Systemic change and women’s financial inclusion

Financial independence remains a challenge for women in every country.

This is a critical issue for all women who could find themselves in positions of vulnerability including widows, divorcees, survivors of domestic violence and abuse, and female-headed single-parent households. As captured by UN Women, women are more susceptible to risks both pre- and post-COVID-19:

Across the globe, women earn less, save less, hold less secure jobs, are more likely to be employed in the informal sector. They have less access to social protections and are the majority of single-parent households. Their capacity to absorb economic shocks is therefore less than that of men.

Gender inequality is embedded in our social structures. Globally, women are more likely to work in low-paid and casual jobs and are overrepresented in the services sector. Many women still give up financial control and leave long-term financial decisions to men. This will not change without gradual changes in social norms and gender biases. The World Bank explains:

Prevailing social norms did not allow for a complete overhaul of barriers to women’s financial inclusion, but rather incremental steps… Married women in France gained equal rights to work outside the home in 1965, become head of household in 1970, and administer property in 1985.

The financial inclusion community should rightly focus on women. However, without broader systemic change, it is unlikely that all women will become financially independent (if they wish). Financial services providers are unlikely to see the value in catering to needs of different groups of women. And governments are unlikely to prioritise policies which support women’s economic empowerment.

To support this change, we must address gender equality in a smart and sensitive way. It is difficult to call out male privilege and question traditional authority in any society. When we speak about women’s financial independence and financial inclusion, it is important for us to recognise the tension between cultural relativism (women’s rights are culturally dependent and no moral principles apply to all cultures) and universalism (women’s rights are universal and should apply to every woman). Change has to come from within.

As men occupy the majority of political and corporate leadership positions, this means that men must actively support women at every opportunity. This includes Ethiopia’s Prime Minister Abiy Ahmed who appointed female ministers to half of his cabinet posts. This includes Sierra Leone’s President Julius Maada Bio who announced measures to combat violence against women. And while not always in a direct way, this includes men working in central banks and other financial authorities who can lead by example and take authentic action.

What can financial authorities do?

• Consult with consumer groups and women’s organisations
• Collect and analyse sex-disaggregated supply-side data (i.e. regulatory reporting for financial services providers)
• Conduct demand-side research (e.g. surveys)
• Raise awareness through financial literacy and communications campaigns
• Provide training and job advancement opportunities for female colleagues
• Address any policy and regulatory barriers

What we’re reading:

UN Women – UN Secretary-General’s policy brief: The impact of COVID-19 on women

World Bank – Women’s Financial Inclusion and the Law

World Economic Forum – What the COVID-19 pandemic tells us about gender equality

Toronto Centre – Removing the Barriers to Women’s Financial Inclusion

CGAP – Social Norms and Women’s Financial Inclusion: The Role of Providers

UK Department for International Development (DFID) – Promoting women’s financial inclusion: A toolkit

Between the Lines Podcast – The Exclusionary Politics of Digital Financial Inclusion - Serena Natile