27 November 2020

Financial inclusion for women’s economic empowerment


By Dr. Alfred Hannig, AFI Executive Director

As a member-based and owned network of financial regulators from close to 100 emerging and developing countries, one of AFI’s key priorities is gender inclusive finance and leadership diversity. By endorsing Denarau Action Plan (DAP) on gender inclusive finance in 2016, our members committed to narrowing down the gender gap and promoting female leadership in their own jurisdictions. Our work has shown that financial inclusion is one of the key enablers of women’s economic empowerment, which is also known to reduce women’s exposure to violence. Endorsing and implementing the DAP therefore produces broader impact outside the defined remit of financial regulators.

In line with W20’s policy focus which recognizes financial inclusion as a key factor to financial independence, women become more confident and capable to make informed decisions and manage their finances effectively when they are in control over their own financial access and resources. While playing a crucial role in facilitating women to earn their own income, own assets, increase their bargaining power both at home and in public spaces, financial inclusion also contributes to development of women’s self-esteem by disrupting traditional gender roles and expectations.

Guided by the Denarau Action Plan on gender inclusive finance, the Kigali Statement on accelerating financial inclusion for disadvantaged groups, as well as the objectives of the Sustainable Development Goals (SDGs), AFI member institutions are at the forefront in adopting polices for increased access to affordable and quality financial services for women and closing the nine percent global financial inclusion gender gap within their respective jurisdictions.

The ongoing COVID-19 pandemic has not only amplified the financial and economic inequalities faced by women, but also highlighted how these disparities can lead to the disproportionate risks of further exclusion for them. AFI’s recent Special Report underscores the need for economic responses to COVID-19 to be financially inclusive and gender sensitive. Focusing on building an inclusive economic recovery, the report also illustrates how loss of employment, employment restrictions, movement controls and other forms of ‘lockdowns,’ can expose women and children to a greater risk to domestic violence.

In order to bridge the barriers faced by women in these difficult times, AFI member institutions have turned to digital financial services (DFS) to provide safe, secure, efficient, and affordable access to women. In Pakistan, the federal government launched Ehsaas, a poverty alleviation system which provided unconditional cash transfer payments to 12 million families, or 80 million people, majority of whom are women.

Social protection mechanisms aimed at safeguarding women’s financial sustainability is another area that has benefited from the use of DFS. Through a digitalized alimony payment system brought forward by the Central Bank of Egypt in conjunction with Egypt’s Ministry of Social Solidarity, digital wallets were offered to over 60,000 women to receive alimony in a convenient, fast, and secure way.

The use of DFS to bridge the gender gap is not new to AFI member institutions. In 2007, the Central Bank of Kenya adopted a ‘test and learn’ approach to regulation which resulted in the enactment of the National Payment Systems Act in 2011 and the issuance of guidelines for the provision of electronic retail transfers and e-money in 2013. As a result, by 2016, there were 15.1 million people using mobile financial services compared to 8.1 million using traditional accounts in the country. Furthermore, the number of women account owners outnumbered men by 22 percent at 9.2 million holders.

On a global scale, many barriers remain in the way of women’s financial inclusion. One of these areas is a proof of identity for women. According to World Bank Women in 2018, in 11 different economies, a married woman cannot apply for a national identity card in the same way as a married man. In addition, women still cannot legally apply for a passport the same was as men can in 37 countries, and in four countries, women cannot legally register her own business the same way men can.

Recognizing that some segments are unable to meet KYC requirements due to the lack of identification documents, the Central Bank of Nigeria, through its National Financial Inclusion Strategy, introduced an explicit target to increase the percentage of the population with IDs to meet KYC requirements. Other AFI members working on allowing flexible or simplified identification requirements include Bank of Tanzania and Comisión Nacional Bancaria y de Valores (CNBV) in Mexico.

Advancing women-owned and women-led businesses through gender-sensitive policies is another area where AFI member institutions are leading the way for women’s economic empowerment. The Reserve Bank of Zimbabwe played an instrumental role in developing a National Financial Inclusion Strategy to not only increase access to affordable and appropriate financial services, but also to increase the proportion of banked adults focusing primarily on women, youth and small-scale agricultural communities. The central bank also established USD501.1 million in empowerment facilities for on-lending to micro-, small- and medium- enterprises (MSMEs), women, youths, and small-scale farmers at concessional terms. As a result, direct loans by women from the banking sector grew from USD310.78 million in December 2017 to USD432.36 million in December 2018, representing an increase of 39.12 percent.

Elsewhere, Malaysia has introduced a Women Entrepreneur Financing Program aimed to  develop knowledge and skills to sustain and grow women-owned businesses. Among its key focus areas are financial management, digital literacy, leadership, and marketing.

According to a study by AFI’s GSP Working Group, finance-led anti-human-trafficking measures have helped to successfully uncover human trafficking gangs engaged in sexual exploitation of primarily women victims. The study found that women are more vulnerable and at greater risk of being victims of certain types of crimes, including human trafficking, with latest figures suggesting that women and girls account for 71 percent of modern-day slavery victims.

The gender dimensions of crime risks related to human trafficking is therefore an important consideration in National Risk Assessments (NRA) in the sector’s Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) standards and responsibilities. Integrating gender considerations into AML/CFT standards is therefore essential to safeguard not only the integrity of a country, but also to protect women from these activities. The NRA for Bangladesh, for example, explicitly references vulnerability of human trafficking as a crime and the gender dimension of this risk, with women and children accounting for the majority of victims.

Unfortunately, there is no middle ground where it comes to women’s financial inclusion. Either we do something about it and reap its bountiful benefits. Or we neglect it and bear its heavy cost to our economy and our society, while slowing down recovery and mitigation from the ongoing pandemic.

Financial inclusion is more than just reducing the stubborn nine percent gender gap in the area. It is about empowering women to increase their financial autonomy, bargaining-power and self-esteem, while reducing their exposure to risks. It is about improving women livelihoods and building a more equitable and sustainable future for all.


The Gender Inclusive Finance workstream is partially financed by the Swedish International Development Cooperation Agency (Sida) and other partners.


This blog was written to mark the 16 Days of Activism against Gender-Based Violence, an annual international campaign that kicks off on 25 November, the International Day for the Elimination of Violence against Women, and runs until 10 December, Human Rights Day. It was started by activists at the inaugural Women’s Global Leadership Institute in 1991 and continues to be coordinated each year by the Center for Women’s Global Leadership. Financial inclusion is one of the key enablers of women’s economic empowerment, which is also known to reduce women’s exposure to violence.

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