LIVE FROM GSMA MOBILE 360 INDIA: Efforts to narrow the gender gap in financial services are most successful when they target bringing women into the workforce rather than trying to change engrained cultural barriers.
This was one of the key themes discussed during a panel on ‘Accelerating financial inclusion for women’ at the event on Tuesday.
Rohit Krishna, from Vodafone mPesa India, explained that when women start to earn independently, it gives them the right to own a phone. “We could work on this with financial literacy, trying to break cultural barriers. But it’s often more difficult than trying to include them in economic activities, which typically breaks barriers much faster.”
Vodafone has seen this not just in India but in other countries like Turkey and Tanzania.
Abhishek Agrawal, Accion’s country director for India, agreed that the key is empowering women by including them in the labour force, noting that micro finance is one of the best ways to create flexible jobs and reduce the gender gap.
Low participation rate
Based on a recent Findex survey, there have been significant gains in financial inclusion, with 700 million new people joining financial services since 2011. But when looking at it from a gender perspective the “picture is not that rosy”, said Smita Aggarwal, director of financial inclusion at Omidyar Network.
The participation of women in formal financial services in South Asia is extremely low, with 62 per cent of women in India not having a bank account or not actively using one. That translates to 280 million women — one out of four of those excluded in the world is from India.
Only 27 per cent of women in India are in the formal workforce.
When looking at why woman should be included, she said it not just because it’s the right thing to do, but it’s a huge untapped business opportunity for the financial sector, with the potential to unlock $40 billion of saving account balances in India alone if women were on par with men.
Aggarwal said that it’s not the case that banks are actively discriminating against woman. “There are different processes that actually push woman away. For example, the messaging from banks is that small is not welcome, which is a problem for women since 80 per cent don’t have a regular income.”
The digital divide on mobile phone ownership is even higher, she said. There’s a 35 per cent gap, which means 250 million women in India don’t own phones while 125 million men don’t have phones – half as many.
The panelists agreed that while affordability is a barrier, the social, cultural, literacy and educational factors are often more difficult to tackle. Because phones are often associated with entertainment — games, music, videos — many women aren’t exposed to the full capabilities of a mobile phone and how it can be used as a life-enhancing tool.
Aggarwal said it’s important to showcase the capabilities that can be used for education, financial services, health and many other things.
A literacy issue
Chandni Ohri, CEO Grameen Foundation India, pointed out that even when women do have access to a phone, many times it’s a shared resource with the extended family. She noted that digital literacy is a major issue holding women back from trying to use even basic financial services. “They are scared of making a mistake and losing money.”
Krishna said Vodafone has found that families in rural areas typically have two phones: one for the chief wage earner and one for the household, which is shared.
Given the rapid rise in mobile penetration, Accion’s Agrawal said it’s time to tie financial literacy with digital literacy. “The more digitally literate people are, the easier it is to spread the other message.”
Aggarwal agreed there is a huge opportunity to dovetail financial services inclusion with mobile inclusion because a lot of things are common to both.
Krishna said that owning a phone changes the life of that person as well as the children in the family, especially if it’s a woman. “You can fight it socially or culturally, but we found that the best way to fight it is economically.”