New Report Explores Why Women Don’t use Formal Financial Services like Men

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New Report Highlights How Providers Can Help Close the Financial Gender Gap

In brief: Using behavioral data the study reveals some of the causes of the persistent gender gap in emerging economies including Kenya.

BFA (Bankable Frontiers Associates) recently released “A Buck Short: What Financial Diaries Tell Us About Building Financial Services That Matter to Low-Income Women”. The research report, sponsored by the Omidyar Network, explores why women in emerging economies such as Kenya, don’t access and use formal financial services to the same extent as their male counterparts.

Through the analysis of behavioral data from deep engagements with low-income, economically active women, the report identifies leveraging women’s social networks, tailoring tools to manage day-to-day transactions, and creating new digital, branchless platforms as some of the steps needed to better cater to this segment.

It is estimated that 1.1 billion women around the world are excluded from the formal financial system1— 55 percent of the global number of unbanked individuals. In developing countries, women lag men by 9 percent when it comes to access to a bank account. The report hailed Kenya’s mobile money innovations and agent networks recommending that financial service providers in other emerging economies should adapt these into their product designs.

The report indicates that leaving women out of the formal financial system is not just bad for women but also bad for business because women as a segment represent an important market opportunity.

“Although we have made great strides to expand access to financial services through new technologies and innovative business models, the gender divide stubbornly persists in most emerging markets,” said Tilman Ehrbeck, partner at
Omidyar Network. “This report highlights the importance of designing products and services that take into account behavioral insights as a key piece in cracking
this issue.”

Following the lauded  Financial Diaries methodology, the data analyzed in “A Buck Short” include both rich stories and detailed cash flows over time, offering a more nuanced view of surveyed women’s financial behavior, highlighting key differences from men’s, and uncovering compelling product design recommendations for financial services providers.

“The reality is that traditional bank accounts just aren’t that useful for a lot of women who move in and out of the workforce, earn very little money, and are typically managing day-to-day cash flows rather than big, long-term investments with their savings,” explained Julie Zollmann, senior associate at BFA and co- author of the research. “For financial service providers, this means building even lower cost tools to solve women’s money problems.”

 

| The article contains excerpts from a Press Release permitted for use on OYGK Magazine

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