CSR: The unbanked – mind the gender gap
Unbanked women an opportunity for banks; inclusion boosts economic growth.
While the number of unbanked being brought into financial services may be increasing, women in developing economies remain on average nine percentage points behind men when it comes to having a mobile money or formal account with a financial institution.
Robin Lewis, research analyst at the Brookings Institution, points out: “In some countries it is harder for women to obtain identification that would allow them to open an account, or regulation or custom may dictate that they need permission from their husbands to access financial accounts.”
Inez Murray, GBA
Some governments are changing legislation to be more supportive of women. Rwanda, for example, introduced ID requirements that makes it easier for women to obtain the kind of identification needed to open a bank account.
Even so, Lewis continues: “It is also hard for women to leave their families and jobs to travel to obtain ID or to reach a bank. Financial literacy is also lower among women than men in developing countries, and some feel intimidated going to a bank.”
In mobile banking, women lag men because they are less likely to own a smartphone.
Yet, banks that fail to engage with unbanked women may be missing a trick.
According to a report from the Global Banking Alliance for Women (GBA), women customers hold a greater number of products and account for substantial top-line revenue partly because they tend to be in charge of all household finance in addition to running their own businesses.
Inez Murray, chief executive at the GBA, says it is a myth that women are less profitable to banks than men, and an increase in bank data disaggregated by gender is proving that.
She says data will be the key to solving the gender gap when it comes to financial inclusion.
Chile is the only country in the world that, until now, has consistently tracked sex-disaggregated data on its financial system, in its case for over 10 years, under an initiative introduced by president Michelle Bachelet. That data has enabled local banks like state-owned BancoEstado to develop a programme of capital provision for female entrepreneurs.
Data also enables banks to alter their models or create specific products or partnerships that will better target women. Diamond Bank in Lagos for example has a savings account called Beta aimed at low-income self-employed women in the local markets.
Providing women with easier access to financial services would help to boost local economies by enabling women to grow their businesses. A 2015 IMF publication on gender and labour force participation estimates that in a country like Egypt, raising the female labour force participation rate to equivalent male levels would increase GDP by 34%.