What can financial service providers do to advance women’s financial inclusion and climate resilience?

International Women’s Day is the perfect opportunity to celebrate progress in women’s leadership, applaud advances in gender equality and recognize the sacrifices made by many unknown women and men to make our world more just and equitable. In spite of some progress which we’re thankful for, there is yet so much left to do. This is a time to renew our commitment to women’s financial inclusion, empowerment, and resilience in the context of a changing climate.

Mind the Gap

An additional $28 trillion can be added to the global GDP by 2025 if we close the gap between men and women in the workforce. Apart from this monetary value, a growing body of research suggests that gender parity can become a key driver of social cohesion and inclusion in an increasingly divided world.

Despite significant progress made so far on gender equality (SDG 5), notable gaps remain between our aspirations around gender equality and the prevailing realities of many women and girls. A recent ILO-UN Women study based on data from 84 countries, shows that the labour force participation of men aged 25–54 years is 95%, compared to 52% of women in the same age bracket. Though the gender gap varies by region, male labour force participation and wages are higher than women in most regions.

Meanwhile women perform over three times more unpaid care and domestic work than their male counterparts, including caring for children and elderly relatives. These domestic responsibilities often limit women’s earnings and career prospects and often confine them to low-wage jobs with less benefits and authority. The impact of the COVID-19 pandemic on women in low wage jobs was significant, as was evident in job losses, loss of childcare options as schools and daycares closed and increased risk of infection for those who continued working in frontline occupations such as healthcare support, markets and grocery stores.

Providers must navigate these structural barriers inhibiting women’s financial inclusion and economic empowerment to exploit the immense opportunity in the women market. By creating products and services that address women’s needs and aspirations, providers can grow their market share and bolster their revenue while closing the gender gap in financial inclusion. While a growing number of women are opening bank accounts, a global gender gap of 7 percentage points still exists.

It is vital to recognize that building climate resilience is integral to advancing inclusive finance and gender equality. Why? Markets and societies do not operate in vacuum. The impacts of climate change are the greatest inhibitors of financial stability, wealth creation, poverty reduction, and inclusive economic growth. Droughts, floods, fires and other extreme weather events displace whole communities and disproportionately impact women and girls. Climate emergencies, the likes of which we increasingly witness across the globe today, displace whole communities from agricultural land, cause loss of jobs and property in households and small businesses, intensify communal conflict for natural resources, increase food prices and health risks. Climate change and environmental risks destroy assets and deepen poverty for many low-income women and communities.

As the engine for jobs, innovation and investments, financial service providers have a critical role to play in advancing gender equality and in enabling women and the most vulnerable communities build resilience and mitigate losses that result from climate change.

What can financial service providers do?

• Start from the workplace: increase women’s leadership and representation within their organizations. This includes workplace protections and services for women
• Create & invest in decent jobs and skills training for women: invest in startups expanding opportunities for jobs and mentoring in the green economy. Eg. solar companies.
• Literacy/Awareness: FSPs can be intentional in their marketing and advertising campaigns to reach women. They should execute creative and even dramatic showcases of the benefits their products offer women.
• Product Design: Gender neutral products are fine but women specific products are better for reaching excluded women. Adopting customer-centricity enables providers to design women specific products with unique insights that will enhance the value proposition of the final product / service. In particular, being able to tap into the peculiar cycles and interruptions in women’s professional and domestic life e.g maternity, health care, child care etc, will allow providers unlock untapped opportunities and offer better value propositions
• Collaboration: Collaborations among providers within the industry and also government — private partnerships should tackle barriers to women’s inclusion including fulfilment of KYC requirements. The less barriers women face on their journey to opening a bank account, the easier it is to include more people.
• Invest in affordable, accessible and reliable digital financial services such as mobile money and agency banking to reach women in remote rural areas and underserved urban communities where traditional banks cannot reach. However, such products and services must engage the participation and leadership of women in their design and delivery processes.
• Support women’s enterprise through affordable credit facilities tailored to reflect the needs and aspirations of poor economically active women, accompanied by non-financial services such as health and training interventions. Access to affordable credit can boost household resilience to shocks, enable women farmers invest in agricultural inputs such as improved irrigation, livestock and climate-friendly fertilizers.
• Invest in mobile-money enabled insurance services offering low-cost premiums and payments via mobile money that can address the lack of financial protection that small-holder farmers and vulnerable communities face in dealing with unpredictable weather patterns.
• Engage in collective policy advocacy with other providers to ensure that government establishes an enabling environment for gender equality and climate action through financial services. This may mean advocating policies to support innovation and experimentation within the bounds of customer protection, policies enabling relaxed identity requirements for certain categories of financial services since underserved women often lack the formal documentation, policies and interventions that reduce the cost to serve citizens living in remote and rural locations and underserved communities.

Achieving equality requires everyone, both women and men, to advocate consistently for more opportunities for women while also actively tearing down the socio-cultural barriers, and biases that render women invisible and exclude them from participation in the economic and environmental decision-making that shapes their lives.

#ChooseToChallenge #InternationalWomensDay2021

Written by Dr Ijeoma Nwagwu and Tobechukwu Njideaka, members of the Sustainable and Inclusive Digital Financial Services initiative of the Lagos Business School