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Applying a Gender Lens to Digital Remittances

Insights from UNCDF’s research on how digital remittance services can advance women’s financial inclusion and health
Two women conducting a financial transaction in a shop surrounded by colorful fabrics

Digital remittances can form a gateway to better financial health and inclusion for migrants and their families. Yet one key factor influencing remittance behavior is often overlooked: gender. Recent demand side research by the United Nations Capital Development Fund (UNCDF) revealed clear patterns in access, usage and resilience for migrant women and women recipients.

UNCDF conducted roughly 3,000 phone surveys, 100 interviews and four focus group discussions with remittance sending and receiving customers of six remittance service providers: BRAC Bank in Bangladesh, Wizall Money in Senegal, RAKBANK in the United Arab Emirates, IME Pay in Nepal, Lion Bank in Ethiopia and Sentbe in South Korea. Our top three takeaways were the following.

1. Age and education are the primary factors determining a woman’s choice of remittance channel.

Among women who use digital channels to send or receive remittances, 89 percent of migrant women and 57 percent of women recipients have at least a secondary education, compared to only 28 percent of women who receive remittances via cash channels. Younger women are also more likely to adopt digital channels: 71 percent of women who use digital channels to send or receive remittances were under 35 years old, compared to 56 percent of female cash customers in the same age group.

Bar chart showing the education level of remittance customers by sending and receiving channel

Circle chart showing the age groups of remittance customers by sending and receiving channel

While women face many barriers when accessing digital remittances - including adverse social norms, inefficient customer service and inadequate consumer protection policies - the preference for digital remittance channels by younger and more highly educated women may offer some insights into why these services have yet to reach the majority of women at the last mile.

2. Digital remittances could play a role in unlocking broader financial inclusion for women.

41 percent of female digital remittance senders and 38 percent of female digital remittance recipients said their use of other financial services increased after using digital remittances. This compared to 21 percent of female cash recipients. 

For digital remittance senders, the most widely used financial services are savings accounts, credit cards, mobile wallets and bank/microfinance loans. For digital remittance recipients, the most widely used financial services are savings accounts, mobile wallets and current accounts.

Digital remittances could therefore serve as a potential onramp to using a broader suite of financial services, including resilience-building financial services such as savings, credit, insurance and pensions. Twitter logo

Three bar charts showing the financial services used by remittance customers by sending and receiving channel

3. Digital remittance users reported overall higher levels of financial health compared to cash users.

As we saw in our previous blog post, financial health focuses on four key aspects of one’s financial life: security, resilience, control and freedom. Our study found that digital remittance users generally reported higher levels of financial security, control and resilience than cash users, but similar levels of financial freedom.

It is important to note that these findings do not indicate that digital remittances are the cause of improved financial health, but they are associated with it, as are many other factors such as education, income and employment levels.

Security: Women who use digital remittances indicate feeling more financially secure compared to cash users: 75 percent of migrant women using digital channels report having money left over at the end of the month after paying for living expenses. Among female recipients, 65 percent of digital users have surplus funds, compared to 54 percent of those who receive cash.

Resilience: While the channel used did not make a big difference for female remittance users’ ability to come up with emergency funds, more women using digital remittances felt their resilience improved since they started using digital remittance services. 62 percent of migrant women and 57 percent of female recipients who use digital remittances said they were better able to weather a financial emergency, compared to 49 percent of cash receivers. These statistics suggest linking remittances to other financial services like savings accounts can give women a safe and convenient way to save for emergencies. Twitter logo

Control: 72 percent of women receiving remittances in cash said that they worry about covering basic living expenses, compared to only 51 percent of migrant women and 52 percent of recipient women who use digital channels.

Freedom: For both digital and cash remittances, a similar share of users believed that remittances improved their financial lives by helping them to meet their financial goals and pursue opportunities. 81 percent of female digital remittance senders, 85 percent of female digital remittance recipients and 83 percent of female cash recipients, all held this view. It is clear that remittances are broadly seen as a critical income source for both senders and receivers, regardless of transmission channel.

Applying a gender lens

Our research makes a strong case for applying a gender lens when designing digital remittance services. Twitter logo For example, since most women using digital remittance services are younger and more educated, remittance service providers should ensure that their services account for users’ literacy levels and consider integrating digital and financial literacy trainings into their product offerings.

Linking digital remittance services to other financial services that women want and need, particularly savings, could also bring about broader financial inclusion for women. And there is an opportunity to delve deeper into understanding exactly how and why digital remittances can contribute to improving women’s financial health.

UNCDF is committed to continuing its support – to both the public and private sector – to understand and account for the gendered patterns in remittances, and to develop remittance policies and innovation for the ultimate benefit of migrant women and their beneficiaries.

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