Understanding gender norms can accelerate women’s financial inclusion
Global Priorities & Context
International Women’s Day is over. And so is the mind-boggling media attention around the subject. However, the efforts to embrace equity require day-to-day attention and relentless efforts. Women’s journey towards equal power and equal rights has a long way to go, states a global report by UN. The COVID-19 pandemic has further exacerbated the situation. The impact of unpaid domestic and care work has increased for both women and men, nonetheless, a larger share of unpaid work falls on women. The participation of working-age women in the labor market is still below 50%, highlights the UN report. [1]
Women’s economic empowerment is one path that can lead to a better quality of life for women in every stratum of society. Over the past decade, financial inclusion has turned out to be a pivotal policy tool for advancing access to finance for women, however, usage and availability of affordable finance are still out of the reach of millions of women. Focusing on existing gender norms with cultural intelligence can shed light on the barriers that imperil the financial health of women in emerging markets and LDCs.
State of Women’s Financial Inclusion
The World Bank’s Global Findex 2021 reveals that despite global account ownership improving to 76%; the gender gap stands at 6% across developing economies in access to financial services. Another study reports while 250 million women in developing countries have achieved access to some form of financial services, there are nearly 742 million still excluded.[2] Women comprise 43% of the global agricultural force and make up the majority of the employment in the informal sector leaving them ‘invisible’ to the financial system and making it harder for them to access credit.[3] Today, there exists an unmet credit demand of $1.7 trillion among female-owned SMEs which if leveraged through appropriate financial tools can boost inclusive economic growth and improve women’s empowerment.[4]
This highlights a strong case for the market to serve women’s financial needs. Yet, FSPs fail to recognize them as a unique target segment having unique needs and a unique financial journey. Rarely you will find financial products designed specifically for women and marketed aggressively targeting them.
So, what are the lacunas affecting exigency at the policymakers’ and financial service providers’ levels? It requires an investigation of social norms and the ‘whys’ behind the pre-existing indifference and biases surrounding gender at the societal level.
Barriers to Gender-Inclusive Finance
Gender-related barriers operate at the individual, interpersonal, community, and broader socio-structural levels. Women continue to face nuanced barriers to financial access & usage due to sociocultural norms, gender-based power imbalances, and lack of bargaining in decision-making. Combined with the lack of financial literacy and inadequacy of relevant financial products, women become more vulnerable to shocks, which deprive them of financial safety nets, particularly in times of natural calamities and health crises.
On the demand side, understanding the cultural context in which women live, their behavior, habits, beliefs, and mindset is fundamental prior to taking up (digital) financial product design, process roll-out, and behavior change campaigns. On the supply side, there are multiple ways in which gender roles, norms, and relations influence resource allocation, decision-making, access, and outcomes of financial inclusion interventions for women.
Emerging Solutions to Gender Integration
FinValue's Social and Behaviour Change Communications work explores the association between gender norms and the financial health of women. Synthesizing learnings from our projects across geographies, we further shed light on policy evidence and product innovations, program successes, and challenges in moving from gender-blind policies & programming to being more intentionally gender-responsive.
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We have observed an understanding of how gender norms, roles, and cultural restrictions come into play in changing financial dynamics and affect global gender inequity. Our interactions with policymakers, regulators, and FSPs reveal that results-driven gender mainstreaming across the ecosystem requires dedicated gender expertise, scaled-up resources, and greater capacity for gender in terms of understanding among the staff, robust monitoring & evaluation systems, feeding of data insights into policy design & product development with a strong intent of ownership by all stakeholders at the policy and FSP levels.
There is a greater need to build upon the notion that gender-integrated approaches improve the quality of services and outcomes for all. We also observe the need to strengthen country-level implementers' capacity, commitment, and confidence to develop and implement strategies to address gender-related barriers to financial inclusion.
In one of our engagements with a climate finance program that aims to build the resilience of women farmers and women beneficiaries, we interacted with women farmers to identify challenges they faced and to gather their perspective on how program design, product delivery, and outreach mechanisms can be customized, keeping in view the underlying societal norms. The findings are being fed into the next phase of program implementation to ensure gender-focused interventions in product design & delivery, digital and financial literacy, customer awareness, and service quality.
In another project with an FSP to design a group-based savings and loan mechanism to help women build savings, enable access to finance for entrepreneurial or other needs, and build resilience, we followed the approach of keeping women at the center of product design. This helped identify challenges and opportunities for women to participate in financial services, taking into account their unique social context. These insights fed into the product and process design that is currently being piloted.
In one of our projects that aims to make digital lending accessible to women and women-owned MSMEs, we have identified women-specific challenges, assessed product design and efficacy of processes to effectively serve women, and reviewed communication as well as behavior change materials towards digital adoption. This led us to provide actionable advice, including how to: (i) strengthen women's trust in the digital finance space, (ii) mainstream gender in the marketing & communications and community engagement; (iii) involve men from the household to see the value proposition in investing in women; (iv) improve security factors affecting women's participation; and (v) continue to encourage FSPs to reward women entrepreneurs.
On the policy side, our work has focused on guiding policymakers about key gender considerations as they plan, design, implement, monitor, and evaluate gender-responsive policies for women’s financial inclusion. We recognize that national priorities and policy contexts differ across countries and regions. Hence, the roadmap for policymakers to start their gender-inclusive finance journey would involve identifying and implementing actions that are relevant or feasible in their contexts.
To know more about our work, reach out to the authors of this blog Bhavana Srivastava and Garima S. .