NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, November 12, 2014

More than 2.5 billion people worldwide lack access to quality financial services, and at least half are women. Yet women’s need for financial services may actually exceed that of men because they tend to live longer, have lower levels of formal employment, own fewer assets, and have less control over household finances. Limited financial inclusion is one important factor keeping women poor and perpetuating inequality.

One area in which women often face more difficulty is access to credit, meaning the ability to obtain goods and services before payment. Without credit, women’s opportunities to work in the private sector and succeed as entrepreneurs are limited.

Unfortunately, many women are systematically denied credit regardless of their ability to repay loans. Creditors may assume that women pose a credit risk because of misconceptions about their spending and saving habits, or because they lack collateral. Biases and discrimination could deny qualified women credit simply because of their gender. Some economies have outlawed gender discrimination in credit transactions to address this.