This article is the first in a series of pieces exploring mobile financial services in developing economies.
Today, half the world’s adult population — 2.5 billion people — lacks access to basic financial services and the majority of them are women. Being financially excluded means relying on cash, where a simple task like paying a bill or receiving money from a family member can be risky, costly and time consuming. This exclusion from financial services also reinforces the cycle of poverty and slows economic growth.
From Kenya to Haiti to Indonesia, mobile phones already have begun playing an important role in expanding access to financial services, including ways to send, receive and save money. At the end of 2012, an estimated 1.7 billion people in the world will have a mobile phone but not a bank account, but thanks to advances in mobile banking technology, these are no longer mutually exclusive.1
Mobile technology in the hands of women can help enable entry into the financial mainstream and provide access to life-enhancing services such as savings, payments, healthcare, education, and entrepreneurship. But as research has shown, there’s a gender gap in mobile phone ownership and usage, in part because of the lack of products designed for the wants and needs of women. In order to achieve the full potential of the role mobile technology can play in women’s empowerment globally, it is critical that service providers understand what women need and design products that effectively reach this audience.
Toward that goal, the GSMA mWomen Programme and Visa Inc. have partnered with Bankable Frontier Associates (BFA) to conduct groundbreaking research in five key countries: Indonesia, Kenya, Pakistan, Papua New Guinea, and Tanzania. Building on the results of GSMA mWomen’s Striving and Surviving, which was prepared as part of Visa and GSMA’s partnership with USAID and AusAID, the BFA research will provide a deeper dive into how best to reach these women and what services and products will directly meet their needs – offering important lessons for mobile operators, financial institutions, governments, and other partners.
Consider Pakistan, where field work already is underway. In Pakistan, only 12 percent of the total population has a bank account — and those who do are primarily men. However, mobile phone penetration hovers around 70 percent, offering a unique opportunity to provide access to more formalized financial services via mobile phone. Our early field work indicates that while Pakistani women are remarkably sophisticated and adept at managing their household finances, they don’t have access to formal financial tools. Instead, they save in money boxes in their homes or via savings groups, both of which can carry significant risk. Given the increasing presence of mobile phones in the country, mobile financial services – if designed properly – can provide an accessible and convenient avenue for women to enter the financial mainstream.
To hear more about the work underway in Pakistan, please click here to view a video from one of the field researchers, the first in a series that will highlight the work being done in all five countries.
“Through this research, we aim to uncover the challenges women face in their daily and longer term financial management and to suggest ways of easing those burdens with mobile money,” says Daryl Collins, co-author of the seminal work, Portfolios of the Poor, and a director at BFA. “Poor people of both genders manage their money with a complex portfolio of financial instruments. However, the evidence suggests that women are doubly burdened, given that they are often responsible for making ends meet, yet are less empowered to make full use of the options available.”
Our hope in this effort is to help women realize the promise of mobile financial services. In order to do that, we need to learn more about women’s attitudes towards mobile services, including barriers to frequent use and whether mobile financial services offer an entry for women who previously did not value or know how to use mobile technologies.
As our research continues over the next few months, we look forward to sharing with you the voices of these women from around the world.
Aletha Ling is chief operating officer for Fundamo, a Visa company. Chris Locke is managing director of GSMA Mobile for Development Department.