Background

Financial inclusion is one of the key interests of researchers, policy makers, and practitioners as a result of its influence on economic development and poverty reduction in Bangladesh. InterMedia’s Financial Inclusion (FII) 2016 Bangladesh Annual Report demonstrates a steady shift towards DFS and a positive pace towards mobile money adoption over a brief period. Bangladesh is in a cusp of a steady growth of mobile money usage and is gaining momentum in terms of access to a formal financial services account which rose from 20% to 30% between 2013 to 2016.

However, within this period, the gender gap has also widened from 3% to 10% points between men and women (Dalberg).

Women are significantly lagging behind in terms of mobile money usage. This is affecting both greater financial inclusion and women’s economic empowerment limiting their agency, control over resources and enhancement of economic opportunities. To understand the gender gap in financial inclusion and to expand women’s overall level of access- the United Nations Capital Development Fund (UNCDF) has assessed financial access and agency issues of women and girls across Africa and Asia.

Gender Constraints

In Bangladesh, 27% of women have used or had access to mobile money in comparison to 53% of men (Intermedia Wave 4 Report FII Tracker Survey). This indicates a considerable gender gap suggesting that women have fewer chances of becoming customers than men. Ownership of a mobile phone plays an important role when it comes to reducing the gender gap as it triples the probability of a woman being a mobile money user (CGAP). According to Intermedia data, 47% of Bangladeshi women own a mobile phone in contrast to 76% of men. New products and technology such as accessible and reasonable mobile banking services, specifically for impoverished women can be introduced as an effort to close the gender gap in financial inclusion.

In an effort to explore these issues further, the UNCDF hosted a workshop “Financial Services and access and Agency for Women and Girls” to discuss how the financial access and agency issues of women and girls’ affect their economic empowerment. The participants identified 9 key constraints facing women:

Demand

1. Limited Financial and digital literacy: Even after obtaining training women express low confidence in capabilities of digital literacy, thus holding a weaker position than that of men.
2. Family responsibilities and lack of affordable childcare solutions contribute to time poverty: 60% of female labour work as unpaid labour on an average of 10 hours per day in Bangladesh compared 10% of male labour. This restricts women from opportunities of accessing formal financial institutions.
3. Lack of confidence/risk aversion can inhibit use of financial products: Women’s lack of confidence stems from patriarchal social norms.

Supply

1. FSPs lack awareness of the ‘women’s market’ and biased/prejudiced attitudes of FSP staff can add to the perceptions of women that banks are not for them.
2. Physical financial service access points and agent network are limited/inappropriate and do not cater to time and mobility constraints.
3. Marketing is not targeted to women and girls.

Enabling Environment

1. There exists no gender strategy that deals with financial inclusion: Bangladesh’s 7^th Five Year Plan (2016-2020) targets to increase economic benefits for women through better access to financial services. However, objectives to boost women’s non-agricultural employment have not been updated from the previous plan due to failures to meet previous targets.
2. Product/ delivery regulation constrains private sector innovation e.g. agent banking, mobile financial services, collateral requirements.
3. KYC regulations place a heavy burden on opening and managing an account for women and girls.

PoWER Strategy

Recognizing that the financial exclusion of women needs to be addressed, UNCDF developed “Participation of Women in the Economy Realized” (PoWER) strategy. The goal is to improve women and girls’ awareness of, access to, use of and control over financial products and services responsibly provided by diverse and sustainable service providers in a well-regulated environment.

PoWER focuses on addressing financial access and agency constraints facing women examining these through an empowerment framework that categorises three key spheres of influence that affect women and girls’ financial inclusion: supply, demand; the enabling policy and regulatory environment; and the mediating by socio-cultural context, or gender norms.

PoWER make several key recommendations:

Supply

1. Innovation funding should be offered to mobile money providers to develop gender sensitivity among agent banking and mobile money (MM) providers.
2. Secured transactions for women must be instigated, eg. By modifying specific personal details that are disclosed to MM and agent banking providers.
3. Research and dissemination of context-specific business cases should be advocated for tailored products (savings, credit, insurance and wage payments) to women and girls’ needs.
4. FSPs, MM providers and insurance providers should be offered innovation funding to collect and use sex-disaggregated data to understand customer journeys and to pilot tailored products for women along with non-financial services to support women’s use of non-MFI products.
5. Partnerships should be built between MFIs and MM providers and should be offered innovation funding to pilot the digitization of MFI transactions, using established MFIs with large female customer bases.
6. Partnerships should be facilitated among MFIs and retail banks and offered innovation funding to operate pilots to support women’s MSME owners’ graduation from the former to the latter through tiered KYC requirements that recognize the informality of women’s businesses.

Enabling Environment

1. Bangladesh Bank should effectively monitor and enforce the execution of existing gender-sensitive policy concessions.
2. The central bank should be supported to implement a gender sensitive and women targeted approach in its national financial inclusion strategy and deliver on its commitments.
3. Government with non-government stakeholders should work together in bridging information gaps on the realities of women’s financial inclusion.
4. Civil society organizations should be partnered with to build “the business case for communities” to engage men, boys & local communities on the importance & value of women’s financial inclusion.
5. Capacity building of CSOs should be strengthened in order to raise awareness of the negative effects of child marriage.

Demand

1. MM providers, civil society and factory owners should be offered innovation fund to incorporate key payments with literacy training and connect these to savings plans as an entry point to enhance women’s digital financial inclusion.
2. Capacity of women MSME should be built by developing partnerships with civil society organisations. Advocacy to FSPs on alternative account opening/documentation requirements building on existing efforts of women’s business chambers should be conducted.

PoWER recommendations provide a set of key actions that the DFS sector could do to influence meaningful changes for women. Through PoWER strategy UNCDF is looking to further advance its agenda towards achieving sustainable and meaningful improvements for women’s financial inclusion.