Top Five Digital Financial Service Features That Impact Women’s Access and Use

Research in Kenya and Côte d’Ivoire provides guidance for DFS providers and regulators

By Helene Smertnik, Senior Researcher at Caribou Digital and Savita Bailur, Research Director at Caribou Digital 

A focus group discussion discussing women’s experiences with DFS
Yopougon, Côte d’Ivoire. Photo credit: Caribou Digital

This blog links to a longer paper we published on SSRN on the impact of DFS features on women in Kenya and Côte d’Ivoire based on primary research with “end users”. For more information, please see the paper and please feel free to contact us at helene@cariboudigital.net or savita@cariboudigital.net at any point.

In 2019 (pre-COVID-19), with the support of the Gates Foundation, Caribou Digital and the DFS Lab embarked on a research project to identify which digital financial service (DFS) features impacted women’s access and use the most, compared to men in Kenya and Côte d’Ivoire. Mid-way through our research, we shared our initial findings, and with our research now complete, we’re able to take a closer look at these features. There were five that stood out the most:

1. Ubiquitous agent networks.
2. Real-time SMS notifications and seamless interoperability.
3. Transparent fees.
4. Help users avoid the need to revoke payments.
5. Less stringent ID requirements as part of a tiered KYC approach.

Ubiquitous DFS networks 

Uniting tech and touch is critical for women. Women were quite vocal about the importance of a ubiquitous agent network (with no gender preference for agents) in order for them to have trust and confidence in DFS. In fact, a few women mentioned that they were dissuaded completely from using a financial service if it did not have any shops or agents, as was the case with the loan app Tala, which only provided a customer service number to call.

Older and less digitally savvy women relied the most on agents, indicating a generational divide which is sometimes even greater than the gender divide. Though older women said they sometimes ask their children for help, they were also cautious about disclosing how much money they had to their family. As a result, they would often go to agents for help.

Recommendation: DFS providers’ investment in physical agent networks is therefore critical to ensure the uptake of their services by women.

Real-time SMS notifications and seamless interoperability 

As part of our research, we observed men and women conducting mobile money transactions at shops. A key difference in their behaviors was that women tended to wait in the shop until they received the SMS notifications confirming their transactions, while men would simply drop off the money and continue on their way, expecting the SMS to come later. Because women require the official confirmation before moving on, real-time SMS notifications are key for their continued use of mobile money. If they have to wait too long, they will eventually go back to using cash to avoid wasting time. 

The issue of timely SMS notifications comes up especially when using interoperable services, highlighting the need for more seamless interoperability. For example, Equity Bank and M-Pesa are interoperable, meaning they connect to each other and transfers can be made between their accounts. However, the transfers sometimes take time to process, and the confirmation messages do not arrive or are late, leading women to go back to manual cash transfers. 

Recommendation: Ensuring SMS notifications are received in near real time is critical for DFS providers to best serve women.

Transparency in fees and cost structures 

“The units disappear without anyone knowing why. This colleague is telling us it is because of subscriptions done without our agreement but until now I had no clue,” said one of our interviewees, Elodie. Such hidden and nontransparent fees discourage women from using DFS, as we found that women were more sensitive to fees than men and also less likely to find workarounds to avoid them. For example, in both Kenya and Côte d’Ivoire, younger men knew that they could reduce transaction fees by conducting smaller transactions multiple times rather than one higher cost transaction, while most women were not aware of this strategy. 

Because of these fees, there was a strong sense among low-income women that money didn’t “grow” when left on their phone. Consequently, they did not associate mobile money with the possibility of savings, preferring savings groups or keeping money in cash at home, despite potential security issues. 

Recommendation: To ensure women use DFS, it is key for providers to have ethical cost structure designs as well as transparent communications about possible fees.

Help users avoid the need to revoke transactions 

Most digital financial service providers offer an option for revoking a payment after it has gone through. However, this process is complex, and the use of this option has the potential to hinder women’s usage of DFS more than men’s. In neither Côte d’Ivoire nor Kenya were there clear instructions from the DFS providers for how to go about revoking a payment, and if the money had already been withdrawn it became impossible. 

In a focus group discussion with women merchants in the outskirts of Nairobi, we also heard about how revoking features could lead to fraud, as some of the women had been cheated by customers who paid but then reversed their payments. The women were considering reverting back to cash due to these experiences. 

Recommendation: Given the complexity and cost of revoking payments and the lack of standards in place, it is important for providers to help users avoid the need to revoke payments by guaranteeing clear and sufficient cancelling features in place before the user hits send. For example, confirmation messages should appear which explicitly state the phone number and amount being sent, and should give enough time to review all the information without the phone shutting down. 

ID requirements and the need for a tiered KYC approach

In theory, women said they appreciated the importance of requiring an ID for security measures, both for agents and customers. However, in practice they privileged going to agents who didn’t ask for their ID. Since many women do not have an ID, they often rely on their husbands’ ID, or simply do not use digital financial services if an ID is required. 

In response to this reality, in Côte d’Ivoire, some agents intentionally do not ask for ID in order to gain a competitive advantage over agents that required it. In Kenya, agents would not always ask for ID when they already knew the customer. We also saw scenarios where agents would only require ID for transactions over a certain amount. 

Recommendation: While these agents are improvising to respond to the needs of their customers, ID requirements should be adjusted and standardized to meet women’s needs. A tiered KYC (know your customer) approach would encourage women’s usage by allowing them to make small mobile money transactions without providing identification. 

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The women’s experiences shared above highlight how important it is for DFS providers and policy makers to consider women’s needs and wants in order to make sure they are financially included. The risk of women’s financial exclusion is even greater in the context of COVID-19, as payments are increasingly digital and access to DFS is crucial. These five features can help ensure that digital tools make women more - not less - financially included. 

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Watch our webinar, What Digital Financial Services features might matter more to women than men and why?

This research was conducted with AFROES in Kenya, led by Gathoni Mwai and Sylvia Oloo and Empow’Her, led by Chloe Roncajolo and Serge Kouadio in Côte d’Ivoire. A special thanks to them.

Do women need their own financial services?

by Erin B. Taylor and Anette Broløs

Historically, few financial tools have been developed with women in mind or marketed to them directly[i].  Today, however, new financial services are appearing on the market that respond to practical everyday economic needs including design and marketing. Currency converters, financial management apps, investment apps, and alternative credit sources, are now being developed specifically for women, or primarily marketed to them. A plethora of websites, blogs and podcasts for women offer advice, information, and educational courses on finance. Many of these are community-based initiatives and aim to create a dialogue with women. 

But do women really need their own financial services? What can these new fintech products offer women that gender-neutral products can’t? We explore these questions in two new publications. One is a book chapter called “Financial technology and the gender gap: Designing & delivering services for women” (in Malefyt and McCabe 2020), and an industry report called Female Finance: Digital, Mobile, Networked (EWPN/Keen Innovation 2020). 

The financial gender gap exists for many reasons, including income inequality, women taking time off for child-rearing or caring for a family member, fewer investment opportunities for women, and the tendency for women to manage daily budgets while men tend to take care of long-term financial management[ii].  Lower (or different) financial literacy, lack of confidence in financial knowledge, and differences in investment behavior can limit women’s ability to achieve financial security[iii].  And in some areas of the world poverty, limited access to technology and legal restrictions hinder women’s access to financial tools and confidence in using them[iv]. 

However, to our surprise, we discovered that there is neither an overview of existing financial solutions offered to women, nor an overview of research on women’s engagement with their finances. Through our work as co-organizers of research activities within the European Women Payments Network (EWPN), we also noticed that industry professionals are not very aware of what the market in fintech for women looks like. Few professionals could name any fintech products designed specifically for women. 

So we set out to discover what this market consists of, how extensive it is, what kind of women it serves (as well as where they’re located), and – most importantly – how fintech products claim to serve women. Along with the EWPN and Keen Innovation, we identified as many fintech products for women as we could. This is a very new field: most of the companies we found were founded during the last 5-10 years). The resulting report not only maps out these products, but also begins to analyse how they serve women in five areas: payments and credit, financial management, insurance, investment, and capital for entrepreneurs.

Common features in services for women 

• Storytelling in a language that speaks to women's life contexts 
• Accessible solutions that are digital and mobile 
• Learning opportunities (blogs, support, "academies") 
• Social features (mentors, events, networking, communities) 

Through our analyses of the concrete product and service offering, we realized that women tend to engage with finances differently to men. They value financial services that understand their life situation (young professionals, young families with housing and children on their minds, single parents or women establishing their own company to allow more flexibility in their daily lives). They prefer services that are readily available, uncomplicated to use, and provide a fast overview of economic transactions and decisions. Women are increasingly investing money, and their investment decisions are often based on a broader range of criteria than investment advisers usually take into account.  They look to understand how their wealth can best be invested to ensure fulfilling their wishes over time, and tend to focus on social issues such as sustainability, local development and inclusion. 

Indeed, this social aspect of finance is critical to understanding how women can differ from men. Women appreciate being able to work and learn with experts and like-minded people. We suspect that is a reason why Voleo, a new investment club app that allows users to interact, has 40% female customers while not even being directed particularly at women. Similarly, Nav.it, a money management app, tries to harness women’s preference for social proof to encourage women to engage more with their finances. The app’s founder, Erin Papworth, claims that women lack the “financial vocabulary” to talk about money in ways that are relevant to their lives and goals. The financial system is still geared towards men and tends to exclude women, who, Erin says in a Nav.it podcast,  are not confident discussing things like investing and compound interest. Thus the goal of the app is not only to help individuals manage their finances, but change the ways women engage with finances and build a system “that has the feminine experience integrated into the overall system”. Women’s socioeconomic situation is rapidly changing, she says, and women now have the “power of the purse” to effect broader change.

So, do women need their own financial services? The answer is both ‘yes’ and ‘no’. The financial gender gap is persistent across cultures and income groups. While financial services designed for women are unlikely to increase women’s incomes and close the gap, they can provide some very useful tools to help women manage their finances better and a way that suits their preferred modes of engagement. Women need their own financial services because existing solutions do not cater to their economic needs and expectations. And delivery is just as important as design: a financial tool may be theoretically perfect for women to use, but if it isn’t delivered in a way that speaks to women’s needs it will likely fail to reach its target market. 

However, we should warn that women are a very diverse group and experience both the financial gender gap and financial services themselves in diverse ways. Women’s financial practices therefore cannot be studied without taking into account the surrounding cultural, economic, legal and educational factors that make up the context of women’s lives. Moreover, what counts as “women’s lives” is in a constant state of change. For example, women’s investments are rising much faster that men’s. Women increasingly start their own companies or raise crowdfunded capital for their projects. Family patterns and job circumstances are also changing fast. When designing financial services for women we cannot treat women as a static, homogeneous group. We need nuanced research to feed into the intelligent design and delivery of financial services. 

There is plenty more to be done. We plan to develop new empirical research on women’s engagement with finances, covering issues such as how women engage with finances on the move, what services and products they use to grow their wealth, and how the digitization of ‘financial inclusion’ services such as microfinance impacts women. We particularly encourage companies and researchers to engage with women in practice by providing well-designed research that can contribute to the design of financial services that fit with women’s preferences, values and contexts. 

We also plan to update the overview of financial services for women to follow progress and changes in the market over time. A more complete analysis of financial services from different perspectives, focusing on factors such as economics, digital development, education, history, religion, consumer behavior, and more would be useful to build a more nuanced picture of women’s needs and the differences between women. 

And, most importantly, we need to be having broader conversations about these issues. Join us at the EWPN Research Network LinkedIn group to share your own ideas with industry professionals and academics who are working on these issues. You can also share your favorite books, articles, and white papers on the subject, or suggestions for companies we should look into and to include in our overview of the market. Above all, let us know if you agree with us or not. The more diverse and dynamic the conversation, the better placed we will be to understand why, and under what circumstances, diverse women may need their own financial services. 

The book chapter: Taylor, E.B. and A. Broløs. 2020. Financial technology and the gender gap: Designing & delivering services for women. In Women, Consumption and Paradox: Towards A More Humanistic Approach to Consumption, pp.103-128. Edited by Timothy de Waal  Malefyt and Maryann McCabe. Routledge.

The industry report: Broløs, A. and Taylor, E.B. 2020. Female Finance: Digital, Mobile, Networked. EWPN and Keen Innovation.

Endnotes

i Burton, Dawn. 1995. Women and financial services: Some directions for future research. International Journal of Bank Marketing 13(8): 21-28; Roderick, Leonie. 2017. Financial services brands ‘ignoring’ women in advertising. Marketing Week, 17 October, https://www.marketingweek.com/financial-brands-ignoring-women-ads/

ii E&Y. 2017: Banking on Gender Differences: Similarities and Differences in Financial Services Preferences of Women and Men in a Digital World; Hira, Tahira K. 2008. Gender differences in investment behaviour. In Handbook of Consumer Finance Research. Jing Jian Xiao, ed. 253-270. New York: Springer; Liébana-Cabanillas, Francisco José, Juan Sánchez-Fernández, and Francisco Muñoz-Leiva. 2014. Role of gender on acceptance of mobile payment. Industrial Management & Data Systems 114(2): 220-240; Morsy, Hanan, and Hoda Youssef. 2017. Access to Finance–Mind the Gender Gap. EBRD Working Paper No. 202.

 iii Almenberg, Johan and Anna Dreber. 2015. Gender, stock market participation and financial literacy. Economics Letters 137 (2015): 140-142; Bannier, Christina E. and Milena Schwarz. 2018. Gender-and education-related effects of financial literacy and confidence on financial wealth. Journal of Economic Psychology 67: 66-86; Driva, Anastasia, Melanie Lührmann, and Joachim Winter. 2016. Gender differences and stereotypes in financial literacy: Off to an early start. Economics Letters 146: 143-146.

 iv Morsy, Hanan, and Hoda Youssef. 2017. Access to Finance–Mind the Gender Gap. EBRD Working Paper No. 202; Servon, Lisa. 2017. The Unbanking of America: How the New Middle Class Survives. Houghton Mifflin Harcourt.

How is digital payment working for women in rural India?

PERSPECTIVES by IMTFI Fellow Deepti Kc

The Government of India is pushing its Direct Benefit Transfer (DBT) reforms by creating digital payment of social welfare transfer or pension payment directly into the accounts of beneficiaries. As the DBT rollout proceeds, the bigger question is how these payment flows work for women.

Why women? 
                           
Most cash transfer welfare schemes in India are designed for women. For example, pregnant and nursing mothers in rural India are paid from the second trimester until the child attains the age of six months. Girls from rural areas are provided with special financial incentives with an objective to encourage families to retain a girl child, educate her and prevent child marriage.  Moreover, as the government is converting fuel, food, and other price subsidies into digital cash payments, some states in India are making the payment directly to women’s bank accounts. The female head of the household, some experts believe, is most likely to optimize the subsidies—in particular food subsidies—according to the desired intent. One research study tracked how women and men spent subsidy funds deposited in bank accounts. The study found that women used the subsidy for food purchases whereas men diverted the subsidy funds to pay for non-food items. Experts therefore believe the subsidies will have the greatest development impact when the funds are transferred directly into women’s bank accounts.

But using a bank is still inconvenient for women.

Take this case as an example. Under a conditional maternity benefit scheme named Indira Gandhi Matritva Sahyog Yojana (IGMSY), cash is directly transferred to accounts of beneficiaries (pregnant and lactating mothers).  A study found the scheme failed due to cumbersome banking procedures and delayed funds flow.  Women lived in remote areas, almost 22-24 km away from banks.  Banks took almost six months to open accounts for women. Although zero balance accounts are allowed under the scheme, banks and post offices insisted on a minimum deposit.

Worse, women were required to submit identification documents. 

A recent World Bank Report indicates that women in several countries still face additional documentation hurdles when trying to get a national identity card.  Hence, their absence acts as a barrier to accessing entitlements via banks even though the requirement of identity documents is not a direct criterion of any cash transfer scheme per se.

Furthermore, social, regulatory and cultural barriers prevent women from accessing financial services.  

Several studies have indicated women find interaction with male staff intimidating and in many cultures custom dictates that women should not communicate directly with male officials. A recent GSMA study indicated that women prefer twice the number of face-to-face interactions than men before they feel comfortable enough to use financial services technologies independently.  However, with a higher proportion of male banking staff and agents, women clients experience greater hurdles to learning more about the financial products.  

Experts argue that enlisting female agents may be the most effective way to reach women. Female agents are not only effective but also lucrative as they lead to increased sales, access to new markets and a stronger brand image based on more thorough product communication.

However, in India recruiting female agents has been a daunting task. As of 2015, there are more than 600,000 agents in India. The proportion of female agents has only declined over the years (15% in 2012, 13% in 2013 and 9% in 2015).

Is the Self Help Group platform an answer?

One platform that can be leveraged to create female agents is India’s women-based Self Help Group (SHG) network. SHG is known as both a community meeting grounds and a liaison facilitating access to banks, financial literacy training, and the benefits of government programs. Typically, SHG members are already integrated into the community and a relationship of trust already exists with other members.

Recently, NABARD-GIZ conducted two pilot projects to test the potential of establishing SHG members as female bank agents, known as ‘Bank Sakhis’. This study found Sakhis attracted more first time customers, especially women. The proportion of active savings accounts and the average balance maintained in the savings accounts was three times higher for Sakhis compared to conventional banking agents. Sakhis were more motivated to provide liability products to low-income customers at low commission rates while male agents were more motivated to work with richer customers and sell more lucrative credit products. The pilot study therefore recognized that there is a need for initial funding support through subsidized loans or capital support to reduce the financial burden placed on female agents in the initial implementation phase in order to make women agents’ ventures successful.

Lastly! 

Despite the availability of initiatives and schemes to provide financial services to women, low levels of literacy and financial awareness continue to remain impediments to financial inclusion goals. A growing literature suggests that women often lack the financial literacy required in tackling the complex financial decisions they face. Financial counseling can improve women’s capability in making better financial decisions. At the same time, some experts point out that some of the responsibility lies on the provider side and suggest that providers and distributors can also benefit from financial literacy training to ensure better outcomes in their interactions with clients.

Women, Social Capital, and Financial Inclusion: Linking Customer Data with Ethnographic Perspectives

By IMTFI Researcher Sibel Kusimba−American University, Gabriel Kunyu−Independent Researcher, and Dave Mark−CTO, M-Changa

December 2015, research team with one of our participants in the IMTFI project
Photo Credit: Chap Kusimba 

Financially including women has become a priority among development and finance experts. Women are less likely to be financially included. However, it has been widely observed that when included they are more likely to produce substantial economic gains for their households. It follows then that any good financial inclusion strategy must include women (GPFI 2015). Women face barriers to inclusion due to combination of various factors such as lack of literacy, access to mobile phones or banks, and time constraints among others. What does finance mean to unbanked women? For some time now, advisers to the industry have been suggesting flexible bank hours, mobile agents, and phone interfaces in multiple languages to address these realities (GPFI 2015; El-Zoghbi 2016; Murray 2016). In this context, IMTFI’s approach to use an ethnographic perspective to understand practices of money and finance around the world can help build models for women’s finance that connect to their existing practices (Dalinghaus 2015).

M-Changa platform:
fundraising for a wedding 

Our research seeks to understand the effect of gender on networks across differences in social class, income, and rural/urban settings. In this post we focus on a customer dataset from the fundraising platform M-Changa in Kenya, which provides interesting clues. M-Changa collects money via mobile money, EFT or Paypal into a unique account and is used by originators to fundraise money for medical needs, funerals, school fees and weddings. The company provides transparency and its activities are directed towards ensuring both trust and transparency which include posting and making public on their website hospital and school bills and funeral certificates. Since its launch in 2012, M-Changa has managed over 6000 fundraisers.

A customer data analysis by FSD Kenya categorized M-Changa fundraising events into five types based on the success of the fundraiser. Among these, one cluster was distinctly successful in fundraising events and was able to raise a large amount of money over a relatively short period of time from the largest number of contributors. In this cluster the originators were 45% female – even though only 20% of all fundraiser originators in the dataset as a whole are female.  What can account for the great success of women in using M-Changa fundraising?

The M-Changa dataset finds a compliment in the findings of ethnographic study that we undertook in 2012 and 2014 focusing on the social networks of primarily farming people in western Kenya. Supported by IMTFI, the study recorded examples of informal finance groups based on friends, family, co-workers, and neighbors, and drew the pathways of money sending connecting family members. We found that money circulated among close relatives, especially siblings, who were often connected to mothers and mother’s relatives. In these networks, women tended to be central nodes in the many pathways of money sending and receiving to other network members.

Furthermore, emotional connections and powerful social norms around reciprocity and obligation often seemed to drive remittances to women in Western Kenya. For instance, consider the case of Emmanuel, an unmarried 22 year-old caretaker at a private primary school. Emmanuel was raised by his maternal grandmother Wilbroda because he was born out of wedlock. His mother eventually married elsewhere and he has eight half siblings. He dropped out of school after the eighth grade due to financial reasons.

Emmanuel (Photo Credit: Gabriel Kunyu)

Emmanuel sends money to Wilbroda every month before she even needs to ask him. In the case of his mother, however, he normally waits for her to call, which she often does at the end of each month. Emmanuel explained that normally, if the amount he sends his mother is less than her minimum expectation (say 200 shillings (US $2)), she will not call back to give thanks but instead go silent, implying she was not satisfied with the amount. He says she will sometimes call with a false excuse of checking on him, but at the end of the call inquire if he has something to send her. In May 2016, Emmanuel’s mother called and requested assistance, barely two weeks after Emmanuel had sent her 300 shillings (US $3). As a way of encouraging Emmanuel, she also called her brother − Emmanuel’s maternal uncle − who in turn called Emmanuel and persuaded him to send her money, explaining that she needed it for buying fertilizer. Because of his uncle’s call, Emmanuel said he broke into his savings and sent her 1000 shillings (US $10). Emmanuel never sends money to his father, who took little interest in him growing up and refused to pay his school fees. His remittances to his mother rely on nudges from his maternal uncle and his own sense of obligation. His grandmother is clearly his financial priority.

The M-Changa dataset, like the Western Kenya study, shows a similar advantage for women in collecting resources, as nodes and hubs of social networks. It is all the more intriguing that M-Changa women are not rural farmers, but primarily college-educated, salaried, and technology-savvy Nairobi women. Further ethnographic work with M-Changa’s clientele will seek to tease out more of the sources of fundraising skill for its affluent, urban female users. Are emotional bonds or gendered social norms around obligation to women the common factor such that these urban women leverage close ties of family? Do they have broad networks reflecting diverse social circles, in which they perhaps cultivate more or closer friendships than men? How far do these urban-centered networks extend to relatives in rural areas? Following questions like these through a thick data understanding (Wang 2013) of users − taking into account well-elaborated customer data and ethnographic studies simultaneously − can reveal otherwise overlooked insights into the ways in which women may be financially included based on their existing financial strengths.

Sources Cited 

Digital Financial Solutions to Advance Women’s Economic Participation. GPFI (Global Partnership for Financial Inclusion), November 2015. 

Dalinghaus, Ursula. 2015. Going to Where the Women are: Insights from the Making Finance Work for Women Summit in Berlin, Germany. http://blog.imtfi.uci.edu/2016/01/going-to-where-women-are-insights-from.html

El-Zoghbi, Mayada. 2016. What Excludes Women from Formal Finance in the Arab States? http://www.cgap.org/blog/what-excludes-women-formal-finance-arab-states

Murray, Inez. 2016. Catalyzing Women’s Financial Inclusion: The Role of Data. http://www.cgap.org/blog/catalyzing-women%E2%80%99s-financial-inclusion-role-data.

Wang, Tricia. 2013. Big Data needs Thick Data. http://ethnographymatters.net/blog/2013/05/13/big-data-needs-thick-data/.

Comics help women become super savers in India: see the pages

Research by IMTFI fellows Deepti KC and Mudita Tiwari part 2 featured in The Guardian Visa Partner Zone 

Deepti KC and Mudita Tiwari's  comic books to help women from low-income communities to save money features eight illustrated tales document the financial problems – based on real life in Mumbai – that the female characters face, and how they resolve crises through managing and modifying behaviors.

Comic books about characters like themselves help women in India and other developing economies learn about personal finances. Photograph: IMTFI and IFMR LEAD

"From the slums of India, two comic book heroines have sprung."
Researchers found that any tool meant to educate women about the power of a safe, informal banking channel must appeal to children and women, be respectful, and show the challenges that female entrepreneurs face when managing their income without access to convenient financial services. 

A comic book and illustrated characters mirroring these women provides the perfect, immersive vehicle. So Tiwari and KC worked with worked with Creative Rats, a design and illustration company based in Baroda, India. With its creative director, Ritesh Gohil as illustrator, the comics tell stories of two relatable characters – Saraswati, a vegetable vendor, and Radha who works at a factory making thin, crisp wafers called “papad”. Both work in a big urban slum."

View pages of the comics in Part 2 of this blogpost from The Guardian please visit:

http://www.theguardian.com/visa-partner-zone/2016/feb/03/comics-women-financial-saving-banking-education-literacy

View Part 1, "See you in the funny papers: women love comics about financial literacy" 

Full report of their research can be found here. 

Going to where the Women are: Insights from the Making Finance Work for Women Summit in Berlin, Germany

By Ursula Dalinghaus, IMTFI Postdoctoral Scholar

BMZ Berlin, Germany (Photo Ursula Dalinghaus)

On November 11th and 12th I attended the Making Finance Work Summit in Berlin, Germany, co-hosted by Women’s World Banking and the BMZ (Federal Ministry for Economic Development and Cooperation). At a time when Germany is responding to its own financial inclusion challenges with regard to integrating refugees from war-torn Syria, the agenda of closing the gap in formal financial inclusion globally could not be timelier.  

In his welcoming remarks, Thomas Silberhorn, Secretary for the Federal Ministry for Economic Development and Cooperation, began with an oft-cited quote in Germany by Fyodor Dostoyevsky, “Money is coined freedom,” noting that "access to this freedom, access to money is key” for addressing the summit topic of making finance work for women where global access to financial services is uneven and unequal between men and women.

Speakers across the panels emphasized the importance of getting to know women’s priorities as entrepreneurs and for their households. Research cited showed that women made 70% of household decisions and invested 90% of their income in the household. And yet as some speakers pointed out, the reason for the summit was the paradoxical statistical finding that women still remain largely underrepresented in, and excluded from, formal financial channels and services, from the boardrooms and decision-making entities of financial service providers, and from impact investments.

The story of women entrepreneurs who conduct business literally at the doorsteps of banks and yet do not have bank accounts was picked up by many at the summit as a powerful metaphor for showing the gap in formal financial inclusion as one not only of access but acknowledgement of a whole constellation of women’s concerns around access, empowerment, and autonomy.


"A BETA Way To Save Pilot"

A BETA Way To Save (Photo Women's World Banking) 

Several panelists also emphasized a need for financial products and services that target and reflect women’s priorities and needs, especially for saving and greater autonomy over household income. Diamond Bank and Women's World Banking's pilot study, “A BETA Way to Save,” stood out as a successful case of a commercial bank adapting to this market segment and their existing practices. Low-income self-employed women vendors in the Balogun market in Nigeria continued to rely on informal financial services for savings and short-term loans. But the problem was not only one of access; women experienced emotional distance too. The BETA Savings product moved the bank closer, physically and emotionally, to where women already are. By bringing the doorstop of the bank to the women, with regular visits by BETA agents to the market stalls, women vendors no longer faced the logistical problem of leaving the market stall to deposit savings in the bank and the time-consuming security measures this required.

In the session, How Can Technology Drive Financial Inclusion for Women, Anna Gincherman (Women's World Banking) explained how the BETA Savings pilot “developed a product that mimicked the informal sector.” BETA “replicated” the informal susu system found in Nigeria and West Africa. Adapting the informal financial practices of savings deposit schemes known as “susu,” or here “ajo" (“daily contribution scheme”), she noted that we can learn from the informal sector “in creating a better proposition by employing a sales force of ‘BETA friends’ collectors that go around every day opening accounts using mobile technologies, so it's solving that issue of mobility.” BETA (or “good”) saving accounts integrated the face-to-face interactions of agents (BETA Friends) with the opening and maintenance of accounts using mobile technologies and other financial tools.

Photo Diamond Bank

Accounts were easy to open and maintain, enabling interpersonal deposit and withdrawal transactions in addition to traditional and mobile-based channels (such as ATMs and mobile transfers). Women could check and observe how their accounts were updated in real time, building trust in the system. Women earned interest on their deposits and could enter lotteries for cash prizes and other rewards by keeping money in the system. The bank created its own platform rather than partnering with MNOs to create a multichannel hub that could provide a seamless user experience. Marketing of the project used simple everyday language rather than “bank” language and BETA agents had a variety of means available to educate clients about the product and technical use, supplemented by financial education, “BETA Talks.” BETA Friends agents were the key success factor. The technical aspects worked because human agents could explain, connect, and build trust with clients, supplementing technology with face-to-face interaction. From the provider perspective, the scale and incentives for local agents who interact with clients was an important part of the design, one that is hoped can be scaled up.

Key Takeaways
I was impressed with how the ‘BETA’ case study resonates with the findings of many IMTFI projects affirming how social relationships and new technologies work together. Eric Osei-Assibey’s related research in Ghana on Susu collectors and mobile money also showed the importance of face-to-face interaction as the basis for trust in savings and repayment strategies that could not be captured by the phone. Mobile phones and other new financial technologies reflect and remake women’s social relationships. New forms of inclusion empower women, such as making the household budget a subject of intra-household dialogue between men and women. Greater inclusion may also create new hierarchies and tensions in the household that women must negotiate anew. The importance of “the human factor” for how low income earners are adopting new technologies requires ongoing research as new products and services are designed.*

Another key takeaway for me from this panel on digital inclusion, then, is that programs like the BETA pilot which take into account these local practices may only be sustainable in the long term if they can be scaled up, and only if they can provide an affordable and reliable service for users while also making money for the bank. On the same panel, Liz Kellison (Bill & Melinda Gates Foundation) underscored that "the solution to inclusion is digital. Without it, it will not be possible to reach the necessary scale." Developing products with women’s needs in mind means they can be “accelerators” but this depends on "making sure we have the rails in place to offer digital financial services -- the rails, the rules, the regulations. As soon as we do that then we have to think about the players that could be using this ecosystem.” Kellison noted that conditional cash transfer and support programs like those in South Africa and India show how digital payments can scale up to connect governments and citizens.

This goes hand-in-hand with the rollout of identity and biometric programs that can ensure women’s ability to open and access their own accounts. Louise Holden (Master Card) reminded listeners at the summit of the startling statistic that women are not only financially but also legally excluded, with even more women without the legal identity (or in some cases eligibility to secure one) necessary for transactional banking. “Legal identity and digital identity are fundamentally linked. It’s fundamental.” Holden views Fintech as a solution and described the South African case where multiple welfare programs could be linked through technology available on and offline and provide “proof of life” identity checks necessary for pension payouts, as one example.

Worn-down fingerprints of Rickshaw pullers in Delhi 

illegible to biometric scanners (Photo Mani Nandhi/Liz Losh)

The importance of IDs for accessing formal financial services is crucial and one that IMTFI researchers have also been documenting. But like digital inclusion, the challenge is not only one of access. In India, where a national biometric ID program  (AADHAAR) continues to be rolled out, programs seeking to formally include every citizen must take into account how biometric cards pose important questions about “stable identities” or how some forms of labor erase the physical signs by which unique identities are verified.

Greater digital financial inclusion also raises new questions about data protection as a public good. In the Q&A one participant asked how end users might monitor how their data is used. Louise Holden noted that data integrity is reputation; “data allows the network to be secured.” Tom Delucca (AMP Credit Technologies) added that paradoxically, the greater a “data subject’s ability to pick and choose what data is used, the less reliable for us who wish to use it for purposes which are beneficial to you as the data subject.” Paying attention to women clients’ needs and preferences, as well as to the gendered and social relations of which financial technologies are a part, is important to answering these questions, improving design and adoption, but also observing how women are negotiating these new credit and data relations.

The importance of collaboration, partnerships, and shared incentives between commercial providers, states, and regulators was an important theme throughout the summit. Low-income women, the target segment for these entities, should be seen as a partner. In an earlier panel on targeting women as a new growth segment, Debra Mallowah (Unilever Africa) picked up the thread about “who owns the customer?” saying, “Don’t tell her you own her. You need to get in a relationship. Create the love. Understand her influence and power.”

The Making Finance Work for Women Summit generated a productive forum for fostering dialogue around client-centric design and how it is working on the ground, from different provider perspectives. I was encouraged by how the partnerships showcased across the panels, as well as the careful research being done on the ground by product developers, service providers, and analysts from a variety of institutions, are placing target communities front and center. Going to where the women are means empowering while taking seriously locally specific needs and practices in the collaborative endeavor to close the financial inclusion gap.

References

*p. 11, Osei-Assibey, Eric (2014) What Drives Behavioral Intention of Mobile Money Adoption? The Case of Ancient Susu Saving Operations in Ghana. IMTFI Working Paper

For Women’s World Banking blog posts on the summit panels, see the Women's World Banking Blog and to view panel videos from the summit, see Quick Cuts from the Making Finance Work for Women Summit 2015 

Innovative and Interactive Ways to Improve the Savings Habits of Women

by IMTFI Researchers Deepti KC and Mudita Tiwari 

Sarala is a micro-entrepreneur with a bank account and access to banking services within 1 kilometer of her residence Dharavi, Asia’s largest slum in Mumbai. Yet, Sarala uses higher-risk and unregulated savings options such as chit-funds - a type of group savings mechanism where payouts are made using a lottery system. With Sarala’s husband often spending household savings on gambling or addictive substances, she continually strives for strategies to hide cash in food jars, piles of clothes, and among beauty supplies. Despite having bank accounts, she does not want to save with the bank. “I am not able to save enough to go to bank and deposit”, states Sarala.

A woman showing where she hides her money in the kitchen 

Sarala was not alone in thinking so. In the First Phase of the study, we followed the lives of 25 women in Dharavi for two months to study women’s saving behavior. It is to be noted that many women were not open to admitting their hiding strategies unless we visited them multiple times and gained their trust. Hence, we used an ethnographic research approach to learn about their lives in their local context. Women taught us about their savings needs. We were convinced that they needed i) financial counseling to address the psychological barriers they face about savings, and ii) savings products that are flexible, offer liquidity and promote daily savings. 

Design of the financial education modules and a savings tool
The lessons we learned in the First Phase of the study inspired us to design financial education modules using an interactive comic book format depicting the life of the women entrepreneurs. The characters were carefully crafted using life stories from women’s lives - challenges that women micro-entrepreneurs like Sarala face and how they overcome these financial challenges. The comic books introduce concepts of disciplined savings, and how to achieve short-term and long-term savings goals. 

An image from the comic book

While we believed that our financial education modules would encourage women to maximize their savings, at the same time, we also learned from our previous study that financial education is not enough if financial consumers do not have access to flexible saving products. 1  

Lately, economists and researchers have experimented with savings tools beyond basic banking access. The first study of this type introduced a lockbox to respondents in a randomized controlled trial in Kenya. 2 The findings show that supplying a secure lockbox to store money increased savings by 66 percent. They also found a positive impact for women with “below median decision-making power in the baseline.” The product led to a higher “self-perception” among the participants of their savings behavior and positively affected consumption decisions on durable goods. 

With an eye to the innovative project conducted in Kenya, we decided to provide alternative savings tools to our respondents, along with financial education, to understand if the savings products could improve their savings capability.

Experiment to understand the impact of the financial products 
In the Second Phase of the study, we conducted an experiment in Bihar with 203 women who were associated with Self Help Groups (SHGs). We provided 40 women with financial education training; 40 women with a lockbox and a key; 43 women with a lockbox and a key as well as financial education; and 80 women received no intervention. 

A female respondent and her family and neighbors listen to the story on savings 

We followed women for more than two months and recorded their savings at the end of first and second months. Women who received the financial education training increased their savings by 8% compared to women with a 1% increase in savings who did not receive financial education. Provision of the lockbox further significantly increased savings by 42-51% during the intervention. 

Data indicates that women who received financial education training shared their knowledge with others too. 77% of women who received training reported sharing their knowledge with others; 73% reported discussing the household’s expenses, budget and savings with their husband; and 59% reported they encouraged their children to save.  

A woman receiving a lockbox and a key

Increase in SHG bi-weekly saving
Women were meeting with their SHGs on a weekly basis, and in every meeting the majority (87 percent) was depositing Rs. 10, a minimum required amount to be a member of a group. The average bi-weekly savings amount during the baseline survey was Rs. 20. 
After we provided women with the intervention, SHG bi-weekly saving increased to Rs. 22 after a month; and to Rs. 32 after two months. There was a substantial increase in savings in women in the treatment group - who received a lock box and financial education training, compared to women in the control group - who received no financial literacy and lockbox from us. For example, bi-weekly savings of women in the control group increased from Rs. 26 to Rs. 31 - a 16% increased in saving, whereas women in the treatment group increased savings from Rs. 20 to Rs. 33, a 39% increase in bi-weekly SHG savings.  

Lessons learned
Our results align with other similar academic studies, like the Kenyan study noted above. We learned that understanding the financial behavior of women is a very crucial and progressive step towards finding solutions to empower women in the marketplace. Women like Sarala need savings products that are flexible, offer liquidity and promote daily savings. Women cannot go to banks every day, especially if they are living in rural areas that are far away from these services. The weekly engagement with SHGs is a step forward but still amounts to sporadic savings. In most cases, they are saving the minimum ‘required’ amount to remain a member. 

When promoting savings, the psychological barriers women face when trying to save must be addressed. Our findings indicate that context specific financial education, and reinforcing saving behavior through easy-to-use tools such as the lockbox, encourages women to save regularly. For example, in our study, women were actively hiding money away in their homes to ensure other household members don’t squander away savings. Providing a secure lockbox helped women put away money safely. Providing relevant financial education helped women save this money in banks and SHGs rather than at home or through chit-funds. 

Findings from this study can encourage NGOs and public policy makers to find very simple tools to implement that can help women increase their savings by a significant amount. This kind of an intervention is not only low cost, but also low maintenance and is the kind of short-term solution that is adaptable to the lifestyles and habits of poor women in India.

References:
1. KC, Deepti and MuditaTiwari. 2015
“Can Financial Literacy Help Migrants Save More?” Funded by Institute for Money, Technology, and Financial Inclusion (IMTFI), University of California. Published by IFMR Lead.

2. Dupas, Pascaline, and Jonathan Robinson. 2013a. 
“Savings Constraints and Microenterprise Development: Evidence from a Field Experiment in Kenya.” American Economic Journal: Applied Economics 5 (1): 163-192.

Read Deepti KC and Mudita Tiwari's Project Report Innovative and Interactive Ways to Improve the Financial Capabilities and Savings of Women

Can digital savings be the path to women’s financial inclusion?

By Maura Hart, Manager, Knowledge and Communications, Women's World Banking

Cross post from Women's World Banking Blog

"Say you’re a woman living in the developing world, and you’re working to save money. In fact you’re a conscientious saver, generally squirreling away 10 to 15 percent of your earnings while still managing the household budget and frequently loaning to family members in need. Yet you have little access to formal banking, perhaps because the nearest bank is simply too far away to visit regularly."

Carol Onijeachownam with BETA Friend
(Diamond Bank, Nigeria) From Women's World Banking Blog

"A new Women’s World Banking report on digital savings, “Digital Savings: The Key to Women’s Financial Inclusion?,” looks at how introducing digital financial services for women can be a game-changing opportunity that paves the way for financial inclusion. Digital savings accounts can introduce women to formal banking by providing a convenient, reliable, confidential and secure means of saving. It’s also a win for banks: convenience boosts account activity rates which allows banks to get to know clients’ risk profiles. Reliability, confidentiality and security also builds trust among women who tend to be more loyal and reliable customers. But financial institutions must tread carefully—success depends on approaches that fully take into account women’s needs."

"This report outlines Women’s World Banking’s research into the landscape of digital savings for women and emerging best practice in the space."

How to address the stubborn gender gap in banking across the globe

New Guardian report on gender and economic empowerment

"Despite Herculean efforts from nonprofits, banks and economists, the gender gap between male and female bank account ownership persists."

With the help of Women’s World Banking, Nigeria’s Diamond Bank 
launched a savings account so women in Nigeria can open 
a savings account using mobile phones. Photograph: Johnny Greig/Alamy

"Women who open a bank account gain greater economic empowerment, save more for things such as health emergencies and their children’s education, and purchase more nutritious food. So says Leora Klapper, a lead economist in the Development Research Group at the World Bank. Yet, while nonprofits, banks, and researchers have made serious strides, the data convincingly (and discouragingly) still shows far fewer women than men own a bank account and far fewer women than men use formal credit."

"The numbers show the truth. The 2011 Global Findex Data (which Klapper co-authored) reports 97% of adults in the United Kingdom possess accounts and equally between men and women. In other developed countries, 90% of men and women possess a bank account. In Nigeria, however, where 33% of adults possess an account, only 26% of account owners are women. Even within the richest 20% of earners in developing countries, a striking 9% gender gap in bank account ownership remains."

Mary Ellen Iskenderian who heads Women’s World Banking, discusses a nonprofit working with banks in developing countries to bridge the gender gap, says part of their work is convincing financial service companies that women are indeed excellent clients. “With small tweaks, specific to design and marketing, banks can easily tailor their products to women,” she says.

Read the full post by DG McCullough here.

Mobile Money Services and Gender Empowerment in Eastern Kenya

By IMTFI-funded researchers Simiyu Wandibba, Stevie M. Nangendo & Benson A. Mulemi

Photo by Victoria Muinde

In the study on mobile money and gender empowerment in Eastern Kenya, Prof. Simiyu Wandibba, Dr. Stevie Nangendo and Dr. Benson Mulemi examined the consequences of mobile financial services for financial inclusion and socio-economic development. The study revealed that attempts to offer access to mobile payment services in Machakos County provoked gender empowerment ambiguity among, rural and peri-urban users. Mobile payments empower men and women economically but also cause issues in gender roles and relations. Marginalized poor people, particularly women, have been empowered economically by mobile financial services, but this could threaten harmonious gender relations on which sustainable socio-economic development can be built. In fact, the study confirms the findings of other ethnographies which indicate that financial inclusion initiatives in East Africa today do not benefit men and women equally. While initiatives for financial inclusion for economic livelihood are imperative in Kenya and the rest of East Africa, product developers need to promote gender sensitive financial services drawing on available ethnographic studies. Available ethnographies indicate that social and cultural factors may hinder individual men and women’s realization of financial inclusion, socio-economic empowerment and overall societal well being that depend on indigenous mutual trust in gender relations and kinship as well as general gender roles.

Photo by Victoria Muinde

The local livelihood in the study area derives from subsistence agriculture and small-scale businesses in numerous open air markets on designated market days. More women than men run the small-scale businesses and receive support from their men kin who work in the neighbouring Nairobi City County and other urban areas in Kenya. Numerous non-governmental organizations support women-in-development and gender-and-development initiatives in the Eastern County; this provides strong foundation for mobile financial services. As expected, the mobile money transfer (MMT) and mobile financial services (MFS) in Machakos County tend to benefit women more than men, hence the services have contributed to overall economic empowerment of the local women.

Those who use MMT services in the study area gain comparative advantages in micro-entrepreneurship, domestic maintenance, and payment of school fees and various domestic bills. MMTs increase accessibility to money and financial services and the growth of different businesses by allowing money to circulate more easily.

Photo by Victoria Muinde

While the study found no significant differences between men and women with regard to the use of mobile phones to receive money, the results indicate that women made more withdrawals than men. On the contrary, men were more likely to participate in m-banking, as more men than women said that they owned mobile telephone handsets and had some financial saving literacy. Ownership of telephone handsets determined the use of mobile money transfer and m-banking subscription. Inconveniences such as a lack of identification documents would affect the registration and subscription of both men and women differently. More women than men said that they received money through the mobile money transfer facilities for small-scale business and family maintenance. Owing to the demographic structure in rural and peri-urban divisions in the study area, women are more likely to receive money via MMT than married men, sons, married daughters and other relatives who live away from home. Therefore, more women in the study area accessed more money and controlled their financial resources more than they used to before the introduction of MMT services. This study confirms that MMT and MFS boost women’s participation in household livelihood needs. However, the ethnographic results indicate that MMT and mobile telephone services may not contribute to sustainable financial inclusion and saving practices, contrary to what many people know and the emerging popularization of MMT and MFS in this regard. Spending and transfer of money via MMT platforms facilitates social investment rather than saving for sustainable financial inclusion.

MMT services should consider programmes that can balance financial and social benefits of the mobile financial inclusion technology. Overall, MMT services contribute to the economy of affection by strengthening kin and non-kin social bonds and relations, especially through reciprocation of material and non-material support. However, the study participants' ambiguous relation with MMT and MFS proved that they could strain gender relations and cause high rates of abandonment of gender responsibilities.

Click here to see the full report on Gender Empowerment in Eastern Kenya.