“Unspoken cultural rules still control us”. This was one teenage girl’s assessment of why women are less financially included than men in Papua New Guinea.

Recent studies carried out by the Pacific Financial Inclusion Programme (PFIP) in Papua New Guinea (PNG) and Solomon Islands support her statement. PNG has the highest gender gap in financial inclusion in the region; women are 29% less likely to have access to formal financial services and that gap appears to be widening. In Solomon Islands, the gender gap in formal financial access is lower at 12%, but still much higher than the global average of 8.3%.

These studies were carried out as a part of the United Nations Capital Development Fund’s “PoWER” strategy (Participation of Women in the Economy Realized). This strategy seeks to understand country-specific financial inclusion issues that women and girls face, and in doing so, identify opportunities to create positive change.

While the level of financial inclusion varies between women in Solomon Islands and Papua New Guinea there are similarities in the reasons they experience exclusion. With this in mind, we draw on the report to examine five reasons women are financially excluded in Solomon Islands and PNG.

1. Women are less educated than men, which makes it harder for them to understand materials which promote and explain financial services

There is a gender gap in education levels which widens progressively in both countries. Our studies found that in both countries less emphasis was placed on the importance of women’s education. As a result, many more men than women can communicate easily in English in both countries. Marketing for financial services, policy documents, and customer service materials all tend to be written in English. Women, therefore, tend to be aware of basic financial services, such as savings, but have limited awareness of more advanced services such as loans and insurance.

The implications of this lack of knowledge can be seen in the financial choices that women make in both countries. 80% of women in PNG and 90% of women in Solomon Islands said they would not take out a loan in a given year, and the vast majority of those who do borrow from family, friends and moneylenders. Over 40% of the women in both countries save regularly but do so at home. It shows that women need financial services but stick to informal methods of saving and borrowing that they are familiar with.

2. Social expectations place an unequal burden on women

Women in both countries are more likely to be engaged in informal, vulnerable or unpaid work. This is influenced by lower levels of education for women combined with societal expectations about what kind of activities women should engage in.

In Solomon Islands, 80% of unpaid domestic care work is performed by women, and 81% of women carry out unpaid agricultural work in rural areas compared to 58% of men. In PNG some 85% of women are in vulnerable employment. This means they lack the means or need to become formally financially included. In Solomon Islands, 55.5% of women cite lack of money as a reason for not opening a bank account.

When women do earn money, they have little control over it. Men in both countries take the role of decision-maker in the household. This is particularly true in PNG where only 1% of women said that they were the main decision-maker at home. In Solomon Islands, 74% of respondents think that women should consult their husband before making financial decisions.

The lack of secure, regular income combined with the perception that money is “men’s business” means that women do not see a need for formal financial services even when they are able to access them.

3. Women are less able to access financial services through both physical and digital means

Women are disproportionately affected by the lack of nearby access points to financial services. Younger women are expected to stay close to home. Women with families have more duties around the home so have less time to travel to banks and agents.

This is an issue in both PNG and Solomon Islands, where a majority of the population live in rural areas. In Solomon Islands, women reported having to travel 4 or 5 hours to the nearest bank branch and one and a half hours to the nearest bank agent.

Digital financial services might offer a solution to this issue, but women are also at a disadvantage when it comes to digital access. While 50% of the population own a mobile phone in PNG, only 16% of women have one. Of the women surveyed who did own a phone, the majority had “button” phones and over half did not know how to send a text. With similar trends in Solomon Islands, it’s unsurprising that half of the women stated that they didn’t know what a mobile money agent was.

4. FSPs do not see women as viable customers

Some FSPs in Solomon Islands and PNG have a perception that women are not commercially viable customers. As a result, products aren’t designed to suit women’s needs and channels aren’t effective in reaching them.

Many banks in PNG charge account opening, maintenance and withdrawal fees. Women see their savings depleted by these charges without understanding why and begin to lose trust. As previously discussed, materials which promote and explain financial services are commonly written in English. Women, therefore, commonly get their information from friends and family. When they have negative experiences, like “losing” their money, they are quick to tell people. The FSPs are not currently engaging in community-level awareness and education campaigns to counter these negative viewpoints.

An extremely high proportion of women from both countries reported feeling uncomfortable while using financial services. The research suggested that this may stem from a feeling that staff are impatient. FSPs are losing out by not taking the time to educate their female customers; women reported abandoning products after sign-up due to a lack of understanding of how to use them.

The MiBank Hibiscus card in PNG illustrates how different products look when they are designed for women. The account offers high interest, targeted savings, and offers flexible loan repayment for irregular earners. Onboarding involves training on how to use the product and staff are trained to watch out for men using the card to ensure that women retain agency.

5. There is a lack of coordination between the different organizations working in this area

This is a particular issue because, as we can see from the reasons above, women’s financial exclusion is caused by intersecting inequalities. While there is a great work being done by different organizations, greater impact could be achieved through a more joined-up approach.

There are differing levels of attention paid to women’s financial inclusion at a state level. In Solomon Islands the Second National Financial Inclusion Strategy 2016–2020 includes a target of 150,000 women to become financially included by 2020. This target is addressed in a number of ways, including periodic meetings held by the Central Bank of Solomon Islands (CBSI) with working groups to address the gender gap, but the results are mixed due to changing attendance, lack of funding and inadequate follow-up. In PNG the government has likewise recently set targets relating to women’s financial inclusion. The 2016 National Financial Inclusion Strategy stated that 50% of all new accounts should be opened by women. However, there is little detail on how this is to be achieved.

While the governments of PNG and Solomon Islands are closing the gender gap in financial inclusion they are lacking a cohesive approach. This can be seen in policies that inadvertently create a barrier to financial inclusion, such as KYC requirements in PNG that ask for a letter from a community leader to open an account. Likewise, high taxes on FSPs and telecommunications companies translate to fees that are passed on to the customer.

The PoWER reports contain recommendations on how to address these issues so that women can be active financial services users who are fully economically empowered. Download them to find out more:

PoWER Assessment Solomon Islands
PoWER Assessment Papua New Guinea