Emerging Voices features contributions from scholars and practitioners highlighting new research, thinking, and approaches to development challenges. This article is from Mary Ellen Iskenderian, president and chief executive officer, Women’s World Banking.
This month marks the twentieth anniversary of the Fourth World Conference on Women held in Beijing, China in 1995. Many remember this event for Hillary Clinton’s powerful speech where she said, “It is time for us to say here in Beijing, and for the world to hear, that it is no longer acceptable to discuss women’s rights as separate from human rights.” Mrs. Clinton’s remarks were a turning point for women’s rights on the international stage—a stage that served as an important catalyst for the financial inclusion of women.
The agenda at Beijing reflected an important shift in the strategies used to achieve women’s equality. No less than one-third of the Beijing Declaration and Platform for Action’s twelve strategic objectives focused on women’s economic participation, placing access to financial services as a critical enabling step to realizing these goals.
Pioneers in the field of microcredit, including Ela Bhatt and Muhammad Yunus, took center stage in Beijing to share their experiences lending small amounts of money to poor women. Already in 1995, their work was demonstrating that women were consistently better at repaying loans than men and were also far more likely to invest the resources they generated in their children’s education, nutrition, and health care. As my predecessor, then President and CEO of Women’s World Banking, Nancy Barry noted in her statement to the Conference, “If there is one message that goes forth from these meetings…let it be that low income women are leading the change, by organizing around economic activities and by gaining access to finance.”
Those who continue to work on these issues carry the lessons and messages of Beijing with us today, but of course, much has changed over the last twenty years. We have moved beyond the concept of “microcredit” to a much broader understanding of the financial needs of low-income populations, which in addition to loans, includes savings, insurance, and investment services. We have also further recognized the significant economic benefits of moving low-income populations into the formal financial system—now commonly known as “financial inclusion.” Today, international organizations are also recognizing the benefits of financial inclusion. The World Bank, for example, has identified access to finance as “the first building block for people to build a better life” in its goal to achieve “Universal Financial Access” by 2020.
Most importantly, financial inclusion is now recognized as an important enabler of many other development objectives. Indeed, access to financial services is identified as a critical factor in the achievement of two of the seventeen new sustainable development goals (SDGs). The SDGs will build upon the United Nations’ (UN) millennium development goals and converge with the post-2015 development agenda to be approved and formally adopted by the UN General Assembly later this month.
These new commitments are promising, and this heightened focus on access to finance is beginning to bear fruit. According to the most recent World Bank data, the number of people worldwide with a bank account grew by 700 million between 2011 and 2014. However, the gender gap in those three years remained unchanged. Women are still nine percentage points less likely to have a bank account. Clearly, it is time to revive those messages from Beijing.
For the same reasons noted by early microcredit leaders in 1995, the financial inclusion of women can have profound multiplier effects on the well-being of families, communities, and national economies. By failing to maximize and formalize women’s contributions to the local and global economy, we miss an opportunity for significant economic growth. In the last few years, researchers have begun to measure this loss: a 2012 study, cited by the International Monetary Fund, showed that the gender gap in the formal labor market has contributed to an estimated twenty-seven percent gross domestic product (GDP) loss in some regions.
The pioneers gathered in Beijing were some of the first to advocate for women’s financial inclusion on the global stage. The new SDGs are proof that, in the last twenty years, we have built undeniable evidence that women’s financial access is critical to global economic development. However, there is still critical work to be done: Let’s take advantage of the world’s attention during the month of September to build on Beijing and fulfill the promise of economic empowerment by giving women full and equal access to financial services.