In the twenty years since representatives of the Fourth World Conference on Women in Beijing crafted the unprecedented Platform for Action, much progress has been made, and many lessons have been learned.
For instance, financial inclusion for women has resulted in increased household welfare and more vibrant local economies. At the same time, data on access and use of financial services shows that women are still less financially included than men, even in countries with relatively high levels of overall financial inclusion.
Although between 2011 and 2014 the number of adults without a formal bank account – the unbanked – dropped by 20 percent to 2 billion, the gender gap in account ownership is not narrowing. In 2011, 47 percent of women had an account, while 54 percent of men did. Today, 58 percent of women have an account, and 65 percent of men do.
If achieving financial inclusion is key for women to be able to engage with their local economies and invest in their families and communities, investment in appropriate and transformative local infrastructure can be a critical accompaniment to accelerate progress for gender equality and women’s economic empowerment.
What Do We Do?
Providing access to financial resources and capital for women and gendersensitive investments not only increases inclusive growth, but can also help to reduce income gaps between men and women.
Recognizing that a blend of gender-sensitive public and private investment will be required to advance local development, in 2014 UNCDF, UNDP and UN Women designed the Inclusive and Equitable Local Development (IELD) programme, to test ways of unlocking private finance for potentially transformative infrastructure projects that benefit women.
IELD focuses on gender-sensitive infrastructure projects at the local level, such as feeder roads, bridges, and micro hydro that have potential to be significant drivers of women’s economic empowerment. The programme uses a variety of investment forms, including structured project finance, publicprivate partnerships, and cluster financing for small and medium enterprises.
Through the Transformative Impact Financing (TIF) approach, UNCDF puts its local development finance instruments to work to unlock domestic capital for local economic development and entrepreneurship, with a special emphasis on the development impact as a measure for success. IELD looks particularly at the infrastructure investments that confront and address critical barriers to women’s economic inclusion, notably those that produce goods and services that respond to the needs and demands of women.
UNCDF’s regional programme Shaping Inclusive Finance Transformations (SHIFT) also seeks to advance women’s economic empowerment by accelerating women’s access to regulated financial services towards eliminating unequal access, while integrating women-centric strategies and initiatives in growing inclusive enterprises through innovative financing mechanisms, by collaborating with financial services providers across markets in the developing world.
Access to and use of regulated financial services increases incomes of low-income population, helping them to move out of poverty and stay out. Individuals and microentrepreneurs secure opportunities to build equity, invest in businesses and in themselves (for example, on health care, education and skills), better manage their small and/ or irregular incomes that would otherwise cause vulnerability, and more easily pay for merchants or send and receive money from relatives and friends. Similarly, small and medium businesses secure opportunities to invest and grow, which create jobs and help individual employees to secure regular income flows, enabling them to better plan and manage their finances.
SHIFT provides credible data and analysis to inform and influence decisions of financial institutions and regulators. It works directly with the private sector to offer matching-funds to make smart investments to develop new prototypes and bring to scale viable business models. It coordinates relevant market actors and public interest groups to build momentum and political will to reform policies and regulations. Moreover, it is testing e-learning applications and modules to increase the capacity of professionals working in financial and adjacent markets.
SHIFT is a regional programme launched in 2014 with support from the Australian Government and the Netherlands Development Finance Company (FMO) to accelerate financial inclusion in ASEAN, with an initial focus on the frontier economies of Cambodia, Lao PDR, Myanmar and Viet Nam.
Another programme which focuses on women’s economic empowerment is MicroLead Expansion. Based on the impressive results of MicroLead phase I, which reached over one million new depositors by supporting market leaders in financial inclusion to expand to underserved regions, in 2011 UNCDF launched MicroLead Expansion which continues with the focus on deposit mobilization but emphasizes reaching ‘last mile’ populations by downscaling commercial banks, creating/strengthening rural credit unions, and linking informal savings groups via technological innovations.
Savings as a Stepping Stone to Women’s Economic Empowerment
MicroLead began in 2009 when UNCDF, in partnership with the Bill & Melinda Gates Foundation, initiated a flagship $27 million global inclusive finance programme to provide loans and grants on a competitive basis to microfinance institutions, commercial banks and financial cooperatives based in developing countries and pursuing a savings-based approach to expand operations to underserved markets. At the end of the programme in 2014, over one million new active depositors had been reached across African and Asian LDCs.
Expanded in September 2011 with a contribution from The MasterCard Foundation, UNCDF launched the expansion of MicroLead in sub-Saharan Africa via a $23.5 million, six-year programme to increase access to deposit services to a minimum of 450,000 low-income people in rural markets employing alternative delivery channels and financial education to increase uptake and usage.
One year later, UNCDF expanded MicroLead to Myanmar with a $7 million, 4.5 year grant from LIFT Myanmar, a multi-donor trust fund. The Myanmar programme awarded funding to three Asian microfinance leaders to support their entrance into Myanmar. As with the other two phases, MicroLead Myanmar’s focus is on deposit services to rural low-income populations.
One example within its sub-Saharan Africa Expansion phase is MicroLead’s support to NBS Bank in Malawi to increase its rural outreach via alternative delivery channels with a focus on women.
Based on the findings of TSP Women’s World Banking research undertaken with NBS Bank, the project team developed the Pafupi savings account, a mobile savings account designed for low-income people in rural areas, especially women with no previous access to a bank account.
In October 2014, NBS launched its pilot of the Pafupi Savings product through the Bank’s proprietary Pafupi agent network.
Pafupi savings accounts have no monthly fees and enable women to bank in their neighbourhoods, cutting the cost of transport and therefore the cost of accessing formal financial services. Pafupi offers transaction services through local shops, which serve as bank agents. The agents and bank customers transact using a mobile phone.
At year-end 2014, NBS’ Pafupi pilot counted 63 active agents offering access to its bank services and had opened 1,530 branchless Pafupi accounts. The early pilot results confirmed the partners’ original findings and will be the basis for the bank’s planned institution-wide roll-out of the Pafupi product in 2015. Through the MicroLead project, NBS expects to double the number of customers it serves by 2016.