Though use of mobile banking services is driving increased financial inclusion for many in developing countries, there is still much to be done to narrow the gender gap that currently exists. The 2014 Global Findex, which is a report that measures how people save, borrow, and manage risk in 148 countries of the world, reveals that in developing countries, women are 20 percent less likely than their male counterparts to have formal bank accounts. The study also reveals that women are 17 percent less likely than men to have borrowed formally in the past year.
This disparity between men and women is significant because economic growth in some of the poorest countries is largely dependent upon women. According to World Bank estimates, small and medium-sized enterprises with female ownership represent from 30 to 37 percent of all small business enterprises in emerging markets.
Studies also show that empowerment of women and economic development go hand in hand. Evidence indicates that resources handled by women are generally spent on the improved living conditions and educational opportunities of children. Therefore, efforts to put more financial decision-making ability in the hands of women are thought to be good for entire economies of developing lands.
Those spearheading mobile banking initiatives and microfinance opportunities, however, are well aware of the challenges posed by gender inequality in poorer countries. Too many women lack basic freedoms, including the right to make their own economic decisions. It has been observed that even in lands where women are nominal account holders, often the real decisions regarding finances are handled by a male relative.
Educational disparities between the sexes also contribute negatively to the equation. In many lands, women are forbidden or highly discouraged from having any type of formal education, thus making it more difficult for them to understand the financial intricacies of formal lending and saving strategies. Even in the field of mobile banking and mobile payments, women lag significantly behind their male counterparts in developing lands. Some of this may be attributed to something as simple as lack of access to mobile devices. A disproportionately large number of mobile devices in developing countries belong to males, leaving women with little or no access to any type of mobile technology.
Discriminatory laws and customs often hamstring the efforts of women in financial matters. Therefore, any long-term gender equality will necessarily be a result of both changing cultural biases and empowering women through social intervention and change. Goals that will lead to more gender equality include:
providing basic education to girls of school age
increasing literacy rates among women of all ages
strengthening labor laws as they relate to gender equality
improving women’s access to health programs and political participation
strengthening family support initiatives
increasing early childhood development interventions
improving financial opportunities for women through the distribution of mobile devices and education about their uses
- empowering women with opportunities to own land, start businesses, and access available financial resources to do both.
This list is by no means all that is required to help lessen the gender gap that exists and support true global financial inclusion. However, it is a good place to start and a worthy list of goals to pursue.
What can microfinance institutions that work in developing lands do in a practical way to reach these objectives and narrow the gender gap?
1) Teach by example.
Ensuring that women occupy key positions in your organization is one way to narrow the gap. This is a practical step because in many cultures, women are not allowed to speak with men not of their own families, even to conduct business. Having a female loan officer on staff encourages women to speak more openly and seek the counsel of someone within your organization. Providing equal employment opportunities in-house serves as a model in the community for acceptance of women in decision-making roles.
2) Train your staff to analyse gender inclusion metrics.
Regular training in gender specific issues and analysis of how your institution is meeting the challenges of gender inclusion will help your staff keep an eye on promoting gender equality at every opportunity.
3) Tailor your products to address women’s issues.
Things such as loan amounts, repayment schedules, and product pairings can be tailored to specifically address the concerns of female clients. For instance, providing microinsurance to reduce financial risk may influence a woman’s inclination to use your services.
4) Set conditions on loan approvals that work for women’s rights.
Consider making attendance at an adult literacy class or business training class sponsored by your organization a prerequisite of loan approval. This will give women incentive to obtain education and will also give women a way to open a dialogue with their male family members regarding why such education is important. Additionally, it may be possible, if the law of the land permits, to make registration of land in the name of the borrower a prerequisite of loan approval. If registration of property is legally in the name of a woman, her chances of achieving financial independence greatly improve.
5) Support women’s social groups.
Find agencies within the country in which your MFI works which support and advocate for women’s rights. Align your company with these groups, and lend your voice and support to networks which strive to enable financial inclusion for women.
6) Consider providing mobile devices as part of your loan package.
If you are working in a developing land where mobile access is frequently difficult for women to obtain, find ways to provide access to mobile devices. Partner with philanthropic groups that might be interested in donating devices for this purpose and distribute donations to women who can best use them to achieve their goals.
As global initiatives for financial inclusion continue, it is clear that women have a large role to play in the economic development of emerging markets. Tailoring your financial services to target the unique needs of women will bolster their position in society and help you reach the goals of your MFI in the process.