Defining the building blocks of gender transformative financial inclusion

An event co-hosted by FAO and IFAD in the framework of the Joint Programme on Gender Transformative Approaches for Food Security and Nutrition (JP GTA) brought together experts in financial inclusion and women’s empowerment to share examples of transformative approaches that can improve access to financial products and services for rural women. Over 200 participants tuned in for the discussion that was moderated by Azeta Cungu, Rural Finance Officer at FAO.

The JP GTA is implemented by the three United Nations Rome-based Agencies – FAO, IFAD and WFP – with financial support from the European Union. Women’s financial inclusion is a key theme for the JP GTA and constitutes the focus of its field level activities in Malawi.

Delivering opening remarks, Willem Olthof, Deputy Head of Unit for Sustainable Agri-Food Systems and Fisheries at the European Commission’s Directorate-General for International Partnerships, underscored the EU’s strong support for the Joint Programme as part of its commitment to promoting gender equality and women’s empowerment in international cooperation. He added that the EU’s new Gender Action Plan III for 2021-2025 aims at tackling the structural causes of gender inequality by taking a transformative and rights-based approach, and therefore has gender transformative approaches as one of its three core principles.

Setting the scene

Susan Kaaria, Senior Gender Officer at FAO, noted that approximately 1.1 billion women around the world lack access to basic formal financial services, with the global gender gap in bank account ownership of women compared to men remaining unchanged at around 7% since 2011. She highlighted that recognizing and addressing discriminatory social norms is key to ensuring women’s financial inclusion and achieving gender equality and women’s empowerment.

“For example, because of socio-cultural norms, women may be less mobile than men,” she explained. “What this leads to is that they may be limited in their ability to travel long distances to reach financial institutions, so they are not able to open bank accounts, take loans or deposit savings. In other instances, rural women may not be viewed as legitimate clients for financial institutions, despite being actively engaged in agriculture activities, because they are seen as primarily associated with the domestic sphere.”

The value of applying gender transformative approaches that take into account structural, practical and normative barriers – as opposed to gender sensitive programs that focus mainly on equal distribution of resources – was outlined by Dr. Saskia Vossenberg, Lead Gender, Migration and Remittances at the United Nations Capital Development Fund (UNCDF). She emphasized that in order to see lasting results for women’s financial inclusion, deeply rooted systemic inequalities need to be addressed at various levels.

“There are multiple constraints that exist both on the demand and supply side,” she said. “Many of them originate outside the financial sector, and they are interlinked. So what happens in the market or when we seek financial services is very much related to what happens at home, behind our front door or also in the policy system.”

Gender transformative approaches for financial inclusion that work

Highlighting the role of social norms and the constraints they create for women, Nisha Singh, Gender Transformative Solutions Lead at FinEquity, shared a methodology developed by CGAP to better understand the drivers of women’s behaviour.

A social norms diagnostics study conducted in Turkey identified the priority norms – ranging from ‘women should not have financial privacy from their husbands’ to ‘women should not have assets in their own name’ – that were influencing women’s behaviour. Based on the information collected, CGAP was able to identify potential entry points for designing financial products, services, policies and interventions to meet women’s needs. The provision of improved financial services was combined with addressing normative barriers to create greater acceptance among household and community members of the woman’s role as not only as a caregiver but also as an economic agent.

This methodology is currently being tested in five countries as part of a collaborative learning program called the Social Norms Diagnostic Co-Lab, run by CGAP and FinEquity, with results due to be published later this year. The JP GTA has joined as a partner of the Co-Lab and is running the diagnostic in Malawi, one of its focus countries.

Grace Majara, Financial Inclusion Senior Technical Advisor at CARE USA, presented CARE’s Village Savings and Loans Associations (VSLAs) approach that brings together around 15-30 women from a community to pool their savings and lend money among themselves. VSLAs have proven immensely successful not only in driving women’s economic empowerment but also in improving food security, addressing gender-based violence and promoting women’s leadership.

For a project in Uganda, CARE’s VSLA approach was coupled with a digital financial product, the so-called Digital Sub-Wallet for Women Financial Empowerment, tailored to women’s habits and goals, as well as household dialogues to address intra-household inequality and engage with power holders. Aimed at strengthening women’s voice, financial autonomy and equal participation in managing household finances, the project saw powerful results. Many women who confessed to having previously hidden cash in a secret place at home decided to open bank accounts, and the overwhelming majority saw a significant improvement in spousal behaviour, mutual trust and joint decision-making.

Women’s financial inclusion key to ending hunger

To create systemic opportunities for women's financial inclusion, it is critical to develop a deep understanding of local markets, examine how norms shape all actors in the system and change the incentives that drive their behaviour.

This message was echoed in the closing remarks delivered by Steven Jonckheere, Senior Technical Specialist for Gender and Social Inclusion at IFAD. Steven stressed that without taking into account and acting on discriminatory social norms, there will be no progress either on the financial inclusion of rural women or – given the important role that women play in food systems – more broadly on ending hunger.

To address the social constraints that women face, IFAD applies the Financial Action Learning System (FALS), a participatory methodology that has shown positive results and created a “win-win partnership” between financial service providers and their clients.

“If we want to effectively address the gender gap in financial inclusion and achieve zero hunger, we need to bring these experiences to scale collectively and learn from each other; each one of us building on our respective expertise and comparative advantage, be it as researchers, policy makers, development partners, civil society or financial service providers,” he concluded.

Webinar recording (passcode: JPGTA.2021)

Contact: Hajnalka Petrics, Global Coordinator for the Joint Programme on Gender Transformative Approaches for Food Security and Nutrition: [email protected]  

Image credit: Chris Steele-Perkins / Magnum Photo, FAO