Guest Articles

December 12

Mary Ellen Iskenderian / Monique Nsanzabaganwa

Don’t Just Color It Pink and Call It Financial Inclusion for Women

Policymakers often do not figure in stories of innovation, disruption and change. In fact, they are often seen as stewards of the status quo, enemies of progress. Not anymore. This past September in Fiji, policymakers proved they could be game-changers for women’s financial inclusion.

More than 100 financial regulators and policymakers adopted the Denarau Action Plan, the Alliance for Financial Inclusion’s (AFI) commitment to gender and women’s financial inclusion. The 10-point plan focuses on creating regulatory and operational environments conducive to bringing financial products and services to women.

The timing couldn’t be better: Momentum for women’s financial inclusion is increasing – led primarily by the private sector and civil society – and digital technologies are shaking up financial systems the world over. By adopting the action plan at this critical moment, policymakers are demonstrating their commitment to closing the financial inclusion gender gap, and looking to engage more with financial service providers and other stakeholders to push this agenda forward.

There is no doubt that technology will play an important role in driving financial inclusion, so the action plan directs regulators to enhance the reach and sustainability of digital financial services through improvements to access and infrastructure. We know that making these services work for women isn’t as simple as recreating M-Pesa and coloring it pink. One reason: Women’s World Banking’s research has found that many low-income women are not able to open savings accounts in their own names without formal forms of identification. Regulators can help financial institutions reach these women with simplified Know Your Customer requirements that are easily addressed through digital technology. For example, Women’s World Banking worked with Diamond Bank in Nigeria to develop a mobile savings account that can be opened with simply a photo (taken by phone) and other basic information.

We also know that financial institutions need to have a better understanding of the women’s segment. Research conducted by Women’s World Banking on financial institutions serving the women’s small to medium enterprise market found that the most successful took deliberate steps to understand women’s business niches and redesigned internal processes and product offerings to meet their specific needs.

It’s been said that you can only improve what you can measure, which is why collecting and tracking data – specifically gender-disaggregated data – is indispensable if we are to close the gender gap. The plan makes developing and promoting best practices in this area a priority. Tracking financial inclusion metrics by gender allows everyone, from regulatory bodies to financial institutions to industry-watchers, to measure policies, practices and innovations to see if they are actually reaching the population they are intended to reach, and to devise strategies to accelerate the ones that are working or adjust the ones that aren’t. Women’s World Banking’s Gender Performance Indicators provide a set of metrics that allow financial institutions to track and measure how well they are serving women clients. The benefits are clear: A partner institution in Latin America, for instance, tracked gender-disaggregated data about client growth to identify which areas of the country showed more growth of new women clients, allowing the institution to divert resources as necessary to reach its targets.

Ah yes, targets. Few management tools align broad-based efforts more effectively, which brings us to another critical mandate in the action plan. It encourages adoptees to set women-focused financial inclusion objectives and targets that are reported on a regular basis to monitor progress. In this regard, Rwanda has been a world leader.

In 2008, formal financial inclusion in Rwanda hovered at 21 percent. That year, the government and Central Bank introduced policies and regulations, coupled with supportive infrastructure, that consequently doubled (42 percent in 2012) and tripled (68 percent in 2015-16) the rate of formal financial inclusion in the country. Policies included country-wide Savings and Credit Cooperatives initiated by the government and licensed and supervised by the Central Bank, as well as Central Bank regulations enabling agency banking and interoperable digital financial services. These were backed by effective leadership at central and local government levels, a smart ID system, a credit reference bureau, and country-wide fiber optic and broadband access, among other changes. Rwanda also introduced gender-disaggregated data collection and has since been able to track its progress in closing the gender gap in formal financial access; it went from 15 percent in 2012 to 11 percent in its most recent survey.

The last point in the action plan may come as a surprise to many, but it shouldn’t. It calls for greater gender diversity in the regulatory bodies and central banks that count themselves among AFI’s membership. The evidence is incontrovertible that gender diversity is good for institutions; it leads to better decision-making, higher productivity and more innovation. We have seen this everywhere from Fortune 500 companies to small microfinance banks. If central banks are to be the institutions leading the charge for women’s financial inclusion, they are going to need people who understand the women’s market at the decision-making table.

Though the private sector has been at the forefront of financial inclusion for many years, it can’t truly succeed without the leadership of regulators. The Denarau Action Plan charts a path for policymakers to create an enabling environment that encourages women’s financial inclusion and we whole-heartedly endorse it.


Mary Ellen Iskenderian is president and CEO of Women’s World Banking and Monique Nsanzabaganwa is vice governor of the National Bank of Rwanda.

Photos courtesy of Women’s World Banking


Finance, Uncategorized
data, financial inclusion, public policy, public-private partnerships