If technology is so great, why hasn’t it done more for women’s financial inclusion?

January 11, 2016

At Women’s World Banking’s Making Finance Work for Women Summit in Berlin last November, our Chief Product Development Officer Anna Gincherman was joined by Liz Kellison of the Bill and Melinda Gates Foundation, Louise Holden of MasterCard, Tom DeLuca of AMP Credit Technologies, and moderator Audrey Mothupi of SystemicLogic Group to discuss the potential for technology to drive women’s financial inclusion.

Why does technology matter for women’s financial inclusion?

Digital financial services[i] have tremendous potential to be a silver bullet for women’s financial inclusion, because they address so many key barriers for women such as convenience, confidentiality and security. Mobile phones are spreading rapidly in developing countries, with penetration now over 50 percent globally,[ii] making it more possible than ever before to serve women with digital financial services.

Two billion people, including over one billion women, do not have access to any formal financial services. Digital finance matters, because we cannot close this gap through traditional “brick-and-mortar” approaches. Liz highlighted the Gates Foundation’s work to “lay the rails” for digital financial services to flourish by developing an ecosystem including government involvement, private sector engagement, enabling regulations, and agreement on payment rules among key players. At the same time, she noted that it is critical to make sure women are included, because they are more likely to invest in health and education for their families, accelerating positive outcomes for the poor.

Carol Onijeachownam with BETA Friend (Diamond Bank, Nigeria)The promise of technology is in what it makes possible, such as breakthroughs in product design to meet women’s financial needs through different channels and with better products. For instance the BETA proposition, developed for women market traders in Nigeria by Diamond Bank and Women’s World Banking, delivers a saving service to clients’ doorsteps. Another example is AMP Credit Technologies’ innovative approach to lending to women-owned small and medium enterprises (SMEs): by analyzing information banks already have about their customers, the company breaks down traditional barriers and levels the playing field in access to credit.

If digital financial services are so important for women’s financial inclusion, why has more not been achieved?

One reason is that there are still real barriers to including women, in particular access to identification (ID). To open a digital account, take out a loan or register for an insurance policy, you need to be able to identify yourself, and women face more hurdles in proving their identity than men. There are numerous countries in the world where a woman still requires her husband’s permission or additional documentation to obtain formal ID.[iii] It is no coincidence that most innovations in women’s access to digital finance have taken hold in countries where national ID is readily available, like Kenya, or where regulators have simplified ID requirements for basic accounts, such as Nigeria.

The scale of the challenge is enormous, and addressing it requires sustained commitment from players with the resources to achieve real gains. Louise highlighted an example from MasterCard’s financial inclusion initiatives, which are part of the company’s strategy to onboard over 500 million new consumers by 2018. MasterCard has partnered with the South African government to offer a biometric national ID card, enabling payment of benefits from over 7 government social services programs through a single channel.

Another key barrier to reaching women with digital financial services is that most innovative product design fails to take their needs into account. Research by Women’s World Banking shows that the majority of players in digital financial services – whether mobile network operators or banks – were unaware of or unable to measure even how many women they were reaching, much less how women were using their products. Innovation in digital financial services has been delivered mainly by mobile network operators and as such has focused on payments solutions, rather than on other financial services that could be more relevant to low-income women (e.g., savings).

How Can Technology Drive Financial Inclusion for Women? (Making Finance Work for Women Summit, Germany, 11-12 November 2015) What role can institutions that focus on women play, especially microfinance institutions?

As Muna Sukhtian of Jordan’s Microfund for Women asked during the Q&A period, many microfinance institutions (MFIs) wonder whether digital finance will only hasten other types of providers’ access to their clients, and how to preserve the institution’s relationship with clients as it shifts to a digital environment. MFIs and other organizations that care about serving women must be at the table, bringing their focus on customers and understanding of the financial needs of low-income women. However, the panelists encouraged these institutions to focus on partnerships in order to leverage the capacity of different players in the ecosystem as well as their own strengths. By reaching out to other types of organizations with different competencies and scale, we can close the gender gap in financial inclusion together.

So is technology really a silver bullet for reaching women with financial services?

Our panelists agreed that technology itself is not the game changer, but rather the people and organizations who can put technology to use. Technology creates new opportunities to reach women and to serve them where they are: on their farms, in their businesses and in their homes. Yet making a difference means focusing on essentials like designing simple, accessible and useful products that are relevant to women. Ultimately it’s up to us to make it a priority to understand women’s needs and meet them.

To watch the full panel discussion, check out the video here.



[i] Financial service providers are using mobile phones and point-of-sale devices, together with mobile and fixed agents, to offer financial services at greater convenience and lower cost than traditional banking allows.

[ii] “The Mobile Economy 2015,” GSMA (2015), http://www.gsmamobileeconomy.com/GSMA_Global_Mobile_Economy_Report_2015.pdf

[iii] http://www.cgap.org/blog/banking-change-enabling-women%E2%80%99s-access-financial-services