Using Global Findex 2021 for Gender-Aware Supervision
Monday, Mar 06, 2023

Using Global Findex 2021 for Gender-Aware Supervision

This podcast identifies how financial supervisors should use The Global Findex 2021 to implement gender-aware supervisory practices.

Read their biographies here. Read the transcript here.

View the Global Findex chapter summaries here, the data sets hereand the gender brief here.

Read our Gender-Aware Supervision Toolkit here.

Read the Transcript:



Leora Klapper

Lead Economist, Development Economics, The World Bank 

Jennifer Long

Program Leader, Toronto Centre


Ruth Dueck-Mbeba

Financial Inclusion Advisor, Toronto Centre

Publish Date:

March 8, 2023




You are listening to a Toronto Centre podcast. Welcome. The goal of TC Podcasts is to spread the knowledge and accumulated experience of global leaders, experts, and world-renowned specialists in financial supervision and regulation. In each episode, we'll delve into some of today's most pressing issues as it relates to financial supervision and regulation, the financial crisis, climate change, financial inclusion, fintech, and much more. Enjoy this episode.

Ruth Dueck-Mbeba:

Welcome to this podcast. My name is Ruth Dueck-Mbeba, I'm pleased to host our conversation today. The Toronto Center's mandate is to support financial regulators and supervisors in the responsibility of ensuring financial stability while also fostering and enabling environment for financial inclusion and innovation. This podcast is part two on the 2021 Findex survey results published last year. And to mark International Women's Day 2023, we will focus on results and analysis of gender disaggregated data. The index analysis reveals cause for celebration and also a call for continued commitment and action. Specifically, we will look at the role of gender disaggregated data from a supervisor's perspective. To set the stage, we are reminded that financial inclusion is a cornerstone of development, and since 2011, the Global Findex database has been the definitive source of data on global access to financial services; from payments to savings, borrowing, and managing risk.

The 2021 edition, based on nationally representative surveys of over 125,000 adults in 123 economies during the COVID-19 pandemic, contains updated indicators on access to and use of formal and informal financial services and digital payments, and offers insights into the behaviors that enable financial resilience. The data also identifies gaps in access to and usage of financial services by women and poor adults. A warm welcome to our podcast guest today, Leora Klapper, lead economist in the finance and private sector research team of the development research group at the World Bank. She's a founder of the Global Findex Database. Previously, she worked at the board of Governors on the Federal Reserve System and Salomon Smith Barney. And no stranger to the Toronto Centre audience, a warm welcome to Jennifer Long. Jennifer has led a successful career with the UK's Financial Services Authority, leading policy, supervision, market analysis and risk assessment functions. Jennifer has also led the production of Toronto Centre's Gender-Aware Supervision Toolkit. It provides processes, tools, and support to regulators and supervisors to strengthen financial inclusion for women. Welcome Leora and Jennifer to kick this off. Leora let's start with you. For those who are new to Findex and to the 2021 results, what were the key takeaways about women and the access to use of financial services?

Leora Klapper:

Thank you, Ruth, for this opportunity to dig into the Global Findex findings on women and financial inclusion. Over a decade ago, we were motivated to collect global financial inclusion indicators, and access to and use of formal and informal financial services, savings, borrowing, and digital payments because the supply side data provided by banks to regulators on the number of accounts and loans is typically a mystery box of data. We didn't know how many women had an account as compared to men, or how many women received government transfers into an account or in cash. So sex disaggregated data is a powerful tool to identify and spotlight where and how women are being excluded from accessing and using formal financial products. So, on average, we're seeing more equitable access to financial services. The gender gap across account ownership and usage of financial services remains, but significantly narrowed.
So across developing countries, on average, 68% of women have an account compared to 74% of men. This is remarkable progress; since when we started collecting the data, just 37% of women had an account. So, for instance, in the sub-Saharan Africa and Middle East and North Africa regions, the gender gap is twice the size of the developing country average, and three times the size of the world average at 12 percentage points and 13 percentage points respectively, and inside of the same regions there's been wide variation as well. So, Mozambique, for example, has a gender gap of 22 percentage points, whereas South Africa has no significant gender gap. But, despite this general trend towards narrowing gender gaps in developing economies, women also report to us barriers, such as the lack of national identification or mobile phone, distance from a bank branch, and low financial capability as reasons for preventing them from participating in the formal financial system.

And these barriers may contribute as well to the fact that women report low levels of financial resilience, meaning that they're unable to easily come up with money to deal with an emergency within 30 days. It's also important to mention that account ownership isn't the only goal; women need to use their accounts to reap the benefits of financial inclusion. So for example, we find no gender gap in account ownership in India. However, women with an account in India are 17 percentage points less likely than men to make or receive a digital payment directly from or into an account, or using a card phone or the internet. So, it's important that the focus of policies is on finding the levers to promote accounts usage as much as on driving ownership for the remaining unbanked woman.

Ruth Dueck-Mbeba:

Thank you for that overview. Leora, what have you seen as the biggest trends in the last decade for women's financial inclusion, and what have been the biggest drivers of that change?

Dr. Leora Klapper:

So, the trends have been towards leveraging technology to deliver financial services, such as mobile money accounts, access to a tech space phone, which are a game changer in expanding access to financial services both to access mobile banking products offered by banks, fintech, and telecoms, but also to send money and get paid. And it's much easier for a woman who may face family responsibilities or social norms to access banking services locally in her village using an agent, perhaps someone she knows, than to travel to the city to access formal banking services. And so, for example, although a gender gap remains in Bangladesh, account ownership for women increased from 26% in 2011 to 43% in 2021. In part driven by the introduction and growth of fintech mobile money products like Bcash. And just looking at the past four years, mobile money account ownership has doubled for women, from 10% of women in Bangladesh in 2017 to 20% of women in 2021.

And in addition, there are 15 economies in Sub-Saharan Africa in which 20% or more of adults have only a mobile money account and not another type of financial account. So, among these countries, all but Uganda has a statistically significant gender gap for overall account ownership. Yet, in seven of these economies, women were as or more likely than men to only have a mobile money account. This is suggestive that mobile money in these environments might be a more attractive or accessible option for women. But it's important to remember that driving financial inclusion through mobile money accounts depends on people having access to mobile phones. But in many places around the world, a gender gap exists in mobile phone access. So, among adults in Sub-Saharan Africa, for example, 86% of men have a mobile phone compared with 77% of women. But with improved access to mobile phones, women would not only have an additional option for accessing financial services, but also be in a better position to receive remittances, an important source of revenue in low and middle income countries and a disproportionate share of women's income. So, women across Asia, for example, also work overseas as domestic workers in high-income countries, as well in garment factories in other countries, and World Bank data shows that mobile based services often offer the cheapest remittance option while banks for the most expensive.

Ruth Dueck-Mbeba:

Thank you. It's fascinating the stories that data can tell. Let's turn to you, Jennifer. Can you tell us a little bit today about the work that you've been doing with Toronto Centre, specifically on gender aware supervision and where does Findex fit into that?

Jennifer Long:

Yeah, absolutely, thanks Ruth. So, at Toronto Centre, we've been working with some partner authorities to really map the different ways in which gender is relevant to supervision. And what we found is that gender is really relevant to financial stability and consumer protection, as well as specifically to financial inclusion. And what we've done is, using that insight, we've built a toolkit of resources for supervisors who want to move to the next step of how they build gender into their everyday supervision. So, where Findex is really useful is it provides this amazing data source on how ownership and usage of financial services differs between men and women. You can use it in your own country, and then you can see how your country's situation compares to peers to other countries in your region or in a similar income group. And that's really useful for us as supervisors because firstly, it provides the evidence about whether there's a problem and enables us to focus on women specifically in our work and build the case for the resources that we need to do that. And it also crucially helps us to target our financial inclusion supervisory effort in the right place where it's going to have the most impact. So, in the toolkit that we've built we will walk you through if you haven't used the Findex data before, how exactly you can find the results that are relevant for your authorities work in your country and use that to pinpoint where to take action next. And then we have practical modules in this toolkit to guide you through what you need to do about it to have an impact.

Ruth Dueck-Mbeba:

So, Jennifer, can you give us some practical examples of how that has been done in actual reality in a specific context?

Jennifer Long:

Absolutely. So, this is going to pick up some of the threads that Leora mentioned previously. If I look at for my country's results in the Findex data, for example, I might see that there's a 15% gap in my country between the proportion of men and women that hold accounts at financial institutions. And then, using the guide that we've got, I look at some comparative countries and I find that actually the average in those other countries is only 5%. So, what I see there is not only have I got a problem in my country, but I've also got an unusually large problem relative to some of the other countries; that they're in a similar position to mine.

So, what I'd want to do there, if that's the problem that I find in the data, is I'd want to be looking at the policies and rules that I had in place around client account opening and, whether they were creating particular difficulties for women, and they can do for reasons that Laura has touched on; things like lack of formal identification. It may be the practices that are used by agents or some other problem in the process that's particularly difficult for women to overcome. So I want to look at those policy things, and then in my authorities supervision of individual firms, I'd want to see whether firms could give me evidence that they were designing their policies and their products and procedures for account opening in such ways to specifically meet the needs of women as well as men. And we have a module on that, on how to do that in the toolkit.

And then we're going to fast forward, so I'm going to give you a quite long answer to this question because it gives us quite a lot of meat to work with; in three years’ time, I'll look at the next set of Findex data results to see whether it's worked, and let's hope that we see some great news, and what we see is that our gender gap is narrowed in terms of the number of women that have an account. And then, again, just to really emphasize Laura's point, I then need to move on to the next stage because I see that there's still a gap in the usage. And I also see that there's a gap in the amount of credit that women or the proportion of women that are using credit relative to men. So, then I shift my focus and I want to be looking at whether there's anything that firms are doing in relation to how they treat women customers that makes them less likely to use the accounts that they have. I might be looking at my complaints data to see if there are any patterns there that mean that women are not being treated as well as men. And I'd also be looking to start examining firms' lending criteria, to see whether there's any way in which they are failing to take account of the specific needs and circumstances of women. So, these are really practical things where using this data can help us hone in and use our resource to make a difference for women as well as for male customers.

Ruth Dueck-Mbeba:

Fully agree, and that is very, very rich what really strong data and strong data analysis can do. So Leora, now that Findex is built a database spanning 10 years, what are some of your reflections or success stories that you can share from both the data and also the analysis of women's data specifically?

Leora Klapper:

Thank you, Jennifer, for that detailed response. What we're often seeing is that bank products aren't always designed for women's needs. So, when you think about the type of, for example, payments or deposits women might be making, it tends to be small denomination, high frequency. So, for example, savings, many women are day laborers or get paid daily or weekly and want to save a little bit of money at a higher frequency. And so, they often turn to informal or semi-formal modes of saving; a woman won't take a bus across town to wait in line to deposit money in the bank every day. But what we are seeing, quite excitingly, especially in sub-Saharan Africa, are the use of agent based accounts, mobile money accounts for this type of high frequency, low denomination savings that I've mentioned; really interesting to see how women use their accounts such as for savings.

A very exciting finding in 2021 is that formal savings has increased in sub-Saharan Africa, driven by mobile money accounts. So in 2021, we found that about half of all adults in Sub-Saharan Africa save and about a quarter of all adults, nearly half are savers, saved in a formal account including 15% of adults who saved using a mobile money account. So, in Ghana, Kenya, Uganda, and Zambia, over 15% of women saved using a mobile money account. And much of this growth in mobile money savings appears to come from savings in less safe ways, such as less expensive susu in West Africa who collect money daily and charge a day saving and savings in the home. And so, women tremendously benefit by having a safe, convenient way of saving outside of their home.

Ruth Dueck-Mbeba:

Leora, what other industry or provider strategies to enhance women's inclusion do you see in the next few years? What are things that industry can do?

Leora Klapper:

So, the gaps that we're finding are not only account access, but also use so collectively suggests the need to continue our efforts to increase equitable financial inclusion for women. These efforts should be designed in a way that's mindful of women's specific concerns and needs, and digitizing payments presents one such opportunity. So, programs aimed at expanding financial inclusion through the digitization of cash payments can help increase both financial access but also use. So, governments can take the lead in digitizing payments, a proven method for increasing account adoption and enabling positive development outcomes. So, in developing economies, 39% of adults or 37% of women, or over half of those with a financial institution account, opened their first account specifically to receive a wage payment or to receive money from the government. Digital payments is more than just a convenience; for example, from the research, a government work fair program reaching over a hundred million people in India, for example, found that women who received benefits paid digitally into an account were more likely to seek and get jobs compared to those paid in cash. The biggest impact was on a woman whose husbands had been the most opposed to them working.

So, this research points the digital payments to increase women's privacy, security, and control over her money. So where are the opportunities? So globally, around 85 million unbanked adults receive government payments in cash, including 45 million unbanked women. Making some of these payments into mobile money or financial institution accounts can increase account ownership through a mechanism that also provides women with a safe place to keep and store their money. This may also lead to increased account usage since, the majority of people who receive payments from an account, we find in Findex, also make payments from an account. The private sector also has a role to play; for example, large retailers who source from global value chains in developing countries can work with their suppliers to advocate for them to deliver wage payments directly into an account.

Research I've done with mostly female factory workers in Bangladesh who were paid directly into an account, for example, found that they were more likely to save and less likely to make impulse purchases than account owners who didn't receive wage payments. The digital wage recipients were also better able to manage health emergencies and other unexpected expenses, and though many of them started out with limited financial experience, over time, receiving these payments into their accounts, they became better at using financial services without help and avoiding extra agent fees. In other words, they became savvier financial customers. We find in Findex that 165 million unbanked adults received private sector wage payments in cash, including 50 million unbanked women. And lastly, global agribusiness chains; thinking about tea, coffee, cocoa sectors can pay their farmers directly into an account. We find that 10% of all adults in Kenya, Uganda, Tanzania are farmers being paid directly into an account for their sale of agricultural products. This helps farmers establish a formal financial relationship to help him or her save for the next harvest, access insurance products and other risk management products and access appropriate credit. Global Findex finds that in developing economies, 145 million unbanked adults received agricultural payments in cash, including 65 million unbanked women.

Ruth Dueck-Mbeba:

To follow on that Leora, what do you think supervisors should focus on in order to expand and deepen women's financial inclusion in the next few years?

Leora Klapper:

So, a critical benefit of account ownership and usage by women is to equip them with the tools to build financial resilience to an emergency. So, we asked respondents if they could come up with emergency cash within 30 days to deal with an unexpected expense, only about three 50 Indian rupees; 5% of GDP per capita. And the response to that question across the globe shows that, for example, south Asia is the least financially resilient region in the world, and that women in South Asia are also less financially resilient compared to women in other regions. So, in South Asia, only a quarter of women compared to 40% of men say it's likely they could come up with emergency money. Globally, we find that women are more likely to say they would depend on family and friends on social networks, and over half of those who say they would rely on social sources say it would be very difficult or impossible to actually get the money when they need it. Family and friends just isn't a reliable source of money.

In contrast, the most dependable source of emergency money is savings. People who have savings and use it in an emergency are the most likely to say they can get emergency money when they need it. So for example, we've seen China, which has the highest saving rates and labor force participation rates for both men and women. Their 84% of adults say they could come up with extra money and there's no gender gap. The message for women is that access to formal financial services enables them to save money in a safe place. We know from other research that even very poor people can do so when they have a safe place to do it and they save more when their accounts include incentives to save. We know affordability and convenience are key to encouraging women to save regulations. Supporting and supervising agent networks that allow women to make frequent deposits with an agent on her block is more convenient than traveling to a bank branch. Supervisors should also consider regulations around mobile money deposits, such as whether or not they can, interoperability between mobile and bank accounts, and other ways to encourage adults who use only mobile money services to access a broader menu of formal financial services.

Ruth Dueck-Mbeba:

Thank you. And finally, for you, Jennifer, are there any other areas that you think supervisors can make a difference on gender inclusion?

Jennifer Long:

In addition to some of the areas that we've been touching about on here, there's an increasing body evidence that gender balanced boards are better at risk management, and that's really important for our prudential mandates and not only for financial inclusion. So, there are real supervisory benefits in looking at gender balance in the institutions you supervise, and actually, there's likely to be a wider inclusion benefit if we can broaden the pool of female leaders in the institutions that we supervise because female leaders tend to be more sensitized to the issues that women customers face and the needs that they have. So that's an area where we're starting to see supervisors really focus and also some authorities walking the walk themselves by looking to improve their own gender balance particularly at senior levels. And so, again, we have modules in the toolkit that help you to do this, but I'd also just like to add on something that follows from I think the points that Leora has been making on the inclusion front, which is a really important thread for supervisor authorities, which is not only relevant to this question of gender but will have a big difference, is the extent to which authorities are open to supporting innovation in their markets.

We've heard from Leora many of the examples where technical and digital innovation, for example, has helped increase women's access. So for supervisory authorities that are looking at, for example, looking at innovation hubs, or sandboxes, or reviewing their existing regulations to make sure that there aren't barriers to that technical and financial innovation, that's a really big contribution that they can also make in relation to gender.

Leora Klapper:

Thank you and I fully agree. So, I started off by talking about the importance of sex-disaggregated data on account ownership and access to and use of financial services, but another initiative for regulators is to collect sex-disaggregated data, for example, on the number of women in client facing roles. There's also research showing the importance of women loan officers, women working in branches to make women more comfortable in using these formal financial services and especially important, the role of female agents. For example, in Bangladesh, women told us they were uncomfortable using agents because to activate their account they need to give their phone number and they would then be harassed by male agents. Encouraging not only, as Jennifer mentioned, the importance of woman female participation on boards and in CO and other senior level positions, it's also important to encourage women in other client facing roles.

Ruth Dueck-Mbeba:

Thank you, Leora and Jennifer, and to you, our listeners, for joining us today. As we mark International Women's Day, these insights are a cause for celebration and the data points out the challenges still with us, and the work that remains. Please find links to the Findex reports, the gender brief, summaries, and data sets in the show notes of this podcast. And, find links to Toronto Centre's gender aware supervision toolkit, and all related practical resources in the notes as well. Thank you for listening today.