Gender and rural financial services

Financial resources are a key driver for rural development and for eliminating hunger and poverty. Yet, the availability of financial services in rural areas is quite scarce, and the existing ones intended for rural communities rarely benefit women.

To increase the access to financial services for smallholder families and small agribusinesses, the Food and Agriculture Organization of the United Nations (FAO) works with a wide range of partners, including rural women, producers’ organizations, financial institutions, international development agencies, business development service providers and policy-makers. Together with these different partners, FAO seeks to build sustainable and inclusive rural financial systems and agribusiness investments to overcome the obstacles affecting a range of financial services offered and used by people at all income levels, especially in rural areas.

The access to financial services allows rural women to procure the inputs, labour and equipment needed for their agricultural or rural off-farm activities and enables them to better care for their households. Research shows that women spend most of their income and savings on the education, nutrition and health of their children and families. Increasing their bargaining power and financial control results in a greater share of household expenditure dedicated to food, water and household durables, thereby improving the livelihoods of rural households and communities.

Women are the main producers of food in developing countries. Nevertheless, they still face significant challenges compared to men to access land, training, market information, inputs and credit. Worldwide, most unbanked adults are women. This means that they lack an account either at financial institutions or with mobile money providers. The gender gap in accessing financial services and products is higher in developing economies.

Some of the barriers rural women face in accessing financial services are due to sociocultural norms and perceptions, discriminatory regulatory frameworks, time constraints, poor access to productive assets, lack of property to be used as collateral, illiteracy (including financial illiteracy), and limited information on financial products and services. Also, financial institutions too often have a limited capacity to design gender-tailored services and products and have delivery mechanisms unsuitable for supporting rural women due to their poor understanding of existing gender dynamics in rural areas and in the agriculture sector.

FAO is strongly committed to support gender-sensitive financial inclusion practices that create an inclusive financial space for women. More specifically, FAO assists a variety of stakeholders (governments and other national stakeholders; agribusiness; micro, small and medium-sized enterprises; producer organizations, policy-makers, service providers of all types and financial institutions) with the design and implementation of tailored interventions that include innovative financial instruments and approaches to support the financial inclusion of poor rural women. Through in-country work, FAO supports the adoption of group-based lending approaches; facilitates women’s access to information and communications technologies and financial literacy training; helps with provision of advisory and business development support; develops the marketing capacities and market linkages through value chain development projects; and facilitates the exchange of experience and collaboration between countries. Knowledge generation and dissemination, capacity strengthening and policy dialogue to support women’s financial inclusion are also key areas of FAO’s work.