If you own a bank account, chances are you are better off than a third of women worldwide. If that bank account comes with a nice app on your phone, you’re probably economically better off than 60 percent of women worldwide. And, as research suggests, you likely have more autonomy and agency.
Women’s economic empowerment is a holy grail for both policymakers and women’s advocates but is recognizably difficult to attain. Data from India, Indonesia, and Tanzania offer preliminary evidence that the smart offering of digital products to women, both mobile financial services (especially savings) and digital IDs, can be transformative. This offers cautious optimism that the ongoing revolution in digital technologies can help change entrenched social norms that keep millions of women in subordinate positions in the family.
Digital money makes it cheaper to provide financial services, and digital ID expands access to these services. When well-designed digital products target women as individuals (separate from husbands and family) and provide them with privacy to make financial decisions, they boost women’s economic independence and say in household decision-making, as evidence points out.
In both Indonesia and Tanzania, women microentrepreneurs who were encouraged to open mobile-savings accounts reported having greater household decision-making power compared to women who were not offered mobile savings. The empowerment effect in Indonesia was present for women who received financial literacy training and worked with branchless bank agents who received high financial incentives to sign up new customers (and were told that it was good to target women).
In Rajasthan state in northern India, a government mandate to designate women as heads of households to receive direct benefit transfers contributed to a major push towards their financial inclusion. Two-thirds of the women heads of households did not have a bank account before this initiative started in 2014.
Digital technologies can expedite financial inclusion policy goals—especially for women. But technology alone cannot close the gender gap. There must be continuous policy commitment to equality for equality’s sake and an aligned effort to leverage fintech for all.
[Center for Global Development]