Policy Brief: How Policymakers Can Leverage Digital Financial Capability for Inclusion

April 23, 2024

In an increasingly digitalized world, policymakers and regulators hold a critical role in advancing digital financial inclusion, particularly for women. Recognizing the pivotal role of financial capability and digital literacy, policymakers are urged to prioritize the development of women’s digital financial capability (DFC) to foster the widespread adoption of digital financial services (DFS).

DFC serves as a crucial policy objective, guiding efforts to enhance financial literacy, customer awareness, and accessibility to DFS. Without adequate attention to DFC, the proliferation of digital finance risks perpetuating financial exclusion, particularly among vulnerable groups such as women. Thus, policymakers must understand the origins of DFC, which builds upon the foundations of financial literacy and digital literacy, recognizing that knowledge alone does not drive behavioral change.

Women, especially those from low-income or rural backgrounds, often face barriers to adopting DFS due to lower levels of digital literacy and financial skills. Gender biases in the financial sector further exacerbate this disparity, necessitating tailored DFC campaigns to address women’s specific needs and contexts effectively. These campaigns encompass topics relevant to women’s financial lives, such as entrepreneurship and savings for major life events.

Practical examples demonstrate successful approaches to building DFC among women. Initiatives in Indonesia and Bangladesh highlight partnerships between financial organizations and local communities to educate women entrepreneurs about microcredit and empower women garment factory workers to utilize mobile money accounts. These initiatives leverage peer ambassadors, visual aids, and relevant training materials to enhance women’s confidence and skills in using DFS.

To support DFC initiatives, policymakers should collaborate with stakeholders to identify critical moments when customers require DFC support and ensure coordination among various actors involved in capability-building efforts. Holding financial service providers accountable for embedding DFC principles in their products and services is essential for driving systemic change. By overseeing multi-stakeholder efforts, setting targets for FSPs, and redirecting resources towards tailored DFC interventions, policymakers can advance digital financial inclusion and empower women economically and socially on a broader scale.