3 Ways to Deepen Our Understanding of Women’s Financial Inclusion

Understanding who benefits from financial services, how they benefit and why is becoming increasingly important in the debate over the impact of financial inclusion. As Jennie Persson and Emilio Hernandez argued in a recent blog post, recent emphasis on financial inclusion's average impacts obscures the distributional or relative effects of financial services on more specifically defined groups. “If we want to understand how financial services can create opportunities for the poor,” they write, “we need to stop generalizing impacts without considering context.”

How do we stop generalizing about impacts of financial services on women and get to a more nuanced understanding? FinEquity is a global community of practice convened by CGAP to advance women’s financial inclusion. Its members have significant experience, tools and approaches for answering such questions. Below are three principles we think could take research on women’s financial inclusion to the next level.

1. Go beyond measuring access and use to get at what really matters

Much of the conversation around women’s financial inclusion focuses on whether we’re narrowing the gender gap. While it is important for the financial inclusion community to know whether more low-income women are accessing and using financial services, the gender gap is not a barometer for impact. What really matters is the material difference that financial inclusion has on the lives of poor women who start using them. To get at this question, we need to think more deeply about the types of outcomes we are trying to affect and to integrate relevant metrics into our research.

A growing number of researchers are using women’s economic empowerment (WEE) measurement frameworks to better understand the impact of financial inclusion. We at FinEquity think these frameworks have a lot of potential for the financial inclusion space. Elements of these frameworks allow us to measure outcomes such as whether financial services increase women’s bargaining power and agency. However, applying WEE frameworks is not without challenges. Empowerment is multidimensional and context-specific. While there is some consensus around the more tangible aspects of empowerment, such as increased asset ownership, there is less agreement around more subjective measures like intrahousehold decision making and bargaining power.

FinEquity members are mapping WEE measurement frameworks to identify a core set of empowerment dimensions and indicators relevant for financial inclusion.

2. Unpack differences in outcomes by gender

Given the state of the evidence today, it is difficult to know whether and how low-income women are benefiting from financial services. Collecting data on outcomes, and not on just access and use, is critical. But it is also important to apply a gender lens when looking at the data and to keep these principles in mind:

• Disaggregate data by gender. Studies that disaggregate results by gender are more the exception than the rule. Mango Tree’s Savings Evidence Map identifies 234 studies in which women were not the focus of the intervention; only 23 of these studies disaggregate outcomes by gender. Similarly, only one of the 55 studies identified in this digital financial services evidence gap map disaggregates by gender. Disaggregation reveals important differences in outcomes. For instance, researchers in Kenya investigated whether reducing ATM withdrawal fees by 50 percent would increase the use of newly opened bank accounts. While the use of joint and male-owned accounts increased, there was no impact on accounts owned by women.
   
• Account for the fact that women are heterogeneous. Women are not a monolithic group. The outcomes of financial inclusion interventions may vary by women’s age, location (rural/urban), marital status, income level and educational background, and it is important to further disaggregate data to understand these dynamics. For example, a study by the American Economic Association shows that low-cost microloans had large positive outcomes only for women who had previous business experience, indicating useful preconditions that are predictive of positive impact. Without taking such differences into account, it is impossible to truly evaluate the impact of financial inclusion interventions.
   
• Understand the different barriers men and women face. It is now widely understood that women face disproportionate barriers to accessing and using financial services. Many of these constraints, such as restrictive social norms, can originate from outside the financial sector. What works for men may not work equally for women, if at all. As such, more evidence is needed on how and why financial inclusion outcomes differ by gender and by other individual characteristics.

3. Design research to promote women’s agency and autonomy

Gender should not be an afterthought. Going forward, it will be important to integrate a strong gender analysis into the design of financial inclusion research. A recent Oxfam publication provides practical guidance on how researchers can move toward “gender transformative” research. In financial inclusion, gender transformative research explores the structural barriers, such as gender norms and unequal power relations, that affect women’s access to financial services and limit the impact of those services. It also calls for meaningful participation of gender-diverse and socially excluded groups during the research cycle, highlights women’s initiative and agency and enables all involved in the research process to learn and reflect on gender and power.

FinEquity’s vision is a world where women have the capabilities to access, negotiate and control financial services that improve their lives. To achieve this, we believe that it is essential for low-income women to be a more integral part of how we talk about and measure the impact of financial inclusion.

This post is part of CGAP's "Evidence and Impact in Financial Inclusion: Taking Stock" blog series. The series explores recent efforts to synthesize evidence on the impact of financial inclusion and examines whether concepts like usage, financial health and poverty reduction capture the real impact of financial inclusion.