By Fatima Iqbal, WAM UK Steering Committee Member
On September 26, Women Advancing Microfinance and the Financial Inclusion Forum hosted a panel with Maria Largey, CDC, Isabelle Nowack, VisionFund, Susan Forester, Global Parametrics with Adrienne Klasa, fDi and The Banker, moderating the discussion. The aim of the panel was to discuss the increasing risks that populations face from disaster events, be they climate change related, conflict related or otherwise. Women are more likely to experience poverty and be excluded from mainstream financial products than men, and as a result are often more vulnerable in disaster situations. The panel discussed tools that promote resilience and productivity in women in the face of shocks and disasters.
It’s important to understand women’s challenges in various markets, before tailoring and offering the right solutions. Promoting financial resilience, through literacy and insurance, can be a useful buffer for these shocks. Prior to the panel, the audience had the chance to learn about CDC’s new partnership with six development finance institutions to promote the 2x challenge, aiming to invest nearly $3 bn by 2020 in addressing this issue.
What are some factors that create the gender financial inclusion gap? The panellists highlighted cultural barriers, the quality of jobs for women and inadequate solutions. In periods of external shocks, women may have to return to paid employment where they can face discrimination, fuelling an imbalance. Also, the issue isn’t always viewed from a gender policy lens. Governments, investors and companies all have important roles to play, yet they disregard the challenges.
To close this gap, Maria suggested a combination of financial literacy programmes and more tailored financial and insurance products, with the former beneficial in the short-term and the latter in the long-term. She also talked about the need for those in the industry tasked with selecting clients to be more educated on women’s needs – when this issue first started coming to the fore, institutions set gender quotas on their customer base and used gimmicks such as pink credit cards to attract more women, but the products weren’t always right. Institutions need to think more about women’s cash flow patterns, their access to branches, cultural sensitivities, and this level of awareness has to occur across the supply chain.
Susan highlighted that since the launch of the UN’s Sustainable Development Goals, six of these goals include gender-specific targets, giving more significance to solutions with women in mind. This differentiates the goals from the Millennium Development Goals, and is also applicable to all countries, not only emerging markets.
The percent of women excluded from formal banking products, from saving accounts to cards, is still higher than men. Isabelle proposed increased mobile distribution, as another solution to foster inclusion. Yet, even if more women had access to these products, it can be argued that the metric of accessing a bank account is insignificant; women could have this on paper but never use it, or, men could be in control of the account. Isabelle also explained that VisionFund has implemented a deliberate policy to hire and train women, particularly respected women in a community, to become loan officers as they are more likely to understand the needs and concerns of their female customers – for example they understand the challenges of bringing up a family – and can act as a good sounding board for their customers, where a young male graduate (the profile of a typical loan officer in the field) is less likely to have that empathy or understanding. VisionFund is also asking its microfinance institutions (MFIs) to use questionnaires more often to find out what customers need – this is partly driven by the need to be more segmented with product offerings, as disrupting technology makes the sector increasingly competitive – but this can be good for women also if their needs are recognised.
The panel also spent some time discussing the best way to address increasing risks from Climate Change and other disasters. Susan from Global Parametrics felt that more needs to be done to help local communities think through and plan for disasters before they even happen and put in place mechanisms that will simply kick in when disaster strikes when relief needs to be immediate.
Global Parametrics is focused on microinsurance products that will automatically payout given proof that certain weather events have occurred. Susan explained that proof of loss in an extreme weather event is very difficult – traditional crop insurance for example is very expensive to run as officers on the ground have to check and verify, which may put off many MFIs. But if the MFI knows they simply have to check if a local weather station has validated certain events or ‘parametrics’ and they know they will be paid by the underwriter/ funder in those situations – then the whole arrangement can operate well. When challenged on whether enough gender consideration is undertaken with these products (for example, how easily can women access or claim payout in the specific cultural context) Susan agreed that microinsurance institutions and investors should think more about this issue when developing products.
Bringing the discussion back to the challenges, the key is to identify unique challenges faced by women in different markets and then find the right solutions. For example, if the issue is that women are unable to visit a bank, then loan officers could visit their homes. If the gender of loan officers poses a problem, then more women can be trained for the role. Simple questionnaires are a great way to get this information.
Two country examples provided more context on products and policy during the discussion:
- In regards to microfinance emergency loans, the example of Typhoon Haiyan in the Philippines was given, where more liquidity was offered to affected areas, with the provision of extended recovery loans.
- In terms of cultural change, the example of a new policy in Pakistan was provided, where banks have incorporated gender quotas on their boards. Change is needed at a policy level, and this isn’t evident only in emerging markets, but around the world.
During the Q&A session, the panel advocated that everyone can raise awareness on gender disparity and be more mindful about the issues faced by women. A more holistic approach is needed to make an impact, with governments, investors and companies driving the development agenda.