The gender gap in financial inclusion and the 2014 Global Findex

Tuesday, 21 April 2015 18:48 GMT

* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.

For women in developing countries, ownership of a bank account and access to digital payments can be game-changers.

 While gathering information with Gallup, Inc. in Kolkata, India, for the updated World Bank Group survey on financial inclusion, my colleagues and I met a woman named Arpita washing her clothes by hand in her front yard. It was last December, and she told us about recently opening a bank account.

“I had no account in my name before that,” she said. “I opened it for my convenience.”

 Arpita is one of tens of millions of women in developing countries who are taking control of their pocketbooks by opening accounts. Three years ago, more than half the world’s women struggled to save money, make payments, and access credit outside the formal financial system, according to the 2011 Global Findex database, the world’s only comprehensive gauge of global progress on what we call “financial inclusion.” The latest, 2014 version of the database shows that 58 percent of women now own an account. 

 Yet the news isn’t totally positive. True, account ownership has increased among women and men in every region, and the ranks of the unbanked have been slashed by one-fifth, to 2 billion, since 2011. But the gender gap remains where it was three years ago: Worldwide, men are still 7 percentage points more likely than women to own accounts.

 There are bright spots. The gender gap in high-income Organisation for Economic Co-operation and Development (OECD) economies is nonexistent. A few developing economies have sealed the space, including the Philippines, where women are now more likely than men to have accounts.

 Mobile money accounts accessed via cell phones can help. They often provide more convenient and affordable financial services. But the evidence in Sub-Saharan Africa—home to all 13 countries in the world where mobile-money account penetration is 10 percent or greater—is mixed. 

In Kenya and Cote d’Ivoire there is a significant gender disparity in ownership of accounts in financial institutions, but it vanishes among adults who only own mobile money accounts. In Kenya, women are more likely than men to have only a mobile account. But in Uganda and Tanzania, men are significantly more likely than women to make mobile payments from their mobile money accounts.

The 2014 Global Findex reveals several ways governments and businesses can help women get bank accounts and increase account use. Digitizing transfers is one method. Worldwide, 80 million women receive government social benefits or wages in cash.

 Agricultural payments have massive potential, too. In developing economies, 210 million women are paid for farm goods in cash. Moving these payments into accounts would benefit some of the world’s poorest women—and shield funds from the prying hands of dishonest relatives.

 Formalizing savings is another avenue. About 175 million unbanked adults in developing economies save through a savings club or a person outside the family. In Sub-Saharan Africa, transferring these assets into accounts could bring about 45 million women into the financial system.

There are also opportunities tied to how adults use their accounts. Almost 585 million women in developing economies pay utility bills in cash, and around 225 million pay school fees in cash—even though they have accounts. Digitizing these payments would improve security and save women long trips to pay tuition in person.

For women in developing countries, ownership of an account and access to digital payments can be game-changers. Such control over their budgets empowers women economically, giving them privacy, a safe place to keep money outside the home, and economic self-determination. Simply put, financial access enables women to invest their earnings in their health, children and communities—and thus protects development.


--Leora Klapper is Lead Economist in the Development Research Group at the World Bank