By Mary Ellen Iskenderian, President & CEO of Women’s World Banking
Covid-19 has laid bare the fault lines of inequality around the world, revealing stark discrepancies in the manner and extent to which people experience the effects of a global pandemic. In the United States this is brought into sharp relief by the admittedly limited state data, suggesting that people of color are disproportionately contracting the virus. It appears that not all negative consequences are equal, and for some, the impact could be catastrophic.
Without taking anything away from other groups, the stark truth remains that women are disproportionately impacted by global events like Covid-19. It is widely accepted that the pandemic could have devastating impacts in low- and middle-income countries, and inequality within these countries will intensify as a result. Women are a particularly vulnerable group across the board. While men are more likely to contract, and die from, the virus, it is women who continue to feel the longer term economic and societal consequences. More than a million women garment workers in Bangladesh have been sent home without pay as a Covid-related result of western retailers cancelling orders. Marie Stopes International has estimated that up to 9.5 million women worldwide could miss out on vital family planning and reproductive healthcare services. Countries around the world are facing a sharp surge in reported domestic violence against women as a result of the lockdown. This is even before we count the economic cost of millions of micro and small businesses shutting down, many of which are women-owned.
There are growing calls to ensure women’s rights and needs are central to responses to the pandemic. Entrenched gender inequalities leave women and men with different resources available to them to prepare for, cope with, and recover from a shock like this one. Short- and long-term responses must recognize and address gender differences in vulnerability and economic resilience, or else risk leaving women behind not just as a crisis unfolds, but also during the recovery, reinforcing gender inequalities in the long run.
Women’s World Banking has documented how gender inequality influences the economic effects of Covid-19 for financial services providers serving low-income women. The financial inclusion community has an important role to play in strengthening women’s resilience and ability to cope with the crisis. Here are five recommendations, based on our more than 40 years of experience in this sector, for how to equip women with tools from the financial sector to prepare for and mitigate the economic effects of Covid-19.
- Ensure women have equal access to technology: Before we can address the financial services gender gap, we have to lessen the technology gap. As Covid-19 spreads, rapid access to information could be a matter of life and death. However, on average women are 10 percent less likely to own a mobile phone and 26 percent less likely to have access to the internet on them. Women are 9 percentage points less likely to be literate. Lower rates of mobile and smartphone ownership, mobility constraints, limited access to education, and lower literacy levels mean that public health messages may not reach women as easily as men. This information inequality limits women’s ability to prepare for the virus and change their behavior to reduce risk of infection.
- Recommendation: Tap into women’s social networks and trusted messengers to help women understand and prepare for the virus and social distancing measures. Many financial service providers have close relationships with their clients, frontline staff, loan officers, group leaders, or savings group peers who are trusted sources of information and motivation. Some of our network members have started repurposing loan officers to provide women microfinance clients access to medical information, and the SEEP Network has compiled valuable guidance for how savings groups can continue to provide mutual support and convey critical information during social distancing.
- Increase women’s access to digital financial services: An outcome of closing the digital gap should be that more women have access to digital financial services, which will enable them to access funds, make deposits, and make payments without having to travel or physically interact with another person. Yet according to GSMA, there are 184 million fewer women who own mobile phones and 327 million fewer women who can access the internet through a phone than men. Many women borrow a family member’s phone when they need access. As a result, women lose out on the benefits of secure, private digital payments that eliminate the need for travel.
- Recommendation: Platforms should recognize that many women use shared phones, and provide options for multiple users or privately switching accounts. For women who own smartphones, advertise on social networks and provide peer referral bonuses to start to nudge women to use digital platforms. Onboarding women onto mobile-based e-commerce and payment platforms is still possible under conditions of limited mobility – and necessary to reduce the gender digital divide. Remote e-KYC allows users to open accounts without traveling to a bank branch by uploading a photo, their ID, and sometimes speaking to bank staff by video conference. Financial service providers or governments can facilitate this by subsidizing airtime for account registration, or increasing women agent banking networks, which have been proven to facilitate greater financial access for both men and women in remote areas.
- Lessen the impacts of the burden of unpaid care work on women: Women disproportionately shoulder unpaid work of caring for children, the elderly, and the sick. Even outside of pandemics, women are anywhere from two to ten times more likely to take on unpaid care work than men. This responsibility suppresses women’s own economic endeavors. When a husband or family member is sick, women often sacrifice paid work to provide care, leaving them especially vulnerable to contracting the virus and losing valuable work time. Covering the costs of an unforeseen health emergency is one of the most common reasons women give for having to liquidate or decapitalize their businesses, and can quickly deplete savings and push families into poverty. Furthermore, anticipation of these costs discourage women from seeking medical attention for their own health issues.
- Recommendation: Support for childcare, sick leave, and a robust health system are key, and the financial sector can complement these protections with accessible microinsurance offerings tailored to women. Since 2010, Women’s World Banking has supported over 1,000,000 women in Jordan, Egypt, Morocco, and Uganda in accessing micro-insurance to supplement lost income from health emergencies for women and their spouses. Unique among microinsurance, clients receive reimbursement directly, and benefits can be used to cover direct and indirect expenses associated with hospitalization. The product encourages women to prioritize their health and seek medical care with reduced concern about the financial consequences.
- Enable full functionality of government-to-person (G2P) accounts for financial health: With economy-wide shutdowns becoming the new normal, social assistance programs are responding urgently to provide immediate economic relief and allow people to stay at home to reduce transmission. About 100 million people around the world receive a government payment, with most of these social support payments going to women. Many women have bank accounts thanks to G2P programs. However, it is common that G2P recipients only know how to use these accounts for cash withdrawal. Some do not even know they have these account and that funds are being deposited.
- Recommendation: While many G2P programs already target women, now more than ever digitized G2P programs should enable multiple functionalities of bank accounts to meet women’s different financial needs. In addition to withdrawing cash, G2P accounts should allow users to send and receive transfers to family members; make digital payments for utilities; and even receive payments for goods and services sold online. G2P programs should leverage existing training infrastructure to ensure awareness of these functionalities.
- Invest in collecting sex-disaggregated data and improving data quality to inform policies and products: While we can anticipate potential gender differences in the pandemic’s economic implications, we do not know yet the full extent of these impacts. These efforts are critical to help prepare for the next crisis by collecting, analyzing, and presenting data disaggregated by gender and other socioeconomic characteristics. While in-person primary data collection efforts are for now on hold due to social distancing, remote options hold promise.
- Recommendation: Continued investment is needed in individual-level datasets for evidence-based policymaking for financial inclusion. First, public and private sector data initiatives need to record gender along with other demographic data (education, ethnicity, income, employment, occupational sector, location, marital status, and so on) to be able to analyze how women are affected differently than men, and to identify important differences among women. This level of detail is valuable for financial service providers seeking to understand unmet needs of new customer segments. Second, datasets should go beyond access questions and collect data on ownership of accounts, mobile phones, and businesses. Ownership data, even if self-reported, helps us discern the extent of women’s privacy and control over these tools. Third, because many women own accounts through G2P programs, the type of account needs to be documented to assess the quality and functionality of the account. Finally, wherever possible, there are many widely used and validated measures of financial control and autonomy, which should be included to improve our ability to examine the relationship between financial inclusion and women’s empowerment.
Resilience is defined as the capacity to recover quickly and fully from a shock. For women who experience low autonomy, low income, domestic violence, and sporadic employment, recovering quickly will require much more effort than it will for other groups. Much of a woman’s resilience can be traced back to her financial autonomy. If a woman has financial agency, access to savings, insurance, collateral, and can make decisions on behalf of herself and her family, resilience will be easier to achieve.
The question I keep returning to is this – why does it take something as shocking and damaging as Covid-19 to highlight inequality? As the world struggles to contain and control the outbreak, we have to confront the simple truth – that our ability to manage these types of events would be so much greater if the world was fairer. As Megan O’Donnell writes for the Center for Global Development, long-term work dismantling structural inequalities is the only way to radically decrease the extent of harm caused by crisis, especially for vulnerable populations.
We know that peace agreements are more lasting when women are involved in their negotiation, allowing their countries to better recover from the devastation of war. Likewise, resilience following the war against Covid-19 will only be possible if women have a seat at the table. Ensuring women’s access to financial services will be an essential first step in coping with the crisis and building a more equal world.