how-digital-financial-services-are-empowering-women-hendriks
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- Authors: SARAH HENDRIKS
- Published: March 1, 2019
Poverty, gender, and the opportunity gap
- Poverty is presented as a collection of deprivations: a lack of financial assets, a lack of access to property, and a lack of voice in one’s community.
- Key statistics on gender inequality:
- Women earn 63 percent less than men.
- Women spend three times as many hours on unpaid labor, such as housework.
- The McKinsey Global Institute estimates that fully incorporating women into the economy would add $12 trillion to global GDP by 2025.
- In the developing world, 4 in 10 women do not have a financial account of any kind.
- Nearly a billion women lacking access to formal financial services.
How digital financial services (DFS) expand opportunity
- Core advantages of DFS:
- Digital financial services include mobile money, debit and credit cards, and e-commerce platforms.
- DFS can help a business grow far more efficiently than brick-and-mortar branches.
- DFS can result in fees that are as much as 90 percent lower than those associated with cash-based services and transactions.
- Empirical examples:
- Liberia teachers:
- Teachers travel up to 10 hours each way to collect their earnings in cash.
- This trip often requires missing work and spending as much as 15 percent of their wage along the way.
- When salaries were digitalized, teachers saved an average of 13.5 hours every two weeks and reduced the cost of collecting their income by 90 percent.
- Bangladesh garment workers:
- Women comprise most of the garment factory workforce and often hand over their cash wages to a husband or parent due to local social norms.
- Research from the Better Than Cash Alliance showed that in garment factories where wages are digital, workers are 69 percent less likely to report that they cannot save money because a family member controls their salary.
Data gaps and investments in gender data
- The United Nations Sustainable Development Goals highlighted a gender data gap:
- Of the 14 indicators for gender equality, only 3 have sufficient data to track progress.
- The Gates Foundation responded with a data investment:
- In 2016, the foundation announced an $80 million investment to help fill critical gender data gaps.
- IMF contribution to gender-disaggregated financial data:
- The IMF’s annual Financial Access Survey looks at financial inclusion from the supply side.
- Last year’s survey was the first to disaggregate data by sex, enabling observation of which countries are closing gender gaps in transactions such as borrowing and depositing.
Program design and policy priorities to scale women’s inclusion
- Three-front approach when collaborating with governments on social payment schemes:
- Digitalize payments on the supply side.
- Direct payments to women specifically.
- Design programs so that they meet women’s unique needs.
- Rationale:
- About 80 million unbanked women in developing economies receive government transfers in cash, presenting a large-scale opportunity to include and empower women financially.
- Inclusion requires considering the nuances of how people access and use cash transfers.
Identity systems and technological enablers
- Identity barriers:
- In low-income countries, more than 45 percent of women do not have a formal ID, as compared with 30 percent of men.
- Digital identity solutions:
- Countries such as India and Pakistan have rolled out national digital identity programs using biometric data to eliminate literacy as a barrier.
- Digital IDs have helped millions open accounts in India.
- In Pakistan, after linking its identity system to a social payment scheme, the number of women who signed up for IDs nearly doubled.
- Other technology-driven benefits:
- Automated account application processes can help women avoid gatekeepers or agents who might turn them away because of social norms.
- Kristalina Georgieva’s analogy: digital financial applications could “do for women in business what the curtain has done for women in music.”
Concluding observations
- Financial inclusion of women is framed as a powerful lever for gender equality and broader social and economic gains.
- For the poorest women, access to digital financial services can change daily realities—saving time, reducing costs, increasing control over earned income, and expanding agency.
- The Gates Foundation’s perspective: when women achieve the same status, power, and opportunities as men everywhere, it will mean dramatic social change that propels all of us forward.
how-digital-financial-services-are-empowering-women-hendriks, SARAH HENDRIKS, F&D Magazine, March 2019
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