Why technology matters for advancing women's financial inclusion

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Women in developing countries are 21% less likely to own a mobile phone than men ©Reuters/Thomas Mukoya

Women are consumers, business owners, farmers, employees and entrepreneurs. They are dependent on market systems and need access to finance to manage their livelihoods.

The gap between women and men in access to formal financial services is great. In developing economies, women are 20% less likely than men to have a bank account and 17% less likely to have borrowed from a formal institution in the past year. This disparity, particularly within the population at the bottom of the socio-economic pyramid, has knock-on effects: women’s inability to access finance also impedes their tapping into market opportunities, thus widening the gender gap.

Legal frameworks and cultural norms condition market dynamics and may limit the space in which women can operate and interact. OECD analysis has shown that in many countries, such as in the Middle East and North Africa region, custom and legal frameworks insist on male signatures for women to open bank accounts.

Moreover, women are typically found to have lower awareness and knowledge than men about financial matters, and have lower confidence than men about their financial skills. This can present significant challenges to women in making decisions about their income or assets.

To close the gender gap in financial inclusion–and to expand women’s overall level of access–policymakers and financial services providers need to understand what women value when it comes to financial products and services. In a variety of settings, the answers given by women are strikingly similar: convenient, reliable, secure, private. When these attributes are taken into consideration, the benefits to women, in terms of greater economic participation and empowerment as well as greater account ownership and asset accumulation, are significant.

There is also great value in drawing lessons from informal financial systems in order for financial service providers to cater to women’s financial needs and preferences, as women are often found within this sphere. Because of collateral and other requirements imposed by formal financial institutions, informal services such as microcredit represent an easier source of revenue for women, who are less likely to own land or assets. In the 2014 edition of the OECD’s Social Institutions and Gender Index (SIGI), two-thirds of the countries surveyed had discriminatory laws or practices that restricted women’s access to land, assets and financial services.

Correspondingly, commercial viability must be part of the business proposition to target women and in order to be able to cope with growing demand and be sustainable. This is particularly important, as financial service providers still perceive women as a higher-risk, less profitable client group, despite the fact that women in many contexts have been proven to be reliable clients.

The use of digital financial services has the potential to address women’s preferences in new and exciting ways, as well as to reduce the cost and time of service delivery. In Malawi, for example, with UNCDF support, Women’s World Banking and NBS Bank designed the Papfupi Savings Account to give “mtima myaa” or “peace of mind” to its clients. It does so by using mobile phones in rural areas as a transaction point to make deposits and withdrawals, and with the help of the mobile sales team, clients can even open an account in ten minutes from anywhere. The product conveys information simply and visually so that the customer does not need to be literate.

In Niger, evidence from the social cash transfer programme demonstrates that the greater privacy and control of mobile transfers compared with manual cash transfers shifts intra-household decision-making in favour of women.

In Kenya, the arrival of mobile money transfers increased women’s economic empowerment in rural areas by making it easier to request remittances from their husbands who migrated to urban areas for work.

In India, trust was a particularly important issue for women, especially when dealing with unfamiliar mobile technology. In these settings, agents played an essential role in training and supporting women in their use of the technology.

Digital financial services can be offered in many forms, including automated teller machines (ATMs), point of sale terminals, cards (pre-loaded or debit), and mobile phones. However, the “digital divide” between women and men cannot be ignored. In many contexts, women have less access and are less adept in the use of technology. For example, the large gaps in mobile subscriptions (there are some 300 million fewer women subscribers than men worldwide) and ownership (women in developing countries are 21% less likely to own a mobile phone than men) means that if digital financial services are going to deliver on their promise to women, these gaps need to be taken into consideration.

Take, for example, the Benazir Income Support Programme (BISP) in Pakistan. It was thought that mobile phones would be a low-cost and convenient way for women in remote areas to interact with a bank. The reality was that many of the women neither had a phone nor knew how to use one.

Governments also have an essential role by creating an enabling regulatory environment, establishing an appropriate financial consumer protection framework and catalysing a digital ecosystem. They also have a responsibility to remove discriminatory practices and laws for women’s access to finance.

The post-2015 Sustainable Development Goals feature financial inclusion as a key enabler to multiple goals.


Lehrer, Rachel and West, Harry (2014), “Working with the poorest women in Pakistan”, CGAP (Consultative Group to Assist the Poor), http://www.cgap.org/blog/working-poorestwomen-%20pakistan.

Morawczynski, Olga and Pickens, Mark (2009), “Poor people using mobile financial services: Observations on customer usage and impact from M-PESA”,CGAP, http://www.cgap.org/publications/poor-people-using-mobile-financial-services.

International Bank for Reconstruction and Development and The World Bank (2014), “The opportunities of digitizing payments”

OECD (2013), Women and Financial Education: Evidence, Policy Responses and Guidance, OECD Publishing.

OECD (2013), “OECD/INFE policy guidance on addressing women’s and girls’ needs for financial awareness and education”, OECD Publishing.

OECD (2012), Closing the Gender Gap: Act Now, OECD Publishing.

OECD Social Institutions and Gender Index, see http://genderindex.org/resourcesassets

For more on financial education and inclusion, visit http://www.oecd.org/daf/fin/financial-education/ and see the World Bank Financial Inclusion Data at http://datatopics.worldbank.org/financialinclusion/

Visit www.oecd.org/gender/

©OECD Observer Special offprint, July 2015

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