Treasury Notes

 Treasury’s Focus on Gender and Financial Inclusion

By: Alexia Latortue
4/15/2016

Why isn’t the gender gap for access to financial services narrowing? The gap between the portion of men and women who have access to financial services is confounding; particularly give huge leaps in access to formal financial services globally. While 700 million adults around the world became first-time account holders between 2011 and 2014, women still lag behind men. Indeed, 58 percent of women worldwide had a financial account in 2014, compared with 65 percent of men. That’s an 11-percentage-point increase for both genders since the initial World Bank Global Findex survey in 2011, but the gap between men and women has remained at seven percentage points globally – and nine percentage points or higher in developing economies. Women are missing out globally on the benefits of greater financial inclusion, and national economies could benefit from their inclusion. 

Achieving financial inclusion is a priority for the Treasury Department, and one that we addressed at the Financial Inclusion Forum that we co-hosted with USAID in December. In his remarks at the Forum, Secretary Lew noted Treasury’s concern about the persistent gender gap in access to financial services. As part of our ongoing engagement on this issue, Secretary Lew last month hosted a meeting of 16 financial inclusion policymakers, practitioners, and experts to delve deeper into some of specific barriers women face globally in accessing financial services, and what policy makers can do to tackle them.

Treasury is not alone in putting a spotlight on the gender gap in financial inclusion. From Women’s World Banking and the Global Banking Alliance for Women to the G-20 and the Alliance for Financial Inclusion, we have new data and reports. Several policy issues affect women’s access to financial services, from financial literacy challenges and legal barriers that the World Bank’s Women, Banking & the Law program highlights, to limitations in financial infrastructure that touch women and men alike.  

During the roundtable discussion, we focused on three core issues: the difficulties women face in obtaining legal identity documentation, the importance of sex-disaggregated financial data, and the proactive policy levers that can help promote women’s financial inclusion. A legal identity is often the gateway to obtain government services and open a formal financial account, but high fees and cultural barriers disproportionately affect women’s and girls’ abilities to obtain official identification (ID). Participants highlighted national ID programs like Aadhaar in India and the National Identity Smart Card in Nigeria that can bring more women into the financial system.  Similarly, sex-disaggregated financial data can help policymakers see the financial gaps and opportunities in the financial services market and also allow banks to better identify the business case for products that work for women. For example, Chile has been tracking sex-disaggregated financial data since 2002 and now produces an annual report that financial institutions use to target women as a distinct market segment.  Participants also emphasized the digitization of government payments as a proactive policy lever to broaden opportunities for women. 

Participants also evoked the importance of learning from the informal sector, recognizing that many women are already comfortable with the design of the current informal financial services that they use, like rotating saving and credit associations and Susu collectors. Rather than forcing women to abandon those services and turn to traditional bank accounts, we can do more to formalize those services or link them to formal institutions so that women can continue to use them while ensuring their safety and proper oversight. 

Our collective work on financial inclusion is yielding important results. But we know that more can and must be done to ensure that women are fully brought into the formal financial sector. This has benefits not just for the women who gain access to financial services, but for the economy as a whole. Treasury is committed and eager to continue this important discussion.

Alexia Latortue is the Principal Deputy Assistant Secretary for International Development Policy.

Posted in:  Financial Inclusion
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