The Parliamentarian 2020: Issue Three - United Nations at 75: The Commonwealth and the UN

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FINANCIAL INCLUSIVITY FOR WOMEN IN THE COMMONWEALTH: THE ULTIMATE CHALLENGE AND BARRIER POST-COVID-19?1 View from the Commonwealth Women Parliamentarians (CWP) Chairperson Financial inclusion refers to efforts to make financial particularly when mobile phone ownership of women products and services accessible and affordable is low.6 to all individuals and businesses, regardless of Financial inclusion is important for women to their personal net worth or company size. Financial access loans, credit and to make transactions, inclusion strives to remove the barriers that exclude but it is also essential to save money and build people from participating in the financial sector and assets in a safe place, which can in turn take them using these services to improve their lives. It is also out of poverty. Savings interventions increase called inclusive finance.2 women’s business earnings. Women seek savings Globally, it is not lack of intention or legislation vehicles, and use personal savings to invest in but often social norms that constrain women’s their businesses.7 Evidence on savings also shows capacity to access and meaningfully use financial impacts on women empowerment8 and positive services. Greater access to financial services for household welfare impacts.9 Studies show that Commonwealth Women women is considered a key enabler for ‘Gender even poor women are eager to save if given Parliamentarians (CWP) Equality and Women Empowerment’, i.e. SDG Chairperson, Hon. Shandana appealing interest rates, a conveniently located 5, one of the 17 Sustainable Development Goals Gulzar Khan, MNA (Pakistan) facility, and flexible accounts - with bankers in (SDGs) and Agenda 2030 of the United Nations. Indonesia, rural Mexico and South Asia finding that The momentum for financial inclusion of women is increasing rapidly; convenience generally beats interest rates.10 the World Bank’s 2018 Global Findex database reveals that although In short, closing the gender gap in financial inclusion can act as access to financial services for women has sharply increased since an enabler of countries’ development, economic growth, inequality 2011, the financial inclusion gender gap in developing economies is still reduction, business evolution, and social inclusion. However, greater unchanged. It is also clear that full financial inclusion will not be possible women’s financial inclusion requires a more gender inclusive financial without including women into the formal financial system. system that addresses the specific demand - and supply-side barriers women face as well as an inclusive regulatory environment.11 The Importance of Gender Equality Gender equality is both the ‘right thing’ and the ‘smart thing’ for all Some positive developments in the Commonwealth12 countries. In addition, the Commonwealth has been a strong advocate Africa is now the world’s second fastest growing region after Asia, with through its Declaration on Gender Equality and Plan of Action on Gender annual GDP growth rates in excess of 5% over the last decade. However, Equality and Women’s Empowerment. The gender gap varies widely despite the good economic growth shown, this has not translated into across economies and regions among Commonwealth countries, the shared prosperity and better livelihoods for the majority of the population. gender gap (with women being less likely to have accounts than men) Growth has to be inclusive to be socially and politically sustainable. was the highest for India, Pakistan, Trinidad and Tobago, Mauritius and The recent growth of mobile money (including forms of ‘branchless Uganda. There is no significant gender gap in account penetration in banking’) and digital financial services have allowed millions of people some Commonwealth countries like New Zealand and Singapore.3 who are otherwise excluded from the formal financial system to But the question arises as to why financial inclusivity is important perform financial transactions relatively cheaply, securely, and reliably. for women in the Commonwealth? According to research by Mobile money has achieved the broadest success in Sub-Saharan the McKinsey Global Institute advancing gender equality could Africa, where 16% of adults report having used a mobile phone in the unlock US$12 trillion of incremental GDP in 2025 with financial, and past 12 months to pay bills or send or receive money. particularly digital inclusion, being among the key enablers for making In Kenya, where the pioneer M-Pesa service was commercially progress on gender equality.4 Moreover, according to the World launched in 2007, 68% of adults report using mobile money and Bank, advancing gender equality by addressing the gender wage gap M-Shwari, which in 2015 boasted having some 10 million account globally could unlock US$160 in lifetime earnings.5 holders. In East Africa, more than 35% of adults report using mobile Do these considerations still remain valid in the times of COVIDmoney, and commercial banks such as Equity Bank (Kenya) Limited, 19 as the pandemic remains and will remain a significant health Co-operative Bank of Kenya and Kenya Commercial Bank (KCB) are cost for so many in the Commonwealth? also very active players in this market. Financial literature shows that closing the gender gap in financial inclusion could have positive effects in smoothing consumption, Dimensions of women’s financial inclusion providing security, increasing saving and investment rates, and facilitating What are then three key pillars of this magic pill which will enable new business opportunities. Yet, despite dramatic successes in digitizing millions of families across the Commonwealth to work their way out basic financial products in some parts of the world, women still face of poverty and the recent pandemic-influenced difficulties affecting significant hurdles to accessing and using digital financial services both finances and greater access to health services? 200 | The Parliamentarian | 2020: Issue Three | 100 years of publishing 1920-2020