Why Does Gender-Disaggregated Data Matter For Reaching Financial Equality?

The digital revolution and its unfinished business

Picture a world where every woman, no matter her roots or story, stands on equal financial ground with men. Sounds ideal, right? The truth is, we've still got miles to go for this to be a reality. Despite the dazzling strides of the digital era, some critical gaps remain when it comes to true gender financial equality.

Global data reveals that only 68% of the gender gap has been closed in 102 countries, a figure that echoes the statistics from 2020. Progress has been minimal, with just a 4% improvement since 2006, projecting a 131-year wait for parity. Accelerating this pace is crucial, as the mobile ownership and usage gender gap in low- and middle-income nations could unleash $230 billion by 2030.

Gender-disaggregated data is crucial for developing precise strategies to close the financial gender gap, ensuring the digital revolution benefits everyone equally.

The World Bank's 2022 findings reveal that only 14 countries out of 190 have gender equality under the law for critical financial and economic indicators. Alarmingly, 101 economies lack legal frameworks that prevent gender-based discrimination in credit access.

From data to policies: Success stories across countries

The number of countries sharing gender-specific financial data significantly increased from 35 to 83 by 2023, signalling a global commitment to enhancing Gender-Disaggregated Data (GDD). One notable initiative contributing to this momentum is the IMF's Gender Data Hub, which focuses on improving the collection and analysis of gender-focused data to inform policymaking. Similarly, the Alliance for Financial Inclusion is crucially promoting gender data availability nationally, aiding targeted strides toward financial equality.

Additionally, initiatives by the UN Secretary-General's Special Advocate for Inclusive Finance for Development (UNSGSA) and the United Nations-based Better Than Cash Alliance through its Reaching Financial Equality for Women report underscore the move towards gender-inclusive financial strategies.

Gender-specific data can be used to support women entrepreneurs and recognize their credit reliability, as we’ve seen from Rwanda's Women’s Guarantee Fund and Mexico's tailored capital requirements. Chile's Banco Estado introduced a woman-friendly banking solution, significantly increasing women's financial participation. Similarly, Uganda's financial inclusion strategy, informed by gender-disaggregated data, now prioritizes women, demonstrating a global shift towards gender-informed financial policies. In Mexico, lower non-performing loan rates among women prompted the National Banking and Securities Commission to reduce capital requirements for their loans.

The challenges of coordinating gender data initiatives

Most countries gather gender-disaggregated supply-side data directly from regulated financial institutions through mandatory regulatory reports, usually on an annual basis. Alternatives exist, however.  For example, India employs a statistical report approach for data collection, Bangladesh relies on annual surveys, and Peru acquires data indirectly via credit bureaus that receive reports from Financial Service Providers (FSPs).

A significant challenge for some central banks is the time-consuming process of data verification required by their regulatory frameworks, which necessitates banks to confirm or rectify data discrepancies. Common data quality pitfalls include varied standards by supervisory authorities, manual data handling, staff errors, and delayed or incomplete submissions. Beyond these initial challenges, there's a broader issue of effectively utilizing the data, as illustrated by Costa Rica, which long collected gender-disaggregated credit data without employing it for policy-making. Similarly, while countries like Brazil, Chile, Ghana, and Mexico have access to supply-side GDD (S-GDD), they do not always fully harness this data for market conduct supervision, missing out on opportunities to better support female clientele.

Three lessons learned in gender-disaggregated data utilization

So, in light of all this, we’re urging policymakers to consider a more strategic approach toward enhancing GDD collection and utilization. Establishing clear roles and responsibilities among FSPs, statistical agencies, and other stakeholders is crucial for creating a cohesive GDD ecosystem. While no universal set of proven good practices for collecting and using supply-side gender-disaggregated data (S-GDD) in the financial sector has been established, recent publications, such as the Consultative Group to Assist the Poor (CGAP's) report on S-GDD, offer valuable insights and guidelines. Policymakers and industry players can leverage these resources to enhance their data practices and advance financial inclusion effectively.  

Additionally, integrating insights from both the supply and demand sides will offer a more comprehensive understanding of the landscape, enriching the strategies of policymakers, financial institutions, and development organizations for promoting gender equality in the financial sector.

In emerging economies, rural women are particularly susceptible and vulnerable to issues of financial security and inclusion, making Bangladesh's Access to Information playbook a critical reference. By examining how these women manage their finances and the unique obstacles they face, we can gain essential insights that are applicable beyond their immediate context. Understanding the specific challenges and solutions in these rural settings can provide foundational knowledge for tackling gender gaps in financial access more universally.

As the 68th Commission on the Status of Women concludes emphasizing gender equality, the critical need for gender-specific data stands out. In this context, it's worth highlighting initiatives like the We-Finance Code, which underscores the importance of gender-disaggregated data as one of its three foundational pillars. By aligning with such frameworks, we can strengthen our collective efforts towards a future that is more equitable and inclusive. Here's to making GDD a powerhouse for change!