If financial literacy education is the key to women entering the formal financial system, then it follows that lack of knowledge is the barrier keeping women in the developing world from accessing these services. But is lack of knowledge the driving variable, or are other factors and variables more significant in predicting financial behaviour?
Women’s World Banking estimates there are 1.1 billion women in the world outside of the formal financial system. The great majority of these women are in the developing world, but some remain in the developed world as part of vulnerable and marginalised populations.
Two issues remain part of women’s life experiences in the developing world and in marginalised groups, and these life experiences shape their trust and willingness to engage with a new system. Identity, for many women, remains an issue outside of their control. Based in social structures and dependent to a great deal on the availability of childhood education, girls are taught who they are by their mothers, their families, and the larger community. In communities that are isolated or rural, with little infrastructure development such as roads and communication technology, this social identity is strongly entrenched, with no competing ideas. In order for women to begin accessing financial services, they have to believe they are a person with an identity and the right to have money and opportunity.
Digital technology and mobile solutions are a bridge for the isolated and rural poor who are still challenged by the issues of identity and personal ownership. Many countries are implementing population based identification schemes using biometric data. But the social structure of communities and families is still the way individuals form identity.
The second issue is also gender based: women need the support of other women. Education alone, a name and identity card, a bank account and classes on how to engage in the financial world may not be enough. Women all over the world have greater success in any engagement, behaviour change, and new experience when they have the support of other women. Women for the World is encouraging the development of savings and development groups, community based self-help groups that merge education with support and encouragement from peers. Just as mothers teach daughters who they are, mothers can encourage daughters toward savings behaviours with the support of a community of women. Family-based savings programs in other cultures may provide this same support and encouragement.
In planning services that address disparity and lack of access to formal financial services, the inclination to provide financial literacy education is strong. But for women in the developing world, combining education with efforts that encourage identity and provide social support from other women are going to have a better chance of encouraging long-lasting engagement in formal financial systems.
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