Financial Inclusion for Women

In recent years, global leaders and development economists have heralded financial inclusion as a critical tool to promote economic growth and provide a bridge out of poverty for millions of people around the world. As international partners drive towards the World Bank’s goal of universal financial access by 2020, the time is ripe to take stock of the progress that has been made and the crucial gaps that remain—particularly for women.

According to the Global Findex, a comprehensive database on financial inclusion, about 700 million people opened bank accounts between 2011 and 2014, contributing to a remarkable 20 percent drop in the number of unbanked adults worldwide. This progress occurred at a far faster rate than many experts and international development practitioners had anticipated, in part due to mobile technology. Yet, over this same time period, the gender gap in access to financial services remained almost exactly the same. Research demonstrates that the financial inclusion gap between women and men, which is present even in some developed economies, is far more pronounced and stubborn in emerging ones: indeed, in the regions with the widest gender gaps, including the Middle East and South Asia, women are one-third to half as likely as men to hold bank accounts.

By definition, efforts to promote inclusive finance should have at their core the inclusion of women, who comprise a disproportionate percentage of the world’s poor. Yet some financial inclusion programs focus primarily on expanding access without analyzing the gender distribution of uptake. Inclusive finance policies that fail to consider gender inequalities could actually serve to exacerbate the gender gap in access to finance: for example, setting a goal of one bank account per household in a country with conservative gender norms and familial roles ultimately may benefit male heads of households to the exclusion of women.

Closing the gender gap in savings products is essential to realizing the promise of financial inclusivity. It is also critical because the business case for women’s financial inclusion has grown. The clearest bullhorn for the importance of women’s inclusion comes from Chile, the only country in the world to have consistently collected sex-disaggregated data in its financial system. Nearly fifteen years of data show that, in fact, women save differently than men: they hold more savings accounts, pay back loans faster, default less often, and bounce checks less frequently. This evidence supports the proposition that women are safe bets for banks—and, therefore, that increasing the proportion of female account holders will decrease systemic risk in the economy. In the wake of an economic slowdown that has roiled markets from Athens to Islamabad, the notion that greater financial inclusion for women could foster economic resilience and stability is one well worth pursuing.

Economic policymakers must look broadly at the effect of financial services—who is using them, and how—rather than at access alone. More sex-disaggregated financial data are needed to better understand the role women play in family finances and develop policies and products that will encourage women not only to open bank accounts but also to engage with other formal financial systems. In the movement for global financial inclusion, multilateral financing institutions, governments, the private sector, and civil society all have an important role to play to better understand the case for women’s financial inclusion as a business opportunity and to promote the development of financial products that are valuable to all users—male and female alike.