Bridging the financial inclusion gender gap

Financial inclusion has long been a topic of discussion, especially when it comes to bridging the gender gap. According to a recent report by Bankable Frontier Associates, over 1.1 billion women worldwide are excluded from formal financial systems. While advancements in mobile money and agent networks have made it easier for women to access banking services in emerging economies, the financial gender gap still remains wide. Julie Zoman, a senior associate at BFA, sheds light on the importance of serving women with low and inconsistent incomes to address this issue. Julie explained that although women are making significant strides in various sectors, the average income for women tends to be lower compared to men. However, when comparing men and women with similar income levels, the financial inclusion gap disappears. This highlights the fact that the gap between men and women in financial inclusion is essentially an income gap. Julie emphasizes the need for tailored financial services that cater to individuals with smaller balances and transaction sizes, particularly women with low incomes. The report also challenges the notion of women-specific financial products, suggesting that flexible products like savings accounts with fee structures that accommodate smaller financial flows could be more effective in addressing the needs of women. Instead of creating gender-specific products, the focus should be on developing solutions that genuinely solve women's financial challenges. Julie points out that products like agency banking and M-Shwari in Kenya have successfully bridged the gender gap in mobile financial services by catering to individuals with limited resources. Furthermore, Julie highlights the importance of leveraging social networks as a channel to offer new opportunities to women. Women's networks are described as primarily horizontal, in contrast to men's vertical networks. Understanding how women seek information and opportunities through peer networks can help financial service providers better tailor their marketing strategies. By recognizing the horizontal nature of women's networks, there is an opportunity to empower women by providing access to mentorship programs and peer-to-peer financing initiatives. During the discussion, Julie also touches upon the cultural aspects that influence women's financial behavior, such as savings practices and managing day-to-day cash flows. While some of these challenges may not be inherently gender-related, cultural norms and societal expectations play a significant role in shaping women's financial behaviors. The conversation with Julie Zoman underscores the importance of addressing the financial inclusion gender gap as a means to empower women and drive economic growth. By providing women with tailored financial services, leveraging social networks, and addressing cultural barriers, there is an opportunity to create a more inclusive and equitable financial system that benefits individuals across all income levels. As the world moves towards greater financial inclusion, bridging the gender gap is not just a matter of equality but a pathway to sustainable economic development.