For those of us in the financial inclusion world, the release of the Global Findex is like the Olympics, the Oscars, and the World Cup all rolled into one. The data are compiled every three years, providing us with critical information that will guide business decisions, government policies and strategic choices until the next release. To give you a sense of the anticipation surrounding yesterday’s release of the 2017 data: the World Bank website crashed due to excessive demand for access to the database.
The Findex is such a rich resource that all of us at Women’s World Banking will be poring over it for weeks to come, but I wanted to share some initial thoughts on what we’re seeing:
What I’m excited about:
More women have an account.
The number of women who have a bank account has gone up 7% in 2014 to 65 percent. Some countries have made particularly strong progress, most notably India (increasing from 35% in 2011 to 80% in 2017). India has also made extraordinary progress on reducing the gender gap from nearly 20% in 2014 to 6% in 2017. Much of this improvement can be contributed to the government’s substantial investment in financial inclusion, including the revolutionary biometric identification system Aadhar. Other markets making significant progress in bringing women into the formal financial system include Ghana and Tajikistan. Add to that list, Indonesia, the Philippines, Mongolia and Argentina where more women than men now have an account.
Government payments lead the way.
The countries making the most progress toward financial inclusion are those that have invested in digitizing welfare payments and other financial transactions. The cost of providing financial services to many low-income people remains too high if digital payments are not an option. This report from the Better than Cash Alliance highlights the important links between digitizing government payments and financial inclusion.
Unfortunately, I found several issues of concern that need to be explored further:
The gender gap stubbornly persists.
Over the eight years that the Global Findex has been compiled, the gender gap in account ownership has not budged at all, remaining at 9% in developing economies. Despite the increase in overall number of accounts, we have not managed to address the systemic barriers women face in accessing financial products and services and driving towards gender parity.
Will technology leave women further behind?
With women ten percent less likely to own a mobile phone and 6 percent less likely to own a phone and have access to Internet (i.e., a proxy for Smartphone ownership), the benefits of the proliferation of digital financial services may not actually reach many low-income women. In Bangladesh, for instance, there is a 29% gender gap in account ownership and men are twice as likely as women to have both a mobile phone and access to the Internet. There is also a 5 percent gender gap amongst those respondents who have made or received a digital payment in the last year. Interestingly, even in the Philippines, where women are more likely to have an account than men, the share of account owners using digital payments is 9 percentage points higher among men than women.
Some markets are moving backwards.
The number of women in both Mexico and Nigeria with an account has decreased from the 2014 Findex, with the gender gap increasing as well. Women’s World Banking is in the process of conducting in-depth market intelligence in those two markets to gain a better understanding of the issues that are causing this downward trajectory.
Should we take a “women-centered design” approach to financial inclusion?
Twenty percent of account owners have made no deposit or withdrawal in the last year. Inactive accounts are a problem globally, but the number is particularly high in South Asia; in fact, India has the largest number of inactive accounts – at 48 percent. Women’s World Banking has recently started three projects in India where we will employ women-centered design techniques to avoid dormancies and increase the usage of financial products by women. We’ll be listening closely to women articulate their needs and then designing products and services to meet them. And, of course, sharing all that we learn!
The Global Findex gives us a rich set of data to measure our progress and identify where we need to re-double our efforts. At Women’s World Banking, this data will inform our work in the priority markets we’ve identified in our latest strategic plan – markets where, according to Findex, nearly 50% of the 1.7bn unbanked people live. Now that we’ve got the data, it’s time to get to work!