in the hands of the women ready to use them.