Debating the Role of Financial Services in Closing the Gender Gap
Celebrating International Women’s Day with Action
FINCA was founded with a mission to alleviate poverty through market-based solutions. In the countries where we work, women and girls are the most vulnerable. For this reason, women’s empowerment underpins how we think about social performance and impact measurement, and guides our programmatic work.
On March 8th, the world celebrated International Women’s Day. For the third year in a row, FINCA hosted an event at its headquarters to commemorate the occasion. The event, however, was more than symbolic. It was an opportunity for those gathered to debate what action is needed to close the gender gap, and faster.
Andrée Simon, CEO of FINCA Impact Finance—a network of 20 community-based microfinance institutions and banks—moderated the panel discussion. Joining her were Diana Biggs, Head of Digital Innovation at HSBC Retail Banking and Wealth Management, Laura Foose, Executive Director at Social Performance Task Force, and Momina Aijazuddin, Global Head of Microfinance at International Finance Corporation (IFC).
How Fintech Can Help Achieve Gender Parity
“Two billion people don’t have access to financial services,” stated Andrée. “More than one billion of them are women. We know that if we invest in women, we see better health and economic impact.” With that opening remark, Andrée challenged her panelists to debate the role of digital technology in expanding women’s financial inclusion and achieving gender parity.
Diana was quick to point out that the shift to mobile technology has dramatically reshaped access to financial services. Momina concurred, adding that technology is clearly able to provide huge increases in gender parity. Laura took the dissenting view, cautioning that while advancements in digital technology can help, the barriers to complete equality are multifaceted. She went on to add that intentionality in approach is key. “Financial service providers must be intentional about their financial inclusion goals. This is particularly important when it comes to women,” said Laura. The group agreed that financial institutions must be deliberate in how financial technology (fintech) is used to help close the gender gap. Fintech alone will not suffice; products and services must be properly targeted and with client wellbeing at the center.
Challenges Give Way to Hope
The conversation shifted to some of the unique challenges faced by women, spurred by a comment from Laura. “Financial access is a key way the Social Performance Task Force measures goals and impact. But in a way, access creates greater stress for many women because they don’t have the opportunity to make financial decisions in their households.” The challenges of course begin long before the point of financial access. “Women face extra hurdles trying to grow their businesses and obtaining the funding necessary to scale,” mentioned Diana. These may include local customs, country laws—especially property-related—and patriarchal culture. Even when a poor woman does manage to get her business off the ground, taking the next step can be difficult. “Businesses that are challenging to scale are disproportionately owned by women,” said Andrée.
Despite the challenges, there is plenty of reason to maintain hope. “We know that businesses tend to perform better with more women on-board,” stated Diana. To reinforce this point, Momina and Andrée cited findings from a FINCA study on agency banking in the Democratic Republic of the Congo. The research indicated women banking agents were much more successful than their male counterparts at running their businesses. Moreover, we know that women tend to be better economic agents than men, investing in the wellbeing of their families and communities.
Meeting the Needs of Female Clients
This segued into a discussion on meeting the unique financial service needs of female clients. Additional research on banking agents pointed to the importance of social factors in utilizing this alternative channel. Women are often more comfortable visiting a banking agent than walking into a bank branch. “In order to effect women’s empowerment, it’s not just about the products. Having your staff be representative of the client base that you’re trying to serve is also important,” stated Laura.
If you’re adding value to your clients’ lives, then you’re adding value to your business. This is one of the reasons why fintech is so exciting.
Watch the recorded event below.