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> Posted by Danielle Piskadlo, Manager, Investing in Inclusive Finance, CFI
#170412017 / gettyimages.com
I have written in the past about some of the advantages of having women on boards, including research correlating women on boards with better bottom lines. I recently came across a fantastic piece published by the IFC, Women on Boards: A Conversation with (Male) Directors, which does a wonderful job of explaining more precisely how women add value to boards. Here are a few quotes from the male directors that contributed their thoughts to the publication.
- “When women are at the table, there is less joking around and more objective discussion. I’ve also found that women tend to be more sensible and more thoughtful. I think they care much more about how decisions made in the boardroom will impact people.”
- “Diversity brings more energy to the boardroom.”
- “Women provide good balance. The dynamics change because women are more willing to give the other side a chance than men.”
- “Women are more strategy oriented. They tend to look at where the company is heading, whether things are on the right track, and why the company might be diverging from its strategic goals.”
- “Women are more likely to be conservative and more attuned to good risk management. I don’t think they are more risk adverse but they have more of a long-term and sustainable approach to issues and less short-termism.”
So, how do we get more women on boards? All hands on deck.
> Posted by Zahra Khalid, Social Analyst, Pakistan Microfinance Network
#94952246 / gettyimages.com
Pakistan’s financial sector is due for some client-centric changes. Over the past decade there has been rapid growth in consumer lending as well as an increase in the number of households that have taken on risks and obligations that they do not fully understand due to unfair and deceptive practices coupled with low levels of general and financial literacy.
These trends make the World Bank’s recently released industry-wide diagnostic review of the state of consumer protection and financial literacy in the country all the more relevant, and its recommendations targeting irresponsible practices, such as inadequate price disclosure, gender-based discriminatory lending practices, and lack of dispute resolution mechanisms, increasingly important. Offering key findings, recommendations, and comparisons against World Bank-developed best practices, the review is the first to cover the country’s legal, institutional, and regulatory framework from the consumer protection angle.
> Posted by Karen Firestone, President and CEO, Aureus Asset Management
The following post was originally published on the Harvard Business Review Blog Network.
Financial services firms want to reach more women; so I conclude from data presented by Pamela Grossman of Getty Images at SXSW this year. According to data collected by Getty, financial firms are buying 20 percent more stock photos of women today than they were five years ago. At the same time, the share of men shown in their advertising has declined.
Of course, we live in a wildly diverse world; we want to be inclusive and broad-minded ourselves; and we therefore want our providers of financial advice, energy, and technology to reflect those values. We prefer Morgan Stanley or Citigroup to be talking to all of us, showing us that they have transcended their traditional, mostly white and male clientele. According to Chris Edwards, former Group Creative Director for Arnold Worldwide, we also want visual evidence that the professionals at these firms are as diverse as the clientele they seek. Advertising images reinforce and extend these efforts.
Financial institutions portray women today as competent and self-confident, and often feature attractive, middle-aged advisers talking to couples in which the woman is similarly well dressed and clearly attentive. According to Dr. Emma Firestone, who has studied the audience perception and response to images and words in media and entertainment, from a cognitive perspective, “It makes sense for advertisers to present women as strong, well-educated consumers. This is appealing to women who see an attractive self-image reflected back at them, and to men, who are flattered by the idea that smart, self-possessed, and financially secure women are their own life partners.” Men are much more likely today, than decades ago, to be comfortable with and appreciate their spouses as full partners in their own financial decision-making – at the same time, imagery of supportive female financial advisers plays into comforting stereotypes of the woman-as-helpmeet, perhaps humanizing an industry consumers view as confusing or even threatening.
> Posted by Amanda Lotz, Financial Inclusion 2020 Consultant, CFI
Tomorrow, people around the world will celebrate International Women’s Day. In honor of the day, and the tremendous impact that financial services can have for women, we’d like to highlight some of the top resources from the past year that focus on financial inclusion of women. Though there are many great resources out there, below are a few that have caught our attention.
1. Findex Notes: Women and Financial Inclusion
Drawing from the Global Findex Database, the World Bank and the Bill and Melinda Gates Foundation created a briefing on the state of women’s access to and use of financial services globally. It’s a concise snapshot of financial inclusion data on women. It highlights gaps that persist for women, as compared to men, globally and across regions. It looks at variations in account ownership for savings and credit, as well as barriers to usage identified by women. And if you’re looking for more, I suggest exploring the Findex database or the CFI Data Explorer and conducting your own analyses!
2. Promoting Women’s Financial Inclusion: A Toolkit
DFID and GIZ on behalf of the German Federal Ministry for Economic Cooperation and Development prepared a toolkit aimed at policymakers, donors, and NGOs who want to learn how to design and implement programs to enhance the financial inclusion of women. It provides insight into factors that contribute to financial exclusion of women and offers recommendations to address access barriers. In addition, the toolkit provides methods for client segmentation as well as several illustrative case studies. Rather than suggesting focusing on women exclusively, the toolkit also recommends understanding the distinct needs of men.
> Posted by Dr. Susan Johnson, Senior Lecturer in International Development, University of Bath
Recent research has given us much better data on the difference in access to formal financial services between men and women. The figure below gives these gaps by region based on the Global Findex dataset. With this evidence for the gender gap, what we really want to know is: what is it about being a woman or man that creates the gap? That is, are these gaps the result of factors such as women having less education, lower incomes, and being less likely to have formal employment? Or do they arise from legal factors such as property rights, inheritance rights, gender norms about autonomy, mobility, etc.? Or, perhaps women behave inherently differently and are more risk averse. Or does being a woman matter for another reason, even when all these factors are taken into account? If it does, then we might need to look further for other sources of discrimination in the market. These might include the behaviour of the financial institutions themselves.
It is possible to use specialist techniques to find out whether gender matters when other variables, such as education and income, are controlled for. If the gender variable (also called the gender dummy as it is a variable in the equation that only takes a value of one for a woman or zero for a man) is statistically significant when all of these factors are included then it suggests that there is still an aspect of gender at work that the other variables have not accounted for. Recently economists have been using these techniques on data sets about access to financial services to find out whether being female matters for access. But, here’s the rub. We seem to be getting rather different results.
> Posted by Jaclyn Berfond, Senior Associate, Network Engagement, Women’s World Banking
Women have long been the face of microfinance, a fact reflected by the mission and goals of the institutions that serve them. According to the Microfinance Information Exchange (MIX), most microfinance institutions (MFIs) claim to target women (74 percent) and just over half declare women’s empowerment or gender equality as an objective.
Big commitments are all well and good, but if we are going to espouse the importance of serving low-income women, we must be able to hold ourselves accountable. How do we do that?
For many years now, the microfinance industry has focused on financial performance, with sustainability and later profitability driving outreach. In the wake of crisis – often the consequence of rapid growth – the industry has re-focused on social performance, getting back to the basics of ensuring that financial institutions adhere to their mission of serving low-income clients. We strongly believe that there must be a balance between financial and social performance, and that in order to achieve either, the industry must take a good look at their clients – still predominantly women. By truly analyzing this client base, MFIs can both build the business case for serving women, and ensure that they are serving these women well. This is gender performance.
In 2011, Women’s World Banking launched the Gender Performance Initiative (GPI) to develop a framework that defines what it means to serve women and measures how effectively MFIs do so. We wanted to establish a set of indicators that would enable MFIs to consider not only how many women they serve, but how they can enhance their understanding of customers to tailor products, marketing strategies and delivery channels to meet women’s needs. The initiative also set out to demonstrate the benefits of financial inclusion for women and their households, as well as the benefits of gender diversity among staff, management, and board.
Developing the indicators. There is no easy place to start when it comes to measuring performance, and we wanted to be sure that the metrics we chose would truly tell us whether an institution was serving women well. First and foremost, we needed to start with the right questions, in the areas that matter most to women. Beyond outreach, we looked at product design and diversity, service quality, and client protection, as women have specific life-cycle needs and goals that must be considered. For example, women may need a convenient and confidential way to save for children’s education expenses, or an insurance product that offers cash benefits for hospitalization to cover lost income from time away from their business (and includes maternal health coverage). We also looked at the diversity of staff and management, because we believe that in order to be the best place for women customers, a microfinance institution should be a place that welcomes women employees and women leaders. Finally, we wanted to understand how serving women clients contributes to institutional financial sustainability, as well as outcomes for clients.
> Posted by Alex Counts, President and CEO, Grameen Foundation
The Financial Inclusion 2020 Global Forum was a remarkable and historic convening. I was honored to have been invited to attend and co-facilitate an “ideas to action” roundtable about one of the five parts of the Roadmap to Financial Inclusion .
Immediately after the event I reached out to Elisabeth Rhyne to understand how I could help build on the groundwork laid at the conference. She suggested I write a blog post about my experience. My immediate reaction was that commenting on such a wide-ranging and successful effort was a bit daunting. But I felt it was worth a try.
Dissecting the Term “Financial Inclusion”
I will admit that I have warmed slowly to the language of financial inclusion and financial capability. Are these just new buzzwords for time-tested concepts? (And if so, why use them?) Let’s assume they are new concepts. If so, financial inclusion feels like more of a means than an end. For me, the end is the reduction of poverty and the empowerment of low-income women – so why not focus on those? If having a poor or even middle-class person simply open their first “no frills” bank account is considered a step towards financial inclusion, regardless of how useful or helpful that bank account is, is this banner a lackluster one to rally under? Further, it is not clear to me that the provision of quality financial services through informal financial institutions (however defined) is being properly valued in the financial inclusion agenda. Finally, does making “financial capability” something of a prerequisite for people accessing formal financial services effectively let financial institutions off the hook for meeting clients where they are and designing appropriate products for them?
While my apprehension about these concepts has not entirely dissipated, I emerged from the Global Forum feeling that this campaign for full financial inclusion, at least as defined by CFI, is evolving as a powerful rallying point for a diverse coalition of providers, regulators, technologists, researchers, and activists. The notion of full inclusion is essential. I now see financial capability as a concept that defines the end state when financial education (through whatever means) is done effectively. The Forum probably had a similar impact on many others – helping them travel from a place of confusion or even wariness towards strong alignment and shared purpose.
> Posted by Center Staff
The FI2020 Global Forum in London gets underway this Sunday with a pre-Forum side meeting on financial inclusion for persons with disabilities (PWDs). This client-centric start feels like a fitting precursor for an event to expand financial inclusion.
Financial inclusion requires that financial services meet the unique needs of all clients, especially the needs of the most underserved and vulnerable client groups. Sessions throughout the Forum reflect this key tenet. In addition, there are side meetings on the Financial Capability Roadmap and the Consumer Protection Roadmap, focused on moving these roadmap principles and recommendations to action. These and the other three financial inclusion roadmaps were developed through a consultative process that collected and incorporated the perspectives of specific client groups.
Among Forum participants are representatives of various client segments – such as PWDs, women, the elderly, youth, rural populations, and migrants – to help raise awareness of their unique needs and assets. Here’s a collection of pertinent statistics for financial inclusion on these client segments:
Youth:
- 1.8 billion of the world’s population is between the ages of 10 and 24
- 87 percent of youth are concentrated in the developing world
- About half the world’s youth report being economically active
- 38 percent of young adults have an account compared to over 54 percent of older adults
The Elderly:
- In 1950, globally, 1 in 20 people were elderly. By 2050, it will be 1 in 5.
- In 2000, only 6 percent of people in less developed countries were over 65 years old. By 2050, that number will grow to 20 percent.
> Posted by Lisa Kuhn Fraioli, Independent Consultant
When Meri was first interviewed by Freedom from Hunger for its impact stories research in 2008, she was a classic microfinance success story. This hard-working mother of five from Huancayo, Peru had a successful business buying grains in the local market, milling them, and processing them into a type of custard that she then sold in Lima at a good price. The loans that Meri received from her local microfinance organization allowed her to buy more grain, invest in new products, and transport them for sale in Lima. The loans had helped Meri grow her business beyond the subsistence level for the first time. She now had a profit that she invested in food, healthcare, and education for her children.
When interviewers returned to Meri in 2011, the story had turned into a tale of desperation and distress. Now, Meri says, “I try to sell underwear and socks, but it almost never goes well. We are hungry. Sometimes there isn’t enough food. It’s very rare that we buy meat, and what I prepare, I give to my daughters and hope that my husband brings something to eat.” She is no longer able to send all her children to school. What happened to Meri?
After the birth of her fifth child, Meri suffered an internal hemorrhage and was hospitalized. The doctor warned her that her condition was very delicate and that she could no longer make the eight-hour trip to Lima to sell her products. Unable to travel, she reluctantly shut her business down. Meri’s family’s sole source of income was now the few soles that her husband brought in as a shoeshine. Meri owes the hospital for her emergency treatment and used money from her business loan to help pay for it. Then she borrowed from a bank, the municipality, and two more microfinance organizations. Meri can’t find any new business that gives her stable income. Meanwhile, her debts weigh upon her heavily. She is still in pain, but she can’t afford the 15 dollars it would cost for an ultrasound. She says, “It seems that the stress is accumulating in my stomach. Every day it hurts me as if the anxiety were taking away my potential.” Meri, overdebted with no means to repay her loans, is now effectively excluded from the financial system as a poor credit risk. She is still struggling to get back to the economic position she was in 10 years ago. She needs to develop a new business, one less dependent on traveling, but she will have to do so without any help from microfinance.
> Posted by Jeffrey Riecke, Communications Assistant, CFI
Today, people around the world are celebrating World Population Day, a day that seeks to bring attention to the importance of population issues in the context of development. The focus of this year’s event is adolescent pregnancy, with the aim to catalyze progress in securing a world where every pregnancy is wanted, every childbirth is safe, and every young person’s potential is fulfilled.
There are currently roughly 600 million girls globally ages 10 to 19, 500 million of whom live in developing countries. Each year, 16 million teenage girls give birth, and an additional 3.2 million undergo unsafe abortions. Even though 90 percent of these teenagers giving birth are married, they still experience conditions contributing to challenging pregnancies: inadequate education, sexual coercion, violence, rights violations (including child- and forced-marriages), and gender inequality. In addition to lesser hardships that can come from unplanned or uninformed pregnancies, complications from pregnancy and childbirth are the leading cause of death among girls ages 15 to 19 around the world.
The United Nations is calling for commitments from countries, communities, and individuals to support the provision of quality education for girls from primary school through adolescence, including age-appropriate, comprehensive education on sexuality and health. It’s been found that when a girl is educated, she is more likely to marry later, have children later, have healthier children, and earn a higher income. The UN also emphasizes the necessity for comprehensive sexual and reproductive health services. Other areas that demand examination are the legal systems surrounding marriage (including minimum marriage ages) and women’s rights.
As we have posted about previously (see here, here, and here), the low level of financial inclusion among youth is a missed opportunity to contribute to their well-being. Starting youth out with financial services can be a good investment. A New America Foundation study suggests that instilling a habit of saving among youth sets them on a course for a lifetime of financial capability. According to Youth Economic Opportunities, girls who are less financially dependent are at lower risk for negative effects of early pregnancy and child bearing. In a recent World Bank paper on gender equality and development, it was found that lack of agency (that is, a person’s capability to advance goals she values) is a key factor driving poor reproductive health outcomes among women generally. For example, women in Bangladesh who had more decision-making power were more likely to access prenatal services and skilled birthing accommodations.
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