Women’s financial inclusion is positively correlated with economic growth at both the household and global levels. Yet women at the bottom of the pyramid are 28 percent less likely than men to have a bank account – a product of mobility restrictions, cultural norms, and low levels of financial literacy. Mayra Buvinic, Uzoma Dozie, and Mary Ellen Iskenderian discuss how the rise of digital financial services offers new opportunities for women and economic development.
This meeting is part of a high-level series in collaboration with ExxonMobil.
VOGELSTEIN: Good afternoon, everyone. Good afternoon. Welcome. Thank you for braving the elements and for being here at the Council on Foreign Relations. My name is Rachel Vogelstein. I lead the Women and Foreign Policy Program here at CFR, which analyzes how elevating the status of women and girls advances U.S. foreign policy objectives, including prosperity and stability.
I want to begin by expressing my gratitude to Kevin Murphy and Jim Jones of the ExxonMobil Foundation for their leadership on women’s economic empowerment and their continued support for the Council’s working, including our Women and Development Roundtable Series.
Our discussion this afternoon is focused on access to financial services and women’s economic empowerment, and this gathering marks the official launch of She Counts, an ambitious new global platform to put savings and financial tools in the hands of women, spearheaded by ExxonMobil in partnership with Women’s World Banking and the Center for Global Development.
This new initiative comes at a time when evidence of the relationship between women’s financial inclusion and economic development is stronger than ever. And yet, despite this evidence, significant barriers to women’s financial inclusion remain. We know, for example, that women at the bottom of the pyramid are 28 percent less likely than men to have a bank account. We also know that the rise of mobile phone ownership affords new opportunities to advance women’s economic participation and thereby economic growth, and we know this in part because of the research, advocacy and financial insights provided by the esteemed panelists we have with us this afternoon. And we are delighted to welcome them to the Council to talk about how the She Counts initiative will help close the financial inclusion gender gap.
First, we are very pleased to be joined by Mayra Buvinic, an internationally-recognized expert on gender and international development, who currently serves as senior fellow at both the United Nations Foundation and the Center for Global Development. Previously, she was the director for gender and development at the World Bank and was a founding member and president of the International Center for Research on Women.
Second, we are very fortunate to be joined by Uzoma Dozie, who has served as the CEO of Diamond Bank since 2014. He first joined the bank in 1998 and has served in several capacities, including as the executive director of personal banking, retail banking and corporate banking.
And we are delighted to welcome back to the Council Mary Ellen Iskenderian, the president and CEO of Women’s World Banking, a global nonprofit dedicated to giving low-income women access to financial tools and financial security. Prior to her role at Women’s World Banking, she worked for 17 years at the International Finance Corporation and before that, at Lehman Brothers.
Before we get started, I want to welcome Jim Jones, the executive director of the ExxonMobil Foundation, to give opening remarks and tell us more about the She Counts initiative.
Jim, we’re grateful you could be with us today. The floor is yours. (Applause.)
JONES: Welcome to spring in New York City. For those of you who are in here, this is the way it looks. Thank you, Rachel, thanks to the Council, for that really kind introduction. I thought it might be helpful for about 90 seconds to just give you some context of what we’re doing today and how we’ve come here because it really, truly was a journey.
In 2005, ExxonMobil launched a new initiative through our foundation called the Women’s Economic Opportunity Initiative, and in that, we knew, in all of the places where we have investments, that women drive economic change almost unilaterally across the globe. We knew that when women are more fully participatory in their economies that prosperity is bolstered, and that, of course, is good for business, but we didn’t know how best to target our investments. So we asked the question that we do in our business all the time—in order to return the maximum impact of our investments—if you had a dollar to invest in women’s economic empowerment, where is that dollar best spent? And we started on a process in which we spoke to just about every academic, thinktank, government donor in this space and asked that question, and clearly what we got back was a panoply of answers. Clearly, there was no silver bullet in this, and there was no one-size-fits-all mechanism and intervention that would fit all women in all contexts around the world.
So we called a woman who has become now my friend—Mayra Buvinic—because we worked together for so long on this issue, and she commissioned probably two dozen research teams that went around the world asking that question, combed all of the academic literature, and the findings of that study were meant selfishly for our purposes to direct our philanthropic giving in this space. But it became so clear—and Mayra convinced us—that we should actually publish these findings for the betterment of every donor, every analyst, every implementer to really understand these interventions that are proven to work and move the needle on women’s economic empowerment, those that are promising and those, frankly, that need more research. So that publication called, “A Roadmap for Promoting Women’s Economic Empowerment” was published in 2013, was updated last year again; it’s online. If you just google those words—roadmap for promoting women’s economic empowerment—you can find it. One of the issues that the roadmap turned up, as we were trying to think about how to direct our funding, was that when women are encouraged to save, when women have control of capital, when financial institutions design specific products for women, that the impact on women’s economic empowerment on the micro stage is profound and that leads to great macroeconomic development as well. So that’s why we’re here today, frankly, to talk about this very issue of savings and the impact that savings has on women’s economic empowerment. How do you engage with women-owned businesses to deliver another benefit, too? It’s one of the best avenues that we’ve found that drive macroeconomic development in terms of countries and the impact on business is profound.
So that brings us, as I said, to where we are. Mayra’s going to discuss, I think—we didn’t talk about this before so if I say this wrong, you can talk about whatever you want. But Mayra, I think, is going to discuss the results of a very large-scale pilot program that we supported in Tanzania and Indonesia on this issue—designing savings programs for women entrepreneurs. And as I said, it’s really great to see my friend Mary Ellen Iskenderian here, and I think that Mary Ellen is going to touch upon this new She Counts platform that we’ve helped develop, that Women’s World Banking has taken over and going to run with in future years. And, of course, it’s great to see the distinguished CEO of Access Bank here as well.
So let me conclude again by thanking you, Rachel, for hosting us today at the Council, and before we go onto the panel, I think we’re going to show a video of what She Counts is. So thank you all very much. (Applause.)
(A video presentation begins.)
ANNOUNCER: She is strength. She is a daughter, a partner, a citizen, a friend. She is an entrepreneur. Although entrepreneurship may look different around the world, the hope and aspirations are the same. Nearly 1 billion women worldwide lack access to formal financial services. This limits her potential to save money, to grow her business, to create a better life for herself and her family. She Counts is a global platform that harnesses the power of financial services to help her plan and save for a prosperous future. Launched by ExxonMobil in partnership with Women’s World Banking and the Center for Global Development, She Counts works with financial service providers to put savings and financial tools in the hands of women enabling her to save securely, invest in her business, and transform her life. Together, we are creating a world where every woman counts. She believes in her potential. She is driven to succeed. She will build her financial future. She Counts.
(Video presentation ends.) (Applause.)
VOGELSTEIN: OK, let’s get started now with our panel discussion and dive into exactly how this new She Counts platform will work.
Mayra, I’d like to start with you and ask you to give us some context. You’ve led, as Jim said, important field research on women savings—most recently in Tanzania and Indonesia. What does your research tell us about why savings accounts are so important for women and mobile savings accounts, in particular?
BUVINIC: Sure. And there’s—you know, at some point we have highlights and a fact sheet with the results of the first report that we have published. Let me just say, first, that it’s a pleasure to be here. It’s wonderful. And in psychology, there’s, you know, a finding that is very reliable—it says suffering leads to liking. (Laughs, Laughter.) I like being here a lot because it took us quite a lot to get here today. (Laughs.)
VOGELSTEIN: Fair enough.
BUVINIC: So anyway.
VOGELSTEIN: You’ll tell us the fruits of your labor.
BUVINIC: (Laughs.) But let me just say we went—you know, this project in Tanzania, which the project focuses on giving mobile savings plus business training to women, and it’s a rigorous control trial. It has a control group, a group that gets mobile savings, and a group that also gets top business management training, and we wanted to see the effects. And we went to see—to visit the project, and we met this woman, Rose. And Rose tells you all of why we need better access for women for savings. I mean—and Rose and most of the women that were part of the project—and the project, it was 4,000 women so—which 3,000 were either, you know, receiving mobile savings or business management training.
And we went to visit Rose, and Rose has a microenterprise in a big market in Mbeya, in one of the cities in Tanzania, and she now was using the mobile savings platform and she was saving for her business. But she told us, you know, oh—well, you know, well, but I’ve saved all the time—and in fact, 90 percent of the women in the study already saved, used to save, but all informally—and so we asked her, how do you save, and she says, oh, come, I’ll show you. And she took us—her house was very near the marketplace where she worked—she took us to her house. She had keys—you know, she sort of had hanging keys, so she opened the door. Her house was very well locked. She opened the door, she took us inside the house, and then she went to her bedroom. And then, she came back, and she came back with a jar full of coins, a big huge bag full of coins and a lockbox—a wooden lockbox that she had had made. This is how she had been saving.
What she would do is with the profits of her enterprise, the coins, she would put them in the jar. Once the jar was full, they went into the big bag. And then the lockbox was different. So she said: With the savings from the big bag, I want to buy a car. But then, I also need saving for emergency, so I use the lockbox. And then now she had savings for the business. So—and that’s what we called mindful saving, because clearly she had—she had these different—mentally, she was saving in different instruments. And, you know, hopefully she was going to be able, with these savings, to fulfill her dreams. But imagine—I mean, she—somebody could come and steal her savings, you know? I mean, she was in really risky situation.
So the ability—I mean, and that’s another thing that I’ve—now we’ve found with the research. Women prefer to save. And there’s a significant difference between women and men. Men, if you have—if you give access to women to a very basic saving tool, for every 100 women 63 women will access the tool and save. Only 26 men will do so. So there’s clearly a preference for saving. Women use savings to invest in their businesses also, you know, for emergency reasons. But if they don’t have access to the financial system, it just—it’s robbing women of their future and it’s robbing banks from a huge potential cliental.
VOGELSTEIN: So my one follow up. In the research that you did, what did you learn about what works best to promote women’s access to savings, particularly for women at the bottom of the pyramid. What do women look for in providers?
BUVINIC: Right. I think—I think that what is happening—I mean, what we have been trying to figure out now is mobile savings—you know, the mobile technology—how the mobile technology can overcome huge constraints that women have. Why don’t—women don’t go to the banks. And oftentimes, you know, they don’t go to the banks because the banks were away—were far away. The transaction cost of women to go to the bank. So there is the physical issue of going to the bank, their transportation cost. And then, you know, banks—I mean, most people think, well, you know, banks are gender neutral service providers. They’re not.
So that’s the beauty of the mobile technology. The mobile technology’s close to the women. They—you know, it reduces their transaction cost. And then the other thing that we have found out—I mean, and the Tanzania research shows it and then other—complementing other research. The mobile technology allows women to save privately. So they—that increases their economic independence and economic self-reliance. They don’t have to share the savings. They don’t have to tell the rest of the family the money they have, because if they have cash what happens is that some of that cash does not get invested in the business, it goes to family relatives. Female—women feel the pressures of family and to give away some of the cash.
So the mobile technology—and this is—you know, the Tanzania study shows in fact that the mobile technology empowers the women subjectively. It increases their decision-making abilities in the household, at least what they tell us. So I think that that—there’s a huge potential on—of the mobile technology to give multiple benefits for women. To reduce their transaction costs, but also to empower them.
VOGELSTEIN: So we know why it matters. We know now from the research what works best.
Mary Ellen, I’d love it if you could talk a little more about She Counts, this new platform to promote savings for women. What do you hope that the platform will achieve? How will it work? And what is the specific gap that you’re hoping to fill?
ISKENDERIAN: Well, also thank you very much, Rachel, for having us here and for shining a light on this exciting new project that we’re just thrilled to be entering into with Exxon and CGD. I think everything that Mayra just said is so consistent with Women’s World Banking’s work over the last 40 years. We know that given a choice, the—and I would actually argue with you, Jim. I think there actually is a silver bullet and it is savings for women. The product that women most want, the product that will drive the women out of the informal sector into the formal financial sector first, isn’t credit. It’s savings. In the network of financial institutions that we work with around the world, 49 institutions and 32 countries serving a total of 44 million clients, we see that women save on average—(background noise)—whoops—10 to 15 percent of monthly income, with is an extraordinary number.
And so the light that this platform, we hope, will shine on the importance of savings—if we do nothing else with that, I think that will be such a great outcome, because far too often the economic—still, the economic development conversation, the conversation about microfinance and small and medium-sized enterprises is around credit. And we know—you know, one of the things that always kind of gets on my nerves is we keep hearing, you know, women are more risk averse than them. But—and I’d actually love to know whether this was supported by your research—we see very often it’s not so much that they’re risk averse.
If anything, I think they’re sort of risk appropriate. That when women have a place to save and they know they have that cushion of savings, they have that cushion of risk prevention, of risk protection, then they’re very willing to borrow at the same levels, often unfortunately on worse terms than men, but with repayment rates as good or better than men, even in the small and medium enterprise space. But it’s that need for that safety net, that security, that’s the role they play in the household. And savings can provide that.
So on She Counts, we’re really hoping to bring together more researchers and more great research by Mayra and her team, and financial service providers that are interested in exploring this base. And I’m really so pleased that Uzoma’s here today to tell you about the journey that Diamond Bank made into the low-income space. And it was a journey that started with a savings product, not a credit product. And we’re hoping to bring more Diamond Banks onto that platform. Other stakeholders, there are policy issues that are related to savings, to digital, to making sure that women have the identification and the other parts of the puzzle that you need in order to join the formal financial sector. So it’s a place to share best practice.
That network that I told you about, the organizations in it, you know, love us at Women’s World Banking. But what they really love is being able to learn from each other. And so by bringing the She Counts members into that network, that ability to expand the learning, and particularly around savings and what works and even more especially around digital savings, is what we’re hoping to do through She Counts.
VOGELSTEIN: So, Mary Ellen, you mentioned the private sector opportunity. And, Uzoma, I’d like to ask you to talk about the market interests that are at play here. Why did you decide that this was a good market opportunity? Tell us more about your experience promoting women’s access to savings in Nigeria. Why does this approach make a difference, not only for women but for your bottom line?
DOZIE: Thank you. Thank you and thank you for inviting me. It’s good to be here. You know, I’m very pleased with the research findings, because it just validates what we’ve been doing. And I don’t think it would have been successful without the—if we had deployed our solution by ourselves, you know, got it wrong, because we would have used the bank as a product, program to actually drive it. So, you know, working with Women’s World Banking, one of the things that we learned is that you have to actually put yourself in the customer’s position and see the business through her—through her own lenses.
And the reason why we did that, because we took—like, we took a long-term view of the market. And I said, where is the market going to expand? The corporate space is saturated. And there’s a lot of opportunity in the—at the bottom of the pyramid, and also for the excluded. But how do we actually—what mechanism can we actually use to actually drive that? And it has to be a completely different project, because the lifestyles of people that work at the bottom of the pyramid is completely different. I mean, they work harder than bankers. They work—you know, they start at 6:00 in the evening and they probably finish at 9:00 in the evening. So there’s no way they’re going to go to a bank. They don’t understand—and banks—banking language is not simple. So they don’t understand it. They really don’t understand. Nobody does. You know, very simple, logical reasoning.
And so we had to—so nobody was doing it because everybody—they all had mobile phones. But you had to—and then we also had to—so there were two things that were important. How do we use technology is key, and how do we gain trust? You can have the technology, but if you don’t have the trust they’re not going to do any business with you. So I think what we did is first of all we changed the model. We had to take banking to them. So we built a banking solution on the mobile phone. Secondly, we also had to find—get a new set of bankers. So it wasn’t the typical bank stuff. We had to get people who were familiar with the marketplace, that people trusted as well. And then we had to teach them the basics of what they have to do.
So one week, it was getting—I think it was getting—so, I think, it emphasizes the popular line: There’s no economic prosperity without social inclusion. And so you have to actually include these people. So no one will be creating jobs. We are actually providing a solution for these people. And great name—great name, because we did some market study to find out what was an appropriate name they will understand. And we went really—I mean, working with Women’s Banking, we weren’t actually bringing something new into the market. We were actually displacing a traditional way in which they were banking, which was a—(inaudible)—system where really what they did was take the money and give somebody, a man in the market, who would keep it for them and who also would give it to them when they wanted it. And there was uncertainty that they would see him tomorrow as well.
And so when we came up with this proposition, and I think the right market and communication, so we got someone in the market that was very familiar with the people, someone to actually advocate for us and explain the solution. And we saw it was a—the adoption was amazing. You know, and to just to validate that women wanted—it’s not about a product. It’s about what it does. I mean, like, it’s—so when they tell you the story, they tell you how their children can go to school now. They tell you how they’ve increased their business. And they tell you how much they are saving as well. So they’re saving for a life that they never thought that their children would have, or they would actually be able to give to the whole—give to the family.
And so that is—and when we came—and so—and they wanted to separate their transactions from their savings. So they wanted—so and that’s when we came out with the better savings. The savings—the product of just saving. They wanted to save for tomorrow, and they wanted an account to do that. They wanted—they wanted to do their transactions so that they could separate savings from transactions. And on the back-end perspective, what that has done—two things. It increased our liquidity—low-cost liquidity. It has made us—I mean, it has increased our brand equity. So before—(inaudible)—was spending—and what women are great at doing is telling good news. And so, you know, we spend—we could spend money on advertising, it wouldn’t get anywhere. But we have people in the marketplace who are actually saying fantastic things about Diamond Bank as well, and that has also increased our brand equity.
And so I think women are the—I think women are very critical, especially in a marketplace like Nigeria, where 50 percent of the population are women. So you just can’t ignore that market, right? I mean, you know that market. And then they are—you know, they are the center of the value chain of any family. At once they have the say on education, they have a say on what happens in the home. And so the man gets paid, the money goes—a significant amount goes to the wife under her control. So if you’re a banker and you just—you’re not following the money trail, then you’re missing—you’re missing the plot.
So not only—it’s also giving us extending revenue streams as well. And it has to be a deliberate exercise. If not, it’s very hard work. So we now have—I think with all the work that we have done, I think this year we moved the total, I think, the percentage of women in our business—in our customer base has moved from 32 to 37 percent or so. And so every year—and that’s with dedicated drive, dedicated communication. But that’s—I mean, it’s worth it, because it is not—we don’t see it as a charity. Actually, it’s a sustainable business model for us.
VOGELSTEIN: There’s a clear value proposition that you’ve experienced.
VOGELSTEIN: So I want to ask each of you about policy reform, and how we can scale some of the approaches that you’re talking about and researching and testing. What reforms would you like to see at either the national or the international level to encourage savings for women? And what would you like to see the U.S. government in particular do, particularly in light of their stated interest of the current administration in promoting women’s entrepreneurship and economic empowerment? Please, Mayra. (Laughter.) What’s the answer?
BUVINIC: I will start with what I want private sector banks to do.
VOGELSTEIN: Start there.
BUVINIC: And the private sector, and then we can—but—(laughter). And I think, you know, the private sector more generally that have been investing in women for a long time—you know, the ExxonMobil Foundation I think is a—is an example of, you know. Like, most private sector companies—and I think most public sector, also, development efforts focusing on women entrepreneurs—the focus has been on increasing the capacities of women. I mean, you know, women entrepreneurs need more business management training, they need more financial literacy training. All that works. But it’s really very cost—I mean it’s intensive. It’s cost intensive. You know, it’s difficult to do.
There is another side that sort of I think particularly, you know, private sector banks have forgotten about. And it’s service provision. And modifying things on the side of service provision and understanding that your service provision is never gender neutral. That, you know, they are unconscious biases—conscious or unconscious biases that are really preventing women from accessing those services. And modifying that might be much more cost efficient because you don’t have—you know, you have to deal with a much smaller population of bank agents and, you know, tweaking the way that financial service providers design products. And I think that that is something that the private sector should do a lot more of, as well as development agencies.
VOGELSTEIN: And the structural changes, as opposed to individual training approaches.
VOGELSTEIN: Other thoughts on policy changes or private sector opportunities that you see?
ISKENDERIAN: Well, I guess a couple of things that have come up in this conversation I think have sort of obvious policy implications for them. You know, digital financial services are the way we are going to reach the un- and under-banked. I mean, that is a statement that pretty much everyone can agree on. But there are models around which that access that are being built, that regulatory agencies have a lot of say. And agents—building banking agents and some of the thinks that Mayra’s referred to. You know, regulators can really get in the way of determining how well those agent models are set up.
You know, I think some of the experiences that Diamond Bank has had in Nigeria, there’s, you know, a requirement that banks and mobile network operators pair, making sure that the regulator kind of stays out of the way of what those commercial arrangements between those two private sector players are is absolutely critical. We’ve seen enormous moves forward in terms of financial inclusion in India as a result of electronic identification. Stupendous change there, really.
What we’re still concerned with and really need to stay on top of is just because you have an account and an identification doesn’t mean you’re actually using it. And I think that’s where Mayra’s admonitions around service provision are hugely important. But Women’s World Banking is doing a great deal of work with the Indonesian government right now in setting its national financial inclusion strategy to have as their—quite remarkably, actually, for a Muslim majority country—they are at gender parity in financial inclusion. And they’re hoping as they increase that to more and more parts of the economy, that they maintain as close to parity as possible.
We took them to India. They were amazed at what that electronic verification and identification process could bring about. And it’s now a number one priority there in their financial inclusion strategy. So we wanted to make sure that the services that are then provided with that identification are kept. And I guess what I would say about the U.S. government—again, Women’s World Banking’s been very fortunate over the years to be included as a representative—or, I think associate member is our name at the G-20, conversations around financial inclusion.
And I have to say that as strongly as many people will have, you know, dinner table conversations with you about the power of tiered know your customer requirements and a broader access to identification, in the formal G-20 conversations, the United States is all about terrorism financing and money laundering and really not thinking in a particularly nuanced way about the need for easing identification restrictions for certain purposes and certain places. So I’d say maybe taking some of that nuance that we know the policymakers have and bringing it into the conversation.
DOZIE: Well, I’m not U.S., but I think our government’s almost the same. (Laughter.) So I think there’s a lot of policy, but I think it’s a question of strategy. How do you execute on some of these things? And we find that in Nigeria you can—I think we underestimate the amount of training that is required, right, to actually—so it’s not about—and more people see financial inclusion or, you know, using digital—trying to go to digital as a nice to have and not as an imperative. And it has to be an imperative, because there’s a cost of being financially exclusive to a government. There’s also a cost when, you know, a lot of cash is being used—corruption, especially in a developing economy, corruption and leakages.
So from the policy perspective, I would say you’re trying to promote incentives for gender diversity—the diversity. And not subsidies, but incentives as to knowing that—knowing that especially in an economy like Nigeria, where 50 percent of the population is women. And so if you’re going to increase consumption and GDP, you have to have a more inclusive population. And then you have to move—if you want to really track and understand what’s happening in the economy, you have to move from less cash to more electronic payment so that you can now better allocate resources and really because people only—people are financially excluded as well because they might—I mean, there’s a tax issue. What am I paying taxes for? So if I do not feel I’m going to get any benefit from government, I will stay out. But it is still expensive, both for the individual and also for the government as well. So that would kind of be my input on that.
VOGELSTEIN: So quite a menu of proposals that have cast here. (Laughter.) Well, I’d like to open the conversation. So if you have a question, please state your name and affiliation. We have microphones coming around and we’ll get to as many as we can.
Q: First of all, thrilling to have you all here. (Laughs.) I know two of you—three of you quite well.
Two observations, with related questions. This issue of mobile money and this, you know, uneven penetration of access to mobile. Nonetheless, I think it’s extremely important. And with, for instance, our work on adolescent girls, we have tried to get mentors—this is through—paid by mobile money. I see a huge opportunity for some experiments to be done in both, you know, nongovernmental civil society efforts—because NGOS—one thing we saw was that if the mentors were paid through the NGO they would stop being paid, because of course they’re female and they don’t need the money. So mobile money provides a channel and entitlement and so forth for them.
So we insisted, rather than giving grants, to do—for some of the organizations just to pay their mentors directly using mobile money. Teething problems, but still. There are places, like Ethiopia, where 33,000, you know, community health workers, all female. How are they paid? What if we switched it to mobile money, or did a controlled case? I bet it would make an enormous difference. It would also be much less easy to sideline them or swap out their jobs. So that’s one thing. A lot of entitlements that are having trouble getting there anyway operate through females who are doing work being deprived access to their wages.
The second is that a lot of other innovations—green and renewable energies—have with them financing packages and assumptions which are if not enabling, are really hostile, but could be adapted. I mean, packages that would allow, for instance, women living with school-age children to have a package for, you know, solar panels and so forth—looked into this a little bit—but that were much better adapted and could use, in some ways, some savings—some savings instruments. I think new savings instruments, including energy-saving instruments. Again, those are, to my experience, completely un-adapted. So what do you know about it? What can be done about it?
VOGELSTEIN: Thoughts, Mayra?
BUVINIC: Well, I mean, very much agree with Judith. I mean, the potential for mobile payments for women—for young women, I mean, is huge. I think it’s starting to be done. I mean, some of these cash transfer programs are staring to put monies in mobile. But, you know, the potential is huge. And I think that that’s where there should be a lot more investment and experimentation. I just want to add also, on sort of the policy side, I mean, one of the great things—and I have to really salute the ExxonMobil Foundation in terms of really sort of trying to look for the rigorous evidence and investing in financing, you know, research that is very rigorous.
You don’t have to do rigorous evidence all the time. But in these kinds of things, to just get the basic knowledge, I think that rigorous evidence is very important. And it will be—you know, it’s wonderful that She Counts also will bring that, sort of the rigor of the evidence to evaluate and see which programs work and which programs do not work, so that we can—you know, we can—we can—instead of sort of trying out things that, you know, people keep trying without knowing if they work or not, we’d be investing wisely and smartly in things that worked.
ISKENDERIAN: You know, I guess just the only thing I would—you know, I—pretty much everything I know about youth savings I know from Judith. So I’m not going to in any way—(laughter)—contradict anything she said. The one point—and we were actually just talking about this in the office earlier today—on the solar packages, some of you may be familiar with, and I know ExxonMobil has supported some of them, is pay as you go solar panels and solar lights that are being very popular throughout the developing world. You pay on your mobile phone, sort of on a—on an installment basis. And then at the end of the payments you own the solar—the solar lamp.
This has been—you know, it’s fascinating from so many different financial aspects. You’re—there are credit algorithms that are being derived against how frequently you pay and when you pay. Do you pay, you know, 15 minutes before your payment’s due? Do you pay, you know, a week before it’s due, whatever? But what’s fascinating for women in particular is that when you have completed that payment, you then own a physical asset. And as all of us—now I’m going to talk about credit, even though I said it was all about savings. But when—any of us who’ve worked in credit know that the biggest barrier to women gaining greater credit to access—access to credit is collateral. And so you’re starting to see some, not all, but some of these pay as you go solar companies actually turning more into financial service providers, because they’re willing to lend against that physical collateral of the solar lamp.
The one that I’m most familiar with has actually come to us and said: the men that own the lamps all want to buy TVs on credit with the lamp. The women are coming to us and saying: You know, is there any way I could borrow for education? Could I borrow for inputs for my farm? So they are recognizing the different things that women want to borrow. And so I completely agree that we should be trying to think beyond just the clean energy provision and think more broadly about what that might bring to the life of that woman and her family.
DOZIE: I was just—I was going to add that I think thinking about mobile money restricts what we can do, because mobile money is, like, confined networked. Interoperability is limited. And so it means we have the same problem Mayra was talking about, people just think about what they can do within the set. So I mean, for Diamond Bank we think of full digital financial services, full interoperability. And so that—when we came out with a better proposition, and also the Diamond Y’ello product with MTN, it was a full savings account. So it wasn’t one where you were just restricted to the telco and the bank. It was one where as soon as you opened an account you could transfer money to anybody in Nigeria and you could also receive money from anybody in Nigeria.
And so what we’re trying to do is—the problem with mobile money is that without digital liquidity it’s only—it’s great for savings. That’s what it is. Great for saving in confined—like, in a small community. But you need to expand that platform so that anybody can play in it. And so that—so mobile money was great in Kenya because they had one—for that time, it was solving the problem that the banking industry needed to solve. But today, I think the more sophisticated platform in Nigeria, mobile money has not worked because there are many licenses, and the banking platform is more superior. It’s now how do we scale that? And to scale that, we need to educate. And we need to make sure that everybody understands what the benefit is.
VOGELSTEIN: Many ideas here, with the thought and ideas to study. (Laughter.) A question down in the front.
Q: Thank you. Ramu Damodaran with the United Nations.
In most developing countries, traditionally husbands and wives have had joint bank accounts, normally initiated by the husband, and the wife is a co-holder. With more and more women opening their own accounts, husbands now become the co-holder. And in India, we’ve had a civil society movement saying that that should be made illegal, so that husbands don’t begin cashing their wife’s earnings. This, as you can imagine, was enormous opposition because of the questions of the institution of marriage, inheritance, and so on. But do you think that there is a case for declaring such joint accounts illegal, and ensuring they’re held only by women?
VOGELSTEIN: Thoughts on joint accounts. (Laughter.)
DOZIE: Well, I think in Nigeria—so what I think we—the KYC laws have made it easy for women to open an account, because to open an account you have to have your own personal identity. And so if you’re buying for verification, you have to have your own identity. You don’t need your husband or anything—in fact, he won’t even know you have an account as well. It’s confidential. So that is—so I don’t—so we don’t need to go that far. So I think it’s making a provision that allows people to—women or men to open an account without a partner being involved or having to sign a document. I know in some other parts of the world to protect women, for example mortgages, the woman has to sign off on the acquisition or the sale of the asset. But I think just to open an account, there are provisions that can be implemented to safeguard either male or female.
BUVINIC: There is—you know, there is an incredible experiment result, and I think it was in Kenya—where they—men and women were given ATM accounts. And one when were individual—they could open individual accounts and joint accounts. And then they were given sort of access to opening and using the accounts. Men used the joint account and invested in the joint account, regard—you know. The women did not touch the joint account, because they knew if they invested the money in the joint account, it was going to go to the husband. So it was only the individual account they invested.
So I think—I think, you know, there is an issue there. But also, there’s another—there’s another study in Malawi, I think, that finds out that really both men and women prefer individual accounts, particularly for business purposes. So I think as you were saying, you have to ensure that the accounts are secure and they’re private. And I think, you know, you have to sort of—always sort of have the choice of an individual account.
VOGELSTEIN: Some important evidentiary basis to answer that question.
Q: Bonnie—(off mic).
Q: What are the basic criteria to open a mobile savings account? Is it just a phone? And I assume it varies from country to country, but what are the basic criteria?
ISKENDERIAN: Uzoma, want to talk about Nigeria?
DOZIE: Oh, Nigeria is very simple. I mean, so once you—I think you have to go through the same registration. So that registration is the identification that we need. So with—if there were an ATM line all you have to do actually is dial star-7-10-hash. And then you open an account. So it takes about 45 seconds. And then you have an account open for you. A fully fledged—a fully-fledged account. So it’s quite—so there’s been a lot of advancement, because for us, I mean, I think one of the things, you know, and the—and the innovation created with this—like, I’m going to the bottom in Nigeria, because to get to the bottom of the pyramid you really have to be innovative and you have to go really develop solutions for that, so—and make the—make the procedure as simple as possible. So that—because the simpler it is, the more trust is actually introduced into the system. The more complex it is, you know, it’s very difficult. And it becomes very expensive as well to manage. So 45 seconds to open an account.
VOGELSTEIN: Wonderful. Over here in the front.
Q: I’m Nancy Kinsner (sp).
I read yesterday, I think it was in the Financial Times, a startling fact. And that’s that 44 percent of Americans, were they to need $400 for emergency needs tomorrow, wouldn’t be able to come up with $400 and would have to borrow from somewhere. Given that probably half of those, at the very least, are women, I’m wondering if Uzoma could advise whether or not there is a similar system to what you have in Nigeria that could be used or is being used by banks in the U.S., and whether or not we should try that to increase savings here.
DOZIE: So I think this technology issue, so while we don’t have any legacy systems because we are—I mean, Diamond Bank is only 25 years old. So the systems that we bought were value systems that could interface with the new technology that we have today. So you find—so, and currently in Nigeria it is only legislation and companies that are actually slowing down full digital banking because as of five years ago, I could actually make a payment, a P2P payment, a mobile P2P payment, immediate value transfer. So all I need is your 10-digit number and a bank, I put it in my mobile phone, and you have a value immediately. And so there are many use cases there.
Now, it’s easy because the platform allows it to happen. And so—and that encourages savings. So we see a lot of savings because people find it is—I think savings increases when access to your money is easy. So if I can access my money at 2:00 in the morning or may a payment at 2:00 in the morning, I’ll put it in the safest place. And so I think it’s providing that platform where you can access it at a cost-effective price—at a cost-effective price.
And so I think—and so even at Diamond Bank today we are actually reinventing ourselves, because before our system become legacy, so we’re building the next platform so to cannibalize the existing business. And I think it’s a painful, slow journey. But I think that’s what a bank needs to do every so often, because our customers’ preferences are changing. So, you know, my—the way my 15-year-old daughter is going to do banking in five years’ time is completely different from what we do today. And so we have to start building those systems which is going to be purely mobile and is going to be a—it’s going to be like Google-speak and not banking-speak at all. (Laughter.)
BUVINIC: The other thing, you know, that you can do in the U.S. that works, and actually in the Tanzania study, reminders to save. And you know, sort of on a regular basis these women are getting reminders to save. So you have your mobile platform. It comes, you know, a little reminder to save. And those things worked and worked quite well.
DOZIE: And I’ll just follow on. In fact, we just launched DreamVille. So it’s a platform. It’s a gamification platform for the youths to save. And so they get points for saving and they get rewarded and on. And so it’s interacting with ed. So the bank account is connected to the platform. So they save, they play, they get rewarded. And this is teaching them the value of money as well. I think once people understand the value of money, then they appreciate it and they save. If you don’t understand—my son doesn’t understand the value of money. So he doesn’t save. My daughter does. So she actually saves that. So we knows how much a dollar is. My son doesn’t know at all. (Laughter.) He just knows that I’m going to pay for it. (Laughter.)
VOGELSTEIN: Well, according to Mayra—well, according to Mayra, that’s in line with the research.
DOZIE: Right. (Laughs.)
VOGELSTEIN: So there you have it. That’s clearly global—truly global implications from all of this work.
Over here, please.
Q: Hi. Masuda, Insight Group. Thank you. Masuda, Insight Group.
For women that do save, and my experience is more directly from Afghanistan, I found that they don’t really know—I mean, besides maybe the very low interest, say, they get on their money, sometimes nothing at all, what to do with that savings. What are you finding in the countries that you’ve worked in in terms of women who actually do have some savings. Do they put it to use? Are there things, products that the banks target towards them? I found an extreme lack of knowledge for women who do have a little bit of savings on what to do with that savings, except for save it for an emergency.
VOGELSTEIN: Mayra, what does the research say?
BUVINIC: Yeah, no, they use it. They use it particularly for businesses. They’d rather save than get loans for business purposes. So it’s surprising. You’re--you know, it’s surprising, the Afghanistan finding. But—
ISKENDERIAN: Well, I know women entrepreneurs are much more likely to use savings as a startup funding, because they’re less likely to get sort of the friends and family capital that men have easier access to. So we do see the same thing, that they’ll use it to support businesses. I think your findings also were supporting this kind of concept of, you know, savings for different—you know, saving for the wedding, saving for the family, saving for the retirement. You know, sort of different pockets that are saved for. And it all really comes back down to financial education. And I don’t know how much the women you’re going to be with have that—
Q: So, sorry. I should have maybe clarified the question, which is what are the options? Let’s say a woman has saved $1,000. What are the options for her to earn on that money while she’s waiting to deploy it for something else? You know, we know that interest-bearing accounts don’t give hardly anything at all. Do banks think about products to target to them—CDs or other kinds of things? Like, where is that?
DOZIE: So we’re going to see. So in Nigeria, so women save for many reasons. And it depends who you are. If you are a businesswoman you save. You have a plan about your business. If you’re a mother, you’re saving for your children. But also, they save for independence as well, just in case the guy walks away. Just in case—you know? So they save for the family just in case as well. So, but what we’ve done—what we’ve—I think one of the things that we’ve done in Nigeria for savings, because we can’t pay the high interest rate.
So our basic savings product, which has been very successful for the last 10 years, is—you know, is a lottery program. So the interest rate is crap. But, you know, you have—like, you know you have people winning are decided for life, or different kind of things in their communities and grand national. And that’s why we’re successful. So, in developing countries, people like hope as well. So you have this thing, like if you save you might be a millionaire tomorrow. You save, you might just win this. You save—(inaudible). So that gives people hope as well. So it’s an incentive.
I mean, you might not get high interest rates. I know the interest rates will not do anything for you because inflation is 15 percent and if I give you 10 percent you are losing value 5 percent every year. So people will buy—so you’re only saving for hope. And you’re not saving because you’re getting real returns on your money at all.
ISKENDERIAN: The only thing I’d add to that is that the only thing that has made a bank like Diamond Bank and others like them find it worthwhile to take very small savings deposits is the digital equation. And so we’ve got to come up with digital solutions on the investment side for that $1,000. We’re—it’s very exciting. You’re starting to see some—and I’ve seen a couple in Africa—some digital pension products, so that a woman would be able to save longer term. In India, they’ve got still—you’ve got way too many restrictions around it—(laughs)—but there are pensions that can be—that can—you can enter into with very, very small, individual, monthly deposits. So it’s coming, but it’s going to be digital that’s going to lower the cost to whoever that financial service provider is, to make that return on investment, you know, worthwhile to them as well as to the woman to put her money there.
VOGELSTEIN: Mayra, a final word.
BUVINIC: I was just going to say that the surprising thing is that women will want to access a savings account even with no interest whatsoever. You know, they’re willing—they’re willing just to have the money saved in a secure place. They’re willing to do it. So and we were talking about, well, maybe they’re risk averse and that’s why, or they’re sort of more rational. But the alternative to risk aversion is that women versus men have a wider set of risks or their perception of risk because—you know, because they have a wider set of risks. So that’s why they’re seen on average to be risk averse.
ISKENDERIAN: That’s a good way of putting it.
VOGELSTEIN: Important insight. Mary Ellen.
ISKENDERIAN: Well, and the guys that he was talking about, you know, going around the market holding the money, women would pay them to keep their money. It wasn’t even a question of interest. (Laughs.) So.
VOGELSTEIN: Right. Really important context.
Well, it is clear that more work remains, more research is needed to promote women’s financial inclusion around the world. But there’s no doubt that this new She Counts initiative and our discussion today are an important step forward. So please join me in thanking our speakers for being here today. (Applause.) Thank you all. (Applause.)
This is an uncorrected transcript.