Why Poor Women Need Financial Inclusion
These women are in a savings program in Tanzania run by CARE.
Many years of research have demonstrated that there is a particular problem standing between women and economic autonomy: bullies who take their money. This problem is especially bad for women who are “unbanked,” whether they live in developed or developing countries. We should all be concerned about this problem because when bullies take a woman’s money, it often means
(1) fewer resources go to the care of children
(2) the violence involved incurs further costs, often to the public purse.
We should also care, of course, because it’s just wrong to let such things continue when there are ways to fix the problem.
In recent years, technologies have developed to a point that poor women can be brought into the financial system, allowing them to keep their money for better purposes, but also to avoid the violence that usually accompanies the attempt to steal. However, it is going to take a huge international effort to get women into these systems because various customs and technical barriers stand in the way.
Walt Macnee, Presdient of the MasterCard Center for Financial Inclusion, signs the same petition you can sign (see below) calling for the UN to prioritize women’s inclusion in the global financial system.
Here is an illustration. In the United States, welfare checks recently have been replaced by prepaid cards. These cards not only save the government significant millions by avoiding printing and postage, but have also made as much as 40% more money available to the recipients. How? Most welfare recipients are “unbanked” females. These women used to take the paper check to a storefront check-cashing service and take out the entire amount. These storefronts typically deducted a commission of 25-30% for the service.
But now women can take a card to any ATM and withdraw just what they need, when they need it. This not only represents a 40% increase in income for them (because they no longer pay 30% of the original payment in check cashing fees), but it allows them to manage their money better.
There was another, unexpected benefit, however. Since everybody in the neighborhood knew when the welfare checks arrived, predators could wait near the storefront and pounce on these women when they came out with all their cash. Not only did the women (and their children) lose all the rest of their money when this happened, but the attacks, if they were fierce enough, would result in police and medical costs that also went on the government tab. Now, the women never have to go to the storefront at all.
So, by pulling women into the financial payments system through the prepaid welfare cards, The US government not only saved the paper and postage, but got better value for their money (100% of the check reached the family instead of only 70%) and eliminated the costs of violent robbery.
Here’s another example. Everyone in development work knows that women in rural Africa will spend any earnings they have first on their children, especially for education. But if they have to keep their savings in a mattress, relatives and friends will steal it or beat it or wheedle it out of them. In rural Africa, there are few banks and women are not particularly welcome in them. Little kiosks, a few in every village, serve female shoppers. It turns out that, if you make it possible for a woman to deposit her money with the kiosk owner, who deposits the savings in a mobile banking account, she can keep her money private and safe—and available for education or medical care or other important needs, rather than having it whittled away by their relatives.
In several African studies we have done, it has been easy to see how hard it is for women to get any actual cash. Particularly in the Pampers/UNICEF fieldwork in Senegal, we saw that pregnant women were unable to get basic antenatal care (essential to both mother and child) because their husbands and in-laws would not give them the bus fare to the nearest clinic. One of potentially most important recent innovations have been “text-to-treatment” systems whereby women can get the bus fare paid over a mobile telephone account. The bus fare is usually paid by a foundation or government agency—the subsidy is worth it to them because poor prenatal care results in some of the mostly costly longterm health problems.
The problem is that there is a huge gap in women’s access to mobile telephones, as well as to internet services of all kinds, in poor countries. And that is why we need a push for financial inclusion. By getting women access to things like mobile telephones, cash cards, and even traditional bank accounts, a whole world of money better spent opens up, as does a future where women can control their own destiny.
There is a petition right here that you can sign to help that happen. The United Nations periodically makes up a list of development goals. The Millennium Development Goals set the world economic agenda until 2015, driving funding and attention to the items on the priority list and forcing governments to be accountable for their progress on each. The post-2015 Sustainable Development Goals are being set right now, but the Open Working Group has been resistant to putting women’s economic issues—financial inclusion in particular—on the list of goals nations must work on next.
Financial inclusion for women is not a trivial cause, but it is easy for world leaders to place a low priority on it. Focus on health and education programs is preferred because:
(1) such programs are much easier for the public to understand
(2) such programs give money to agencies that are part of the governments at the table in the first place
(3) such programs don’t involve giving women independence, which is unpopular among ruling men in developing countries (this is why it is also hard to get them to put things like “women’s entrepreneurship” on the goals)
(4) it’s hard for people to understand that women’s financial inclusion may actually be a more effective way to get teaching or treatment to families.
If it steams you to think that a handful of diplomats are keeping women from getting their fair share of global attention and funding, then please click here and sign the petition. This only takes a couple of minutes—you do have to register first—but I promise I already have made arrangements to get this petition to the right people—and I intend for them to be shamed into acting responsibly.
For credibility, may I add that this petition is no ordinary grassroots movement, but has already been signed by some very responsible and important people. (See the video below.) Please join them in supporting an idea whose time must come—now.