We Have All the Data We Need on Women’s Financial Inclusion. Why Isn’t Anyone Using It?
When I first started working on women’s financial inclusion, it seemed as if I always received the same answer to every question I asked about why women weren’t being served: “we just don’t have enough data.” Whether it was a global corporation, a government minister, a fintech or a foundation – whenever I tried to advocate for greater financial access for women, I was always told that “we don’t know enough” about women’s habits and preferences to make meaningful policy changes or create new products.
Well-intentioned or not, all these leaders (who were mostly men) lacked the “sex-disaggregated” data they needed in order to address the needs of this underserved market. If they could just find out how many women owned smartphones, or the repayment rates of male versus female entrepreneurs, then they would be able to offer commercially viable products that meet the needs of this lucrative, untapped market.
Today, the global community can take a victory lap. After significant investments by private sector donors, research organizations, NGOs, and multilateral development banks, we have made huge strides in collecting and reporting financial data on women. In 2022 alone, multiple studies gave us extensive data about women’s financial inclusion, from the World Economic Forum’s Global Gender Gap study and the World Bank’s Global Findex to the GSMA's Mobile Gender Gap Report. Each of these studies is a window into the opportunities and gaps for women: how far we have to go, and how much financial service providers can gain by creating opportunities and products for women.
Data talks: The global gender gap picture
So, with all this data now in hand, why aren’t more financial institutions clamoring to be “providers of choice” for women?
Part of the answer lies in the story told by the data.
The most recent WEF Global Gender Gap study reflected a sobering macro-picture for women, reporting that global gender parity for labor force participation had been slowly declining since 2009 and has reached the “lowest level registered since the index was first compiled.” Digging deeper, the study showed clear and alarming trends by gender, with women falling short in metrics like pay equity, career progression, and financial literacy.
Last year’s Global Findex, the tri-annual barometer of progress in financial inclusion, had comparatively brighter news. Government COVID-19 relief payments and the growing digitization of financial services have driven greater financial inclusion across the board. In fact, the stubborn 9% gender gap between men and women’s access to financial services had shrunk for the first time in decades to 6%.
But a closer look at the global gender gap reveals a different picture. While the global gap between men’s and women’s inclusion narrowed, many regions, especially Sub-Saharan Africa, the Middle East, and North Africa, reported 12 and 13 percentage point gender gaps – twice as large as the developing economy average. In India, progress towards closing the gender gap resulted equally from men closing their bank accounts as from women acquiring accounts. At the current rate of progress, it will take more than 100 years to fully close the gender gap.
As disheartening as these numbers are, there is additional data that shows how much there is to be gained by investing in women and prioritizing women’s economic inclusion.
A landmark 2019 study from the international management consulting firm Oliver Wyman showed that if the financial services industry did nothing but include women at the same rate as men, they would unlock some US$700 billion in revenue yearly from deposits, insurance premiums, loans, and other services. That’s billion, with a b.
How can a possible $700 billion windfall not be compelling? With the business case for financially empowering women clearer than ever, why does this continue to be a side conversation instead of a global game changer?
Banks routinely ignore valuable information about women’s uses and preferences for financial services. A 2018 study of 110 banks across 19 Latin American countries indicated that only 14% of the banks surveyed disaggregated the data in their credit portfolios by sex. Worse still, only six of the banks that did separate their credit data in this way used the information in their managerial decision-making.
Using data to advance women’s financial inclusion
By collecting – and most importantly using – their own data and the information collected by third parties like the Findex and the GSMA, businesses and financial service providers have the opportunity to design products with women in mind. Even if we leave aside the burgeoning market for wealth management and insurance products and focus solely on enterprise credit, we see that 80% of women entrepreneurs have unserved or underserved credit needs, creating a $1.7 trillion financing gap. And traditional banks are not the only ones who stand to benefit from a closer look at their data. Fintechs are uniquely positioned to help close the digital financial services gap because they have access to a broader range of data than banks and more traditional providers and can efficiently and cost effectively meet the needs of low-income women.
Likewise, regulators and policymakers can harness this third party data, as well as gender-disaggregated supply-side data collected from the financial service providers they supervise, to enact policies that further women’s financial inclusion. As a 2020 report from the UN Secretary-General’s Special Advocate for Inclusive Finance for Development amply demonstrates, countries can make profound policy changes and create powerful incentives for financial service providers once they understand the disparities and barriers in women’s access to finance.
These are all compelling arguments for addressing the women’s market – and are all backed by data. So never let anyone tell you we don’t have the data to support women’s economic empowerment: it’s all there in black and white. It’s time we put those numbers to work for women.
Mary Ellen Iskenderian is President and CEO of Women’s World Banking
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Perhaps if we more proactively addressed discrimination and the euphemistic "gender norms" head on we could make more progress. Aren't these gaps very often intentional rather than the result of inadequate data or flawed marketing strategies? Gender gaps might diminish more quickly if policymakers enacted and enforced laws prohibiting discrimination against women (and anyone else for that matter) across all aspects of their lives and livelihoods, including education, employment, and access to financial services.
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