Understanding how technology has solved for barriers that women face in accessing and using financial services was the topic of a lively panel discussion that Alliance Chief Executive Inez Murray spoke on at the 11th Global Policy Forum of the Alliance for Financial Inclusion (AFI), held in Kigali, Rwanda, last week. Noting the importance of not treating 51 percent of the population as a homogenous block, Murray focused on two segments: the unbanked and what is called the “missing middle” — very small enterprises (VSEs), that fall between traditional microfinance/nano-finance and traditional SME lending.
For unbanked women, biometric IDs are a huge breakthrough, and as Alliance member Mastercard has found in their Jaza Duka program in Kenya, women also need support to be on-boarded to the digital highway. Beyond the basic mobile wallet, the capacity to earmark savings for specific life moment events through “envelopes” and gamification to encourage savings — prompts, goal setting, etc. — are important, mimicking existing financial behaviors using informal mechanisms. Building up a transaction history enables financial services providers to issue loans without collateral, which has always been a huge barrier for women. And emerging innovations to manage her risk — from micro-insurance to pensions — are a welcome iteration in the financial inclusion movement.
Looking at the non-financial services piece, mobile technology enables sharing information, financial and business education via app. An excellent example was presented by FSD Zambia, which has partnered with Zazu to deliver digital financial education courses via USSD, SMS and voice channels. The courses teach about income, loans, savings, insurance and mobile money. For example, a user can dial 619 and listen to a course on how banks work. Similarly, they can dial *619# and read the same content. This eLearning approach has the promise of closing the information gap faster than organizations can send representatives on the ground, lowering costs and increasing the standard of financial literacy.
When asked her greatest achievements regarding financial inclusion of women, Mrs. Lobna Helal, Deputy Governor of the Central Bank of Egypt, cited the digitization of conditional cash transfers to women in Egypt, including an estimated 500,000 widows who came into the formal financial system due to the state support they receive. Mrs. Helal also mentioned the important work Central Bank of Egypt has done in examining the gender composition of its own workforce and modeling gender diversity and inclusion initiatives, which it hopes to encourage the banks to adopt.
Looking at the second segment Murray discussed, financing VSEs, information from a variety of sources to give credit scoring and enable underwriting of a loan; the automation of accounting information that can enable the completion of basic books and cash-flow forecasting (a key requirement for any business seeking to access a loan); and Blockchain, which will allow collateral such as property where titles have been digitalized (as they have across Rwanda) is all becoming available at the click of a button. This will enable access to more credit on better terms and at lower costs.
Fellow panelist Shungu Gwarinda, Acting CEO of the Graça Machel Trust —the umbrella body under which Alliance member New Faces, New Voices sits — stressed the importance of building networks of women entrepreneurs and networks of women working in the financial services sector to solve the demand- and supply-side barriers to full financial inclusion of women.
The importance of civic society groups in developing female-friendly entrepreneurial ecosystems cannot be overestimated. Indeed, the importance of partnerships between ecosystem players was much referenced. Murray gave the example of sex-disaggregated data, citing the UK’s Investing in Women Code — an initiative with HM Treasury spearheaded by Royal Bank of Scotland to which almost all major UK banks and some alternative lenders have agreed to report on their levels of lending to women business owners. Such transparency will encourage market development. The notion that encouragement rather than mandatory reporting is likely more productive was stressed by Murray, as the main block to serving the Women’s Market is lack of awareness among senior management of banks as to both its existence and its viability. Data on the business case and its widespread distribution is an important area to focus on.
It continues to be a pleasure for the Financial Alliance for Women to work with the Alliance for Financial Inclusion. We see great synergies between our peer learning network of financial services providers and their peer learning network of regulators. Click here for more information on the 11th Global Policy Forum.