While significant advancements have been made to facilitate more access and use of financial services for those who aren’t served, obstacles to financial inclusion persist. The global dialogue surrounding the financial inclusion gender gap (referring to the disproportionate exclusion of women from access to and usage of formal financial services) has intensified as key stakeholders–including financial service providers, regulatory bodies, policymakers, civil society entities, and consumers–explore how best to engage prospective women customers in ways that meet the needs of both consumers and providers situated within different market contexts.
As part of the consultative of the process to prepare the 2nd year Brookings Financial and Digital Inclusion Project (FDIP) report and scorecard to be released in the latter part of summer 2016. The FDIP team convened the roundtable in March of 2016 to promote dialogue and information sharing on gender-based disparities in access and utilization of formal financial services. A first FDIP Scorecard as well as the report which was released in August 2015, is available here.
The roundtable was participants with an opportunity to debate the policy, legal, and social factors that drive the gender gap, to highlight the examples of encouraging approaches in the countries which have taken progress in reducing gender gaps and outline actions for government officials, financial service providers as well as consumers in the context of encouraging greater equity within the financial sector. In advance of diving into the main topics and issues discussed at the table, below is some background information on the nature and consequences of the impact of gender inequality.
WHAT IS THE FINANCIAL INCLUSION GENDER GAP, AND WHY DOES IT MATTER?
Between 2011 and 2014, the proportion of women in emerging economies that had official financial accounts were up thirteen percentage points according to the world bank’s Global Financial Inclusion (Global Findex) database. In relation to the overall population, these increases were similar to those of males in emerging economies over the same time frame, however as a percentage, there is plenty of room for growth because the majority percent of women in emerging economies were not able to open formal financial accounts at the time of 2014.
Although there are good reasons to be proud of the huge advancements made across the financial inclusion spectrum over the past few years, there is a huge potential for expanding access to and use of financial services by women that is not yet realized. Globally the gap between women and men was seven percent between the years 2011 and 2014, and in the developing economies, the gap was larger, at 9 percentage points.
The FDIP focus countries mirror this trend globally. In the total of 21 FDIP focus countries that were examined in the report and scorecard for the 2015 FDIP Report as well as the Scorecard only four (Indonesia as well as South Africa, Mexico, and Indonesia) the Philippines, Mexico, and South Africa) exhibited either gender parity or higher percentages of females than males who have reported using mobile money in the past 12 months, or having an account with an institution like a bank or other type of bank.
This gender disparity is not the only disparity worldwide in the access and use of financial services. For instance, rural and low-income populations are typically not served by official financial service providers as compared to their wealthy and urban counterparts. (You are able to learn more about financial inclusion in the groups that are least served across different social, political, and geographical contexts within the 2015 FDIP Report and Scorecard.) In 2014, the gap in account ownership between the lowest 40% of households in emerging economies and the most affluent 60% of households in emerging economies was around 5 percentage points greater than the gender gap in the developing economies.
But, as reported in The Global Findex, the global gender gap in financial inclusion was mostly unchanged between 2011 and 2014, and the income gap for financial inclusion was decreased by a few percentage points. Furthermore, the increase in formal accounts owned for the most disadvantaged 40% of households in the developing world was slightly higher than the growth in formal accounts in women from developing countries during the same time. The gender gap is noteworthy due to its persistence over time, and also for the vastness of the poorest population that it covers.
Ensuring women and girls is a prioritization for both private and public sector players due to the economic and social consequences of women’s participation in the official financial sector. From a micro-level accessing an array of high-quality financial services lets women make investments in their own lives, their families, and the communities they live in in the long run by saving up for the future funding medical and educational expenses, investing in small-scale businesses, and participating in other financial-related activities that are productive. The participants at the roundtable acknowledged that a less tangible, but no less significant benefit of providing the use and accessibility of financial institutions that are formal for women is the feeling of empowerment women feel in having more control over their finances.