Women in Finance: A Case for Closing Gaps
Staff Discussion Notes, September 17, 2018
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- Women in Finance: A Case for Closing Gaps
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Bibliographic details
- Authors: Ratna Sahay, Martin Cihak
- Published: September 17, 2018
- Series: Staff Discussion Notes
- DOI: https://doi.org/10.5089/9781484375907.006
Overview
- Women are underrepresented at all levels of the global financial system, from depositors and borrowers to bank board members and regulators.
- The IMF study finds that greater inclusion of women as users, providers, and regulators of financial services would have benefits beyond addressing gender inequality, including greater banking stability and enhanced economic growth.
- More inclusive financial systems can magnify the effectiveness of fiscal and monetary policies by broadening financial markets and the tax base.
Key findings
- Greater access for women to and use of accounts for financial transactions, savings, and insurance can yield economic and societal benefits.
- Women merchants who opened a basic bank account tend to invest more in their businesses.
- Female-headed households often spend more on education after opening a savings account.
- Representation gaps in leadership:
- Women accounted for less than 2 percent of financial institutions’ chief executive officers.
- Women accounted for less than 20 percent of executive board members.
- Governance and stability links:
- Controlling for relevant bank- and country-specific factors, the presence of women and a higher share of women on bank boards appears associated with greater financial resilience.
- A higher share of women on boards of banking-supervision agencies is associated with greater bank stability.
Evidence and mechanisms
- Inclusion as users:
- Increased account access and usage by women supports investment by women merchants and higher education expenditures by female-headed households, indicating microeconomic channels linking financial inclusion to broader economic and social outcomes.
- Inclusion as providers and regulators:
- Female representation on bank boards and in banking-supervision agencies correlates with measures of bank stability and resilience, suggesting governance channels through which gender balance can affect systemic outcomes.
- Policy leverage:
- More inclusive participation can improve transmission and effectiveness of monetary and fiscal policy by expanding financial markets and the tax base.
Policy implications and recommendations
- Narrowing gender gaps in users, providers, and regulators of financial services can:
- Foster greater stability in the banking system.
- Enhance economic growth.
- Contribute to more effective monetary and fiscal policy.
- Strengthening women’s access to basic financial accounts (transaction, savings, insurance) can have both economic and societal benefits at household and firm levels.
- Closing leadership gaps in banks and banking-supervision agencies is supported by evidence linking higher female representation with greater bank stability and resilience.
Source: Women in Finance: A Case for Closing Gaps — IMF Staff Discussion Note (September 17, 2018), https://www.imf.org/en/publications/staff-discussion-notes/issues/2018/09/17/women-in-finance-a-case-for-closing-gaps-45136