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. However, 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. To make matters worse, the COVID-19 crisis caused unprecedented job losses, hitting women the hardest, further widening gender gaps. Women do not enjoy the same access to financial services as men. Even before the pandemic, fifty-six per cent of all those without a bank account were women – meaning that nearly a billion women are unbanked.

There is also a gender protection gap, with fewer women using insurance than men. Equal access to insurance is important so that women can take advantage of risk management solutions, including business insurance for women-led enterprises.

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. The ILO financial education programme has benefitted thousands of women, including in Argentina (see video), Egypt, Morocco, Peru and Tunisia.
  • 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”.
  • WE-Check Guide for financial institutions: Together with the ILO Women's Entrepreneurship Development (WED) programme, Social Finance is promoting the use of the Women’s Entrepreneurship Self-Check (WE-Check). 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.
  • Global Centre on Digital Wages for Decent Work: The Global Centre seeks to enable women and men workers around the world to have better control over their wages and benefits and effectively use responsible (digital) financial services for better income security, resilience, and economic opportunities. It promotes transition to responsible digital wage payments through gender-responsive research, knowledge management, advocacy, and wage digitization activities in Cambodia, Indonesia, Peru, and the Philippines, in partnership with governments, employers’ and workers’ organizations, and the financial sector. This video highlights how the transition to digital wage payments in the Cambodian garment sector has enabled women workers to save more easily and safely using a mobile banking app. The Global Centre also supports small entrepreneurs, including women entrepreneurs to digitize their payroll with a view to improving business efficiency, productivity, and facilitating a greater access to financial services.
  • Making finance work for refugees, internally displaced and host communities: This programme supports financial institutions to improve the access of forcibly displaced women to their services, using a gender-responsive lens and highlighting forcibly displaced women as a profitable market segment. Social Finance documented the experience of Microfund for Women (MFW), an organization that provides sustainable (non-)financial services to low-income (female) entrepreneurs in Jordan. This brief showcases the broadening of MFW’s product portfolio to meet the needs of refugees, MFW has been more exposed and familiarized with the new client segments and learned how to serve them effectively.
  • Financial inclusion of women in rural India: Access to finance remains challenging for women in rural India. The “Digital sakhi” (digital friend) programme, launched in 2016, offers a model combining inclusive development with digital finance in India. Our blog gives more details about the success of the programme.

Women and inclusive insurance

Besides considering how women manage money and take advantage of business opportunities, the ILO also considers how they manage risks:
  • 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 focuses on reducing the gender protection gap. Under the partnership, we organized two webinars in January and March 2021, and launched a community of practice (CoP) to better service the women’s market in April 2021. Each CoP runs for a year and we are proud to have launched a second cohort of the CoP in March 2023. This new cohort beings together 18 new insurers and insurance industry participants that were carefully selected after a competitive application process.
  • Pioneering the “Caregiver Policy” with MicroFund for Women (MFW): In addition to MFW Jordan’s outreach to refugees, Social Finance has also worked with MFW on health insurance. 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).
  • 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.
  • Insurance outreach to women in rural India: Insurance outreach to vulnerable and excluded farmers requires a carefully thought-out approach. In India, the People's Education and Development Organization (PEDO) found that members of women’s self-help groups can become powerful advocates for insurance within their communities. This Case Brief shows PEDO’s work on providing agriculture support and advice to the community through their “Krishi-Sakhis”.

Gender and the ILO

Across the ILO, there is a broader agenda to tackle gender inequality. The Gender, Equality and Diversity & ILO AIDS Branch (GEDI), 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. Important outputs include a quick guide for financial and business development services providers on gender-inclusive service provision. A webinar on 8 March 2022 shines a light on the role of financial and business development service providers in unlocking women entrepreneurs’ potential.