The goal of this paper is to boost the understanding and appreciation of the roles that digital financial services (DFS) can play in improving the quality and usage of financial services for women. Through a review of existing literature and case studies of 40 countries, the authors analyze policy frameworks intended to reduce the financial inclusion gender gap.
Findex, a financial inclusion database compiled by the World Bank Group at 3-year intervals, shows an average gender gap in developing countries of 9 percent for both 2014 and 2017. Meanwhile the number of countries with a gender gap greater than the global average of 7.4 percent grew from 46 in 2011 to 65 in 2017. Driving this trend was a rise in the number of such countries in sub-Saharan Africa from 8 to 29.
The authors argue that DFS improve both access to and the affordability of financial services for all users, but particularly for women. In addition to reducing travel costs, women can benefit from DFS through reduced chances of theft while carrying cash, increased privacy from disapproving community members, and increased time for household responsibilities and income generation.
Despite the benefits of DFS, the authors acknowledge several challenges of widespread implementation: (1) women in developing countries often operate in cash-heavy economies where few rural retailers accept digital payments; (2) women have disproportionately low rates of mobile phone usage in developing countries relative to men; (3) the marketplace lacks mobile interfaces that support many local languages; and (4) women are more likely to be illiterate, unfamiliar with technology and inexperienced in interacting with mobile-money agents.
To overcome these challenges, the authors suggest policymakers focus on: (1) evidence-based decision-making approaches using gender-disaggregated data analytics; (2) boosting interoperability and the number of cash-in and cash-out agents; (3) implementing social welfare programs that further women’s capacity to utilize resources such as DFS; and (4) spreading information through pro-woman channels using language and content that promotes female financial inclusion and combats social norms that inhibit women from participating in financial systems.
This is a summary of a paper published by the Alliance for Financial Inclusion; May 2020; 20 pages; available at https://www.afi-global.org/sites/default/files/publications/2020-05/AFI_WFI_DFS_SR_AW_digital.pdf
By Madigan Ruch, Research Associate
Sources and Additional Resources
AFI homepage
https://www.afi-global.org/
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