The gender gap in financial inclusion won’t budge. Here are three ways to shrink it


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Marie Hortense Raharimalala visiting a bank agent in Antananarivo, Madagascar. A biometric fingerprint is used for identification. © Nyani Quarmyne/International Finance Corporation
Marie Hortense Raharimalala visiting a bank agent in Antananarivo, Madagascar. A biometric fingerprint is used for identification. © Nyani Quarmyne/International Finance Corporation

I opened my first bank account as a new student at the London School of Economics in 1987. This seemingly small act meant that I could manage my own finances, spend my own money, and make my own financial decisions. It meant freedom to decide for myself.

That financial freedom is still elusive to 980 million women around the world. And, worryingly, this does not seem to be improving. Our Global Findex database shows that while more and more women are opening bank accounts, a global gender gap of 7 percentage points still exists—and it has not moved since 2011.  

There are some bright spots. In Bolivia, Cambodia, the Russian Federation, and South Africa, for example, account ownership is equal for men and women. And in Argentina, Indonesia, and the Philippines, the gap we see at the global level is reversed—women have more accounts than men. 

But there are also some very troubling, and persistent gaps. The same countries that had gender gaps in 2011 generally have them today. In Bangladesh, Pakistan, and Turkey, the gap in account ownership between men and women is almost 30 percentage points. Morocco, Mozambique, Peru, Rwanda, and Zambia also have double-digit differences between men and women.

One of the main reasons that both men and women cite for not having a financial account is that they simply are not earning enough to open one.  We need to make sure that everyone has the opportunity to work, earn, and participate in his or her economy. This is at the core of our work at the World Bank Group, especially as we look at the skills people will need for the jobs of the future.

But there are some reasons that keep women specifically from opening accounts. The gender gap in financial inclusion can be traced back step by step through unequal opportunities, laws, and regulations that put an extra barrier on women’s ability to even open that simple bank account. 

Countries have to do better in unraveling the complicated web that women face when they try to do something that for a man, is quite simple. How can we level it up? Let me suggest three things as a start: 

Do more with technology and mobile banking

Moving routine cash transactions into financial accounts could shrink the number of unbanked women.  We have seen this work in both Europe and Central Asia, and the Middle East and North Africa, where 1 in 5 women who have an account opened their first account to receive digital transfers of public sector wages, government social benefits, or public pensions. In Latin America and the Caribbean, the share is 14 percent.
At the same time, programs like M-PESA, the groundbreaking mobile money transfer service in Kenya, have demonstrated the power of mobile banking. Drive through even the most rural area in the country, and you’ll see a mobile banking kiosk. This is a game-changer for rural poor who have generally had scarce access to financial institutions, and for whom the trip to the nearest bank has too high a cost in terms of travel or lost time at work. Recent research shows that because of M-PESA, around 185,000 women in Kenya moved from subsistence farming to business or retail sales, and their savings went up as a result. As mobile phone ownership grows, this may be a way to jump past the traditional ways to access a financial institution and bring access to people where they are. 

Remove discriminatory laws

There are only three countries remaining where married women need permission to open a bank account. This is progress, and yet this is also three too many.

But there are other laws that might seem indirectly linked to financial inclusion, that can have a huge impact. In 31 countries, married women cannot choose where to live in the same way that their husbands can.  This can make it harder for them to travel to a bank or to take a job and earn money for the family.

Laws that put limits on women’s economic participation also curb their access to and use of financial services. In economies where women can be head of household, and where married women are permitted to work, women are more likely to have accounts, credit, or savings. 

Even in places where women face often insurmountable odds, it is possible to change the laws that hold them back. In the Democratic Republic of the Congo—a country that performs at the bottom in nearly all aspects of gender equality—the World Bank Group worked with the ministries of Gender and Justice to change the country’s family law, which previously prevented married women from opening bank accounts, obtaining loans, signing contracts, or registering companies without the permission of their husbands. This led to the adoption of a new Family Code in 2016 that lifted these restrictions. 

Focus on financial capability

Boosting financial literacy among girls and women means not just improving their reading and writing skills, but also teaching them how to use a transaction account, how to manage and budget money, and how to save.  At the same time, the social, emotional and psychological aspects of financial decision-making can be just as important as basic technical skills.

Technology applications can help customers through immediate and timely feedback. Two promising approaches to financial capability that leverage technology include using text messages and embedding information in entertainment shows.  Text messages that remind people of their savings goals might help increase savings, as research in Bolivia, Peru and the Philippines has shown. In South Africa, a World Bank project worked with a popular soap opera to include financial messages in the storyline, helping to shift attitudes toward gambling and high cost retail credit.
These are just three of the many levers that will need to be pulled if women are to catch up to men in financial inclusion, and the World Bank is using all the tools at its disposal to provide support. What else can be done? Share your comments below. 
Srei Chanda
May 24, 2018

Increase interest rate and more benefit for a loan to the women can bolster financial inclusion of women. House loan and loan to start a small scale work can be helpful in that regard. Home service option for opening a bank account can be a time and money saver to commute.

Mogas Canhe
May 25, 2018

Good analysis. Indeed the trident consisting of expanded use of mobile banking, laws reform and financial capabilities are seen as magic bullet for more inclusion of women in the financial arena. I think Countries need to start thinking about bringing financial literacy education in schools curricula to teach young generation how to use their Money wisely. Im a practitioner of Village Savings and Loans Associations (VSLA) for the last 14 years and I see this as good platform for providing knowledge about financial concepts because people are dealing with real Money in these groups. In Mozambique the VSLA methodology should be institutionalised because it is very useful mainly if we come for the rural settings. Im working to bring financial literacy lessons adapted for children and young people, starting from home.

Chandran Sankaranarayanan
May 25, 2018

More of technology and getting rid of discriminatory laws would do a world of good in minimizing gender gap.

Daksha Vaja
May 25, 2018

However, in non-English speaking we need also to boost English literacy so that the technology could be used to the fullest in addition to financial literacy. I also have come across many women folks who require help fulling their banking needs as they are often scare of going to the banks, leave aside opening accounts.

Chrispine Mukuka Mwamba
May 26, 2018

Its true the gap in financial inclusion and bank account ownership in Zambia is real and is seen during the marketing of crops after the rain season (April to September). Some buying companies demand that each client is paid through Banks as a secure way to empower women folk. Few manage to open Bank accounts due to various reasons that include illiteracy (not able to read and write).

Anna Kele
May 26, 2018

It is great feeling to have financial independece ! At the same time it should be clear for everybody that this kind of independence means a higher responsibily. To have your own money is an advantage and spending money seems to be an easy task but it is not the case. When you have got your own credit cards you do not always feel the financial load and the responsibility (training is necessary). Therefore I would advise the use of the debit cards as a first step as a training period.

May 27, 2018

Very interesting

Tanwir Ahmad
May 28, 2018

These are the three most useful interventions to improve women access to manage and control their finances and the research around the world is showing that these are contributing towards women's financial inclusions and women empowerment.
Encouraging and engaging women and girls in employment in public sector can also greatly help them in their financial stability and financial inclusion. One of the example is deployment of Lady Health Workers (LHWs) in public health programs in Pakistan. Presently around 100,000 LHWs are contributing by improving child vaccination, motivating pregnant women for Ante Natal Care and skilled birth attendance at public sector health institutions and providing family planning and reproductive health services in rural and marginalized populations.
At the same time it has contributed in women empowerment and has given them confidence and liberty to open their bank accounts and manage their finances.

Julius Caesar Dushime
May 28, 2018

Thank you so much.These are great strategies of improving gender equality especially in developing countries. I believe the National Social Security Organizations should take advantage of these strategies once they're implemented to improve the saving culture in the respective countries for longer financial benefits.
I'm also seeing e-governance as a great opportunity of improving gender equality especially in as far as financial is concerned.

May 28, 2018

I have seen MPesa provide convenience that banks can't provide, yet. I believe those impressive Kenyan stats. The only thing missing is a mindfulness about the cost of each transaction. Awareness, for example that topping up phone credit daily is more expensive than weekly. I love the idea of setting your finacial goals on your phone and you are reminded of your level of goal achievement, regularly.

Yumiko Kokuryu
August 09, 2018

If there are gender differences in financial literacy from birth, female need to be educated improve their financial literacy, I think.

Amit Bajaj
August 10, 2018

Prevelance of law is also required..As even policies and laws made to favour the underpriviliged..the lack of enforcement is a big hindrance..