Role of Financial Literacy in Promoting Women’s Inclusion
As we celebrated International Women’s Day, I couldn’t help but reflect on how women in today’s hyper-connected world still face financial exclusion.
Unfortunately, estimates indicate that 2.3 billion women of working age do not have an account at a formal financial institution.
It is also high on the political agenda, with a wide range of supply-side initiatives designed to improve access and growing recognition of the importance of tackling demand-side barriers. to financial inclusion.
In particular, there has been a significant appreciation of the role of financial education in improving levels of financial inclusion around the world.
It is widely accepted that better and relevant financial inclusion initiatives can help reduce gender inequalities. Women who have access to bank accounts, savings mechanisms and other financial services may be better able to control their income and undertake personal and productive expenditure.
In fact, many studies postulate that better access to financial services for women could also prove to be the key to unlocking the growth potential of their micro and small businesses.
Financial inclusion for gender also helps reduce the exposure of poor and rural households to income shocks, thereby improving growth and promoting more sustainable and equitable development.
Creating a vibrant and globally competitive economic sector depends on financial inclusion. It is through this that Kenya hopes to create jobs, promote a culture of savings and finance the country’s investment needs.
Highly rated for mobile phone penetration, Kenya has an opportunity to not only improve access and usage, but also build consumer capacity for better protection and financial behavior healthy.
Reaching historically underserved individuals and groups remains the greatest challenge. A large number of women and young people have low levels of education and skills and many still face cultural barriers that prevent them from accessing credit.
By working closely with the Women in Business Network, we at CPF believe we have the opportunity to make a strong contribution to communities across our country by promoting financial literacy among those engaged in business, strengthening also the financial and operational growth of women-led groups. as part of financial business skills training.
One of the central levers of our strategy is to ensure that women have greater access to and use of digital financial services, such as mobile banking accounts and digital payment systems, so that they can make their own spending, saving and financial risk-taking decisions. , and build their own financial future.
Explicitly, the primary goal of this work is to close the persistent gender gap in financial inclusion, with a focus on low-income women.
Global data from the World Bank confirms that while account ownership has increased overall, gender gaps are not narrowing and remain unchanged over the past six years. Although we have seen good progress in financial inclusion, women are still less likely than men to have an account.
In developing economies like ours, the gender gap averages nine percentage points, which has remained virtually unchanged since 2011. That doesn’t mean women aren’t making progress; we have seen progress in the absolute number of banked women.
I believe mobile money can reduce gender inequalities in financial inclusion. We have seen that where there is high mobile phone ownership, as in the economy of sub-Saharan Africa, gender differences are narrower.
For example, in Kenya, men are 18 percentage points more likely than women to have a traditional bank account – but more women than men only have a mobile money account.
While more deliberate efforts are needed to close the gender gap and realize the potential gains of financial inclusion, educating women actively engaged in business on how they can formalize their business remains crucial to reducing poverty. gender gap.
As a first avenue to accelerate the closing of the gender gap, we see the promise of digitizing social safety net programs to increase the value of digital financial services for women – especially the poor – and to encourage more women to adopt and use digital financial services.
Our hypothesis is that digitizing a predictable income stream for women is a way to rapidly close the gender gap in digital financial inclusion and a potentially powerful platform to catalyze women’s economic empowerment.
The author is the Managing Director/CEO of CPF Group