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Financial Inclusion Gender Gap ‘Pretty Startling’: World Bank Expert

We talk to Caren Grown, the World Bank’s senior director for gender, about why the financial inclusion gap between men and women hasn’t closed in 11 years, and what we might be able to do about it.

Written by Jihii Jolly, Megan Clement Published on Read time Approx. 6 minutes
The World Bank has found that in Kenya men are 18 percentage points more likely to have an account with a financial institution than women.Simon Maina/AFP/Getty Images

As senior director for gender at the World Bank, Caren Grown is the last person you’d expect to be taken aback by data about the financial gaps between men and women. But, she says, she was “really surprised” by the bank’s latest findings on financial inclusion, released in its Findex report this April, which showed that the gender gap in account ownership hasn’t budged for seven years, despite significant global efforts to close it.

In 2018, as in 2009 when the World Bank first began collecting data on the number of people worldwide with bank accounts, the gap between men and women is 7 percentage points wide: 72 percent of men have an account compared to 65 percent of women. In developing countries the gap is wider, at 9 percentage points.

This comes despite a great deal of investment in women’s financial inclusion programs, from India’s Pradhan Mantri Jan-Dhan Yojana scheme to efforts in sub-Saharan Africa to connect women to financial services using mobile technology.

Grown sat down with News Deeply to discuss why the financial inclusion gender gap is so persistent, what the World Bank is doing about it and how grassroots women’s organizations might be able to help.

Women’s Advancement Deeply: This year the World Bank found there has been no change in the gender gap when it comes to having a bank account. Why is it that we haven’t seen any progress?

Caren Grown: It surprised me because of the innovations we’ve seen, particularly with new technology, that have been really critical in terms of bringing more women into the financial space. Many more women have [mobile] technology and use it for transactions and payments.

The other type of innovation is that many governments are starting to digitize their payment platforms, so if you’re the recipient of a cash transfer from a government, many are setting up their systems so that you will receive that cash transfer electronically, which means you need to have a bank account or some kind of transaction account.

I would have thought that with these innovations that the gap would have shrunk.

Part of [the persistence of the gap] may be because somebody else in the household has an account, and women don’t perceive the need to open one up independently, but I don’t think I really believe that explanation. Another more likely explanation is … if you’re not in the labor force, there are fewer incentives to get an account and if you’re in an informal occupation, it may be harder for a number of reasons. There’s also research from GSM Association and other institutions that women have less access to ownership of technology, for instance, a smartphone, or even access to the internet.

Women’s Advancement Deeply: You have said that the World Bank is going to use this data to specifically target the closure of both the usage and access gap. Could you share a little bit more about how that’s going to happen or what’s next on your agenda based on this data?

Grown: This data gives us really important clues about where to focus our efforts. The World Bank has successfully completed a replenishment of our capital base and as part of our actions to expand our lending to middle-income countries, we will include lending activities to address the access gap but also the usage gap. One set of activities is to work with central banks to gather more disaggregated information on account holders in the financial system. We think that’s really important.

We also have a large initiative called the Women Entrepreneurs Finance Initiative, which works to help women start and grow small and medium enterprises. As we work with that particular segment of the population, there’s a range of tools that we can use to help women formalize their businesses, including interventions that help women connect to financial services along with business registration.

Ivanka Trump (center) was an early champion of the new Women Entrepreneurs Finance Initiative. (Patrik Stollarz/AFP/Getty Images)

“For some time, we’ve been working on these issues and bringing the data to our counterparts, whether it’s the banks or governments. I don’t know that they have really taken it to heart.”

We know a lot about how we can work with the financial sector itself in terms of moving toward branchless banking, which is important for women who have mobility constraints, doing more to help incentivize the spread of technology.

Another type of intervention we have started to do through the International Finance Corporation is working with financial sector institutions to reduce unconscious bias – the idea, for instance, that women are not a viable target market, which we know is not the case.

Women’s Advancement Deeply: It seems the work you’re describing has been happening for a long time, and yet it was still so surprising that this gap existed. Are there any interventions that you feel are particularly new or hold the most hope or have not been tried before?

Grown: One of the things I’m really interested in is how to accelerate progress. For some time, as you point out, we’ve been working on these issues and bringing the data to our counterparts, whether it’s the banks or governments. I don’t know that they have really taken it to heart. The gap hasn’t closed since 2009. It’s pretty startling.

I think there’s now a greater urgency in working to find out what works. One of the things we have learned is that access really matters. We know a lot about the kinds of things that I’ve talked about – mobile technology, government payment platforms, digital finance. But how do you get those women who have accounts to really use it? Using different kinds of platforms, whether it’s through our social protection platforms or licensing platforms for women entrepreneurs, making a bigger push on the literacy agenda.

I also think we need to understand more about some women’s concerns. We need to address in a more considered way how to use this new technology to help give them the confidence to use technology and the opportunities to use the technology. One of the areas we know less about is in social norms that we haven’t really addressed while we’ve taken this hardware-based approach.

Women’s Advancement Deeply: There are the partnerships that the World Bank can initiate and manage, but since the dataset is so rich and the findings are so broad, do you have any hopes for what others can do with it to play their part?

“Banks and the financial sector would do well to have more engagement with women’s organizations who can bring women together to more articulately express their needs and wants from the type of new technologies that hold promise.”

Grown: One of the things we’ve been thinking about is what the digital community could learn by putting a woman-centered lens at the heart of the work they do, so they don’t repeat the mistake of continuing to widen the financial access and use gaps that do exist. As digital finance platforms get up and running, understanding the differential needs and constraints that women have compared to men is something that they should really think about upfront in the creation of the platforms.

National governments could also improve other data collection efforts. The Findex is really important, but we need much more granular data, for policy purposes. So governments can initiate their own financial access surveys like the type of surveys that exist in several countries in Africa to collect more information on a wider array of financial products and services like insurance.

And civil society could be an important force for advocacy on closing the gender digital divide and the financial access gap.

Women’s Advancement Deeply: What is the role that civil society and advocates can play? What would get them invited to the room with some of the private sector stakeholders and the policymakers?

Grown: Banks and the financial sector would do well to have more engagement with women’s organizations who can bring women together to more articulately express their needs and wants from the type of new technologies that hold promise. Facilitating productive conversations there is really important.

Some of the work we’re doing is through women producer cooperatives. They do a lot of work to help women network, get connected with each other, share information in safe spaces. I think finding a broader range of organizations that are very close to women and their issues and their needs in the economic space is really important.

This conversation has been edited for length and clarity.

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