Global leaders say financial inclusion is key to empowering women
This article was originally published on Care Insights and is republished with permission.
Unless women have more empowerment, autonomy, and access to resources, we are not going to achieve change. Those are the words of Luis Guillermo Solís, President of Costa Rica and women’s economic empowerment advocate, speaking at an event on financial inclusion co-hosted by CARE and Women’s World Banking at the UN (21 September 2016). Our event was followed by the release of the report of the UN High Level Panel on Women’s Economic Empowerment – so what actually needs to happen for a radical step change in accelerating women’s economic empowerment?
Financially include all women by 2030
CARE believes that by 2030, all women should have access to good quality financial services in a way that can empower their lives. Our own experience has proven that when women – even those living on the poverty line – are supported to save and link to formal finance accompanied by financial training, it leads to a statistically significant fall in poverty: women report an increase in contributions to spending on health, education, housing and food (Banking on Change).
Digital finance – the use of payments and financial services delivered via mobile phones and the Internet – has a key role. According to a new report by McKinsey Global Institute, financial inclusion (when delivered via mobile phones) can ‘benefit billions of people by spurring inclusive growth that adds $3.7 trillion to the GDP of emerging economies within a decade’.
Yet still, 1.1 billion women are unbanked.
This is why we gathered global leaders – including representatives from CARE Burundi, the UN, leading businesses including financial service providers, foundations, investors, and academics – to galvanise commitments and make recommendations for reaching 1.1 billion unbanked women with solutions proven to work, at scale. Here’s what was discussed:
1. Invest in literacy ‘on all sides’
Ultimately it is ‘quality access’ that leads to the transformation of women’s lives. Investing in women’s financial literacy is key to building financial capabilities that enable women to make informed decisions on accessing formal finance. At the same time, it’s just as important to demand more from businesses to tailor their products, improve their distribution channels and invest in marketing aimed at women.
2. Improve gender-disaggregated data
Organisations such as banks are chronically under-collecting data on the gender composition of their clients, making it difficult to understand their customers’ needs, or to make a commercial argument to serve more women. There is a business case to serve more women. We know from CARE and Accenture’s Within Reach research that under-banked women represent a major part of the $380 billion business opportunity for banks through deepening financial inclusion.
3. Create new innovative partnerships – including business to business
Cross-sector collaboration is considered central to any chance of achieving the Sustainable Development Goals by 2030. However this is nothing new, is easy to promote, but not often done. That’s why it’s a central call to action in the new report by the United Nations High Level Panel on Women’s Economic Empowerment.
4. Scale up what works
Key drivers to accelerate financial inclusion include delivering financial services through mobile and broadband, digitising worker payments, integrating financial inclusion within supply chains, transforming government cash payments into digital payments and scaling up CARE’s Village Saving and Loan Associations (VSLAS).
VSLAS have been identified by the new UN report, which states that ‘a multi-pronged approach to financial inclusion for poor women— so that access to credit is accompanied by financial and business education and by access to savings and insurance products – can better address underlying constraints.’ This method is also proven to reduce the gender access gap, which stands at 65% of men in developing regions owning an account, and 58% of women, with the gender gap remaining consistent (Global Findex Database 2014).
5. And, of course, all solutions should have women at the forefront
Nothing about us, without us. Women’s voice and participation needs to be at the heart of any recommendations and initiatives for financially including all women by 2030.
UN: Financial inclusion is central to economically empowering women
The event was held on the eve of release of the first report from the United Nations High Level Panel on Women’s Economic Empowerment, which identified building women’s digital and financial access opportunities as one of their seven key drivers to accelerating women’s economic empowerment.
Access to finance is a key consideration in the report, and financial inclusion is viewed through the prism of women’s access to assets, including digital. Here’s what the core call to actions are for accelerating financial inclusion:
- Law, policies and regulations should support digital inclusion while addressing safety, privacy and data protection concerns.
- Broadband plans should address gender-specific barriers to access, affordability and adoption, with adequate funds for implementation.
- Public–private partnerships can improve digital access for disadvantaged populations, with innovative solutions to serve rural and remote areas.
- Affordability needs to be addressed in many countries, especially for low-income customers, through reduced pricing or free access.
- Design programmes specifically targeted to increase women’s access and use of mobile phones and the Internet.
- Training and mentoring programmes can improve women’s digital literacy.
- Increase local content relevant to women on the Internet in developing countries.
- Eliminate legal gender differences in inheritance and property ownership limiting women’s access to capital.
- Simplify the procedures to obtain official personal identification.
- Reduce the costs of opening and maintaining a savings account.
- Digital financial solutions have enormous promise.
- Better tailor financial products to women’s specific needs; expand financial and business education and access to savings and insurance products.
- Support financial cooperatives of women.
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