Why Women in Bangladesh Are Staying Away From Financial Services, and How to Win Them Over

October 29, 2018

Women in Bangladesh have the highest-ever rates of literacy and employment, and the country’s economy is growing. Financial inclusion now stands at more than 50 percent, nearly doubling in the past few years. But the financial inclusion gender gap is growing rapidly too, with fewer than half of women accessing or using formal financial services. Women’s World Banking’s strategy for Bangladesh addresses why women are getting left out of the country’s financial inclusion gains, and sets out ambitious, workable solutions to shrink the gender gap.

Bangladesh’s economy is on an upswing, and the world’s eighth most populous country reaps the rewards of financial inclusion and rising literacy. More than half the population now uses formal financial services, a big jump from 29 percent in 2014. The literacy rate of girls stands at 80 percent, more than double what it was in 1990—and outpacing the literacy rate of boys.

That’s the good news. Here’s the bad news: the financial inclusion gender gap is growing at an alarming rate, from nine percent in 2014 to 29 percent in 2017. Two-thirds of men have an account with a financial institution, but less than half of women do. And the vast majority of women who do have accounts use them less frequently than men.

At first glance, the financial inclusion gender gap in Bangladesh looks like a runaway train—but it can be stopped. Women in Bangladesh, increasingly literate, employed and employable, are poised for financial inclusion. The barriers that keep women from participating in Bangladesh’s wins are longstanding but fixable. And there’s an enormous upside to closing the gender gap: Women’s financial inclusion will build significantly stronger security for individuals and families, accelerating Bangladesh’s ongoing economic growth.

The Missing Link: The Right Strategy

Women in Bangladesh face many of the same obstacles to financial inclusion as they do elsewhere: gaps in financial literacy, low rates of mobile-phone ownership, and an absence of products created with women in mind, to name just a few. Women who do have an account with a financial institution, especially a mobile money one, do not always know why, how or where they can use it. Discovering and fixing those access and communication issues will be crucial in closing the financial inclusion gap.

Women’s World Banking’s financial inclusion strategy for Bangladesh will make accounts and financial products more accessible, intuitive and indispensable to women in Bangladesh. Working with its partner financial service providers, Women’s World Banking will leverage its financial inclusion expertise and thought leadership to identify targeted solutions and to ensure those solutions are effectively produced and marketed to engage women in Bangladesh.

The “Why” That Drives Women to Use Financial Services

Unbanked and underbanked women need a convincing reason to use financial services to meet their long-term and short-term goals, beyond cashing out government subsidies or their salaries. Women’s World Banking and its partners will conduct behavioral research with women across diverse segments of the economy, to tackle the first barrier to usage: the lack of compelling value propositions. The behavioral research will shed light on the financial needs women have that are currently unmet, and the types of financial products they would use if available.

Providers can then springboard from those findings to develop bundled financial products that do what they’re intended to do: reach women and convert them into active users. In cases when financial products already exist to fill the identified needs, Women’s World Banking will work with providers to position those products so women can access and use them.

There is already a giant missed opportunity in the estimated 15 million women in Bangladesh who are government to person (G2P) recipients, and the additional estimated 13 million women who receive remittances. The majority of those women are not using their accounts to save money or meet other financial goals. Women’s World Banking will work with institutions that deliver remittances, salaries, government transfers and microfinance loans to convert recipients into active clients, through value propositions that make sense to women.

The “How”: Creating Better Distribution Channels

ext 3 Finding out which financial products women need, then creating those products, will not make a dent in the financial inclusion gap unless women can access the products. Women’s World Banking will guide providers in eliminating barriers that keep women clients away—by strengthening the agent banking network, offering fully digital services that work for women, and identifying the channels that drive engagement.

Each distribution channel has its own potential challenges that need to be met. Agents need proper training so they can effectively serve women clients; and providers need to find a suitable business model for agents, including a competitive and fair compensation strategy.

Digital solutions such as mobile financial services (MFS) or payment cards at ATMs will not gain traction either unless women know how to use them: clients will need training, and providers must be ready to resolve other digital literacy gaps that come up.

Providers will also need to focus on building out their client networks to include more women. One way is to partner with microfinance institutions (MFIs), which already serve women and can expand the providers’ reach to a wider population of women in Bangladesh.

The “Where:” Usability Makes All the Difference

Even if providers develop tailored financial products and conquer the distribution challenges, a customer journey full of roadblocks will guarantee both clients and providers get nowhere. Figuring out ways to create user experiences that clients will want to return to is a crucial step.

Providers need to hire a team who can earn clients’ trust and build confidence. Simultaneously, elevating women to leadership positions within these financial institutions can also help achieve these goals. Easy-to-understand marketing documents are an important component of the trust-building process. For instance, the menu of options on mobile phones (USSD menus) must grab users’ attention with clear, intuitive language.

Other usability barriers will come to light during the behavioral research process, and providers must make it a priority to overcome those obstacles if they want women clients to become long-term customers.

Tracking Results

What will success look like? One measure is a growing number of providers that reach women clients, hire women, and promote them to management positions. Providers will need to hit ambitious financial inclusion goals, such as raising the number of average monthly transactions; reaching 10 percent of Bangladesh’s G2P and remittance recipients; and serving 10 percent of MFI customers and salaried workers in the readymade garment (RMG) industry. These goals are all achievable.

Recognition of Women’s World Banking as the leading voice on financial inclusion and women in Bangladesh will represent another measure of success for the organization. Women’s World Banking is primed to mobilize stakeholders and drive the strategy around financial inclusion, and to ensure those goals stay top-of-mind through an ongoing roster of conferences, events, workshops and publications.

The success of Women’s World Banking’s strategy will be evident in Bangladesh’s success, as the country expands its financial inclusion gains to close the gender gap and speeds up its journey to economic security and prosperity.