Gender and financial inclusion

In many societies, women face discrimination and are disproportionately vulnerable. Unequal gender roles have implications for the most basic aspects of self-determination, dignity and freedom, which in turn influence financial inclusion - or lack thereof.

Gender dynamics, however, can and do change over time. The financial services industry can be both a catalyst and barometer of gender equality. On its own, financial inclusion will not result in gender equality. Only with equal access to the full range of needs-based financial services – savings, credit, insurance, payments – and the accompanying financial education, do women stand a chance of social and economic empowerment.

Whether they work in the home or outside of it, whether they are employed or self-employed, financial inclusion provides women the tools for accumulating assets, generating income, managing financial risks, and fully participating in the economy.

The financial services industry can be both a catalyst and barometer of gender equality

Women, the world of work and financial inclusion gap

Globally, women have fewer economic opportunities. Less than half of all eligible women participate in the labour force, compared to 75 per cent of men. Women are also more likely to work in informal employment and in vulnerable, low-paid or undervalued jobs. They also do not enjoy the same access to financial services as men. Fifty-six per cent of all those without a bank account are women – meaning that nearly a billion women are unbanked. Those with bank accounts do not necessarily have control over their finances, nor have much wealth, but it is a starting point for financial inclusion.

Why target women with financial inclusion?

Recent studies have shown that that women and girls fare worse than men and boys on a range of factors that predispose them to poverty. Results from a study done by UN Women and the World Bank show that between the age of 20 and 34, women are more likely to be poor than men. Divorce, separation and widowhood affect women more negatively than men. In the 18-49 age group, divorced women are more than twice as likely to be poor than divorced men.

While economic inclusion can lead to financial inclusion and vice versa, gender dynamics hold women back on both accounts. This needs to change. Commercial banks often focus on men and formal businesses, neglecting the women who make up a large and growing segment of the informal economy. Many microfinance institutions (MFIs) have risen to the challenge, focussing primarily on women, but to change the status quo, much more is needed, from formalising MFIs to providing women with financial knowledge.

Furthermore, our research shows that women tend to contribute larger portions of their income to household consumption than their male counterparts do. Targeting women with financial inclusion can also benefit households, communities and society.

The work of Social Finance and gender

Women’s empowerment through financial inclusion is an essential component of promoting the ILO’s Decent Work Agenda. While we mainstream gender in all our work, some examples where we explicitly focus on women include:
  • Financial education: Financial education provides basic skills related to earning, spending, budgeting, borrowing, saving, and using other financial services such as insurance and money transfers. It is essential for increasing financial literacy and helps women to achieve better business results, better equality, and more empowerment. The ILO has developed a number of training materials adapted for various target groups, including women. It has benefited thousands of women in a number of countries, including Argentina (see video), Egypt, Morocco and Tunisia.
  • Microfinance for Decent Work: This action research supported 16 MFIs worldwide to develop products and services to reduce decent work deficits.
  • Making Microfinance Work – Managing product diversification: This is a training programme for financial institutions developing products or distribution efforts to reach new market segments. While gender is mainstreamed in the programme, there is a specific training module on “Microfinance for women”.
  • FAMOS Check Guide for financial institutions: Together with the ILO Women's Entrepreneurship Development (WED) programme, Social Finance is promoting the use of the gender-based service quality check for Female And Male Operating Businesses (FAMOS). The check guide facilitates financial service providers, business support agencies, and government departments to have a fresh look – and a systematic assessment – of the extent to which they provide women entrepreneurs with appropriate products and services.
  • Digital wage payments to foster financial inclusion of women workers: Social Finance launched its Global Centre on Digital Wages for Decent Work in December 2020. The Global Centre promotes the transition from cash to digital wage payments through research and evidence-based advocacy. With a specific focus on gender equality, the Global Centre will enable millions of women workers around the world to receive their wages digitally for better resilience and economic opportunities. Social Finance conducted studies on digital wage payments for female workers in the Philippines and Viet Nam in partnership with Women’s World Banking. In Myanmar, it conducted the study with UN Women and UNCDF.

Women and inclusive insurance

Besides considering how women manage money and take advantage of business opportunities, the ILO also considers how they manage risks:
  • Pioneering the “Caregiver Policy” with MicroFund for Women (MFW): MFW aims to harness the productive capacity of micro-entrepreneurs in Jordan, especially women, by providing them with financial and non-financial services. Its work contributes to the empowerment of underprivileged women as they become income earners and decision-makers in their communities and to reduce unemployment by enhancing economic opportunities and providing support to entrepreneurial enterprises. Together with Women’s World Banking, the ILO helped MFW develop a hospital cash insurance product designed for their clients.
  • VimoSEWA Impact Study: This study focussed on the impact of preventive health education on insurance utilisation for members of the Self Employed Women’s Association (SEWA).
  • Developing communities of practice that promote women’s access to better quality insurance: We work with partners to create opportunities for industry stakeholders to come together, share knowledge and learn how to improve women’s access to better quality insurance across the globe. One such partnership is with the Women’s Insurance Program of the International Finance Corporation (IFC) and will focus on reducing the gender protection gap. Two webinars, one in January and one in March 2021 have already been organized and the community of practice (CoP) on better serving the women’s market is due to launch in April. We are currently inviting insurance providers, including reinsurers and insurtechs, to indicate their interest in joining this CoP.
  • Research into gender-sensitive insurance products provides clear guidance on how to design and deliver insurance, taking into consideration women’s preferences and priorities.
  • Promoting equal access to insurance services for women, such as at ILO’s Impact Insurance Forum at the 15th International Conference on Inclusive Insurance. Read this blog for more information.

Gender and the ILO

Across the ILO, there is a broader agenda to tackle gender inequality. The Gender, Equality and Diversity & ILO AIDS Branch (GED/ILOAIDS), supports policies and programmes throughout the organization that promote gender equality and lead to women’s empowerment. The ILO’s Women’s Entrepreneurship Development (WED) programme, works to enhance economic opportunities for women by developing tools and strategies specific to the needs of women entrepreneurs.