Here is what life is like for a woman with no bank account in a developing country. She keeps her savings hidden — in pots, under mattresses, in fields. She constantly worries about thieves. She may even worry about her husband taking cash she has budgeted for their children’s needs. Sending money to a family member in another village is risky and can take days. Obtaining a loan in an emergency is often impossible.
An unexpected expense can mean she has to pull a child out of school or sell a cow the family relies on for income. Or, worse, it can mean she must give birth at home without medical assistance because she doesn’t have the money for a ride to a clinic.
In ways big and small, life without access to financial services is more difficult, expensive and dangerous. It constrains a woman’s ability to plan for her family’s future. At the community level, it traps households in cycles of poverty. More broadly, it limits the economic growth potential of developing countries.
So it is not hard to understand why the spread of new digital financial services to the world’s poorest places has been heralded as a breakthrough with the potential to alter the global economy. Digital financial services offer the world a huge chance to connect more than two billion people to their first bank accounts, lift millions of families out of poverty and accelerate the participation of developing countries in the global marketplace.
But this vision of the future won’t materialize on its own. Unless we make a course correction, it won’t materialize at all. For digital financial services to achieve their full impact, we must be deliberate about ensuring that these services are reaching an especially crucial group of economic actors in developing economies: women.
Even though this technology is spreading rapidly, it is not spreading to women equally. Consider Bangladesh, where four out of five people do not have traditional bank accounts. Thanks to fast-growing digital financial services companies like bKash, mobile money is transforming the way Bangladesh does business.
Yet only 44 percent of Bangladeshi women own mobile phones, compared with 72 percent of Bangladeshi men. And as a result, only 13 percent of Bangladeshi women have used mobile money, compared with 33 percent of Bangladeshi men.
This gender gap repeats itself over and over: In low- and middle-income countries, a woman is 21 percent less likely to own a mobile phone than a man. In Africa, the Middle East and South Asia, the gap is even greater. And where there is a gap in access to technology, there is also a gap in the use of financial services.
Women make up half the population. So it is obviously a huge wasted opportunity whenever women are isolated from the economy. However, when women are empowered as economic actors, the benefits touch everyone. Economically empowered women are one of the most important engines of growth in developing countries, and they play a central role in building prosperous communities.
Women spend money differently from men. They tend to invest more in the health and well-being of their families — as much as 10 times more. They give priority to spending on health care, nutritious food and education. A child born in a household where the mother controls the family budget is 20 percent more likely to survive — and much more likely to thrive.
When women have access to digital financial services, it is easier for them to invest in the future of their families. That benefits everyone, because healthier, more educated children today mean healthier, more prosperous communities tomorrow.
The GSMA, an association of mobile operators, estimates that closing the mobile phone gender gap could open a $170 billion market to the mobile industry alone over the next five years.
So how do we get more of this technology to more women? One thing we need is more information about why women are less likely to own mobile phones or use mobile money services.
This month, the World Bank will release the Global Financial Inclusion Database, or Global Findex, report. This report will provide new insights into women’s use of digital financial services and help improve our understanding of how to close the gaps that remain. The Group of 20 industrial nations are also trying to better understand how digital payments can empower female entrepreneurs and bring more women into the formal economy.
In the meantime, governments, nonprofit organizations and the private sector are working together to dismantle the barriers we already know exist — like committing to digital payroll and social service payments and exploring creative financing options to help make cellphones more affordable for women.
Mobile money companies are also looking for ways to make their services more attractive to women. After a Somali mobile money service called Telesom ZAAD began using female staff members to register female customers, women rose to 24 percent of the company’s customer base from 17 percent in just one year. More creative approaches to closing this gap will help this important technological breakthrough truly break through to everyone. It is here that the technology industry, as well as the global development sector, should look to invest.
A decade from now, economies in developing countries will be increasingly dependent on digital financial services. Will we limit growth for everyone by leaving the world’s poorest women trapped in a shrinking cash economy? Or will we invest in our future by empowering these women to invest in theirs?
