Regulators should work directly with financial services providers to prioritise women’s financial inclusion.

Make women’s financial inclusion a key objective

At UNCDF, we believe that regulators should add women’s financial inclusion to their other key objectives such as financial stability, financial integrity, and consumer protection. Beyond the ethical argument for gender equality, this is because women are: 

• Great savers who can provide a stable source of liquidity for banks and others, which is important for maintaining financial stability

• Less likely to trust the formal financial sector and hold formal identity documents

• Often more susceptible to risks as they have lower incomes and less secure jobs, which raises consumer protection concerns 

Regulators (and other public and private players) are becoming increasingly aware of the importance of sex-disaggregated data to understand gender differences in access to and use of financial services and to inform policy decisions.

While there is global demand-side data available through the World Bank’s Global Findex and regulators may choose to run their own country-specific surveys, these surveys are often expensive and less frequent compared to supply-side data reported by financial services providers (FSPs). This approach is also supported by partners like the Women’s Financial Inclusion Data (WFID) Partnership and the UN Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA). 

Work with financial services providers

However, commitment is just the first step. It is extremely important for regulators to work collaboratively with FSPs to develop standards for sex-disaggregated data in ways that fulfil the need for more and quality data without placing undue compliance burden on FSPs.

Three steps for regulators

To achieve this balance, we propose three steps on where regulators can start to collect sex-disaggregated supply-side data.

1. Sequence and pace data disaggregation

Start with low-hanging fruit, i.e. datasets in which a gender tag already exists and will not require reporting entities to change their management information systems. Regulators can first consult all key stakeholders, including FSPs and other regulators, to identify these datasets and start collecting existing data. In the second stage, regulators can then work with FSPs on appropriate timelines for disaggregating other datasets of interest.

For instance, in Chile, the Superintendencia de Bancos e Instituciones Financieras (SBIF) started with credit registry data as every borrower has a gender-coded national ID number. Three years later, SBIF started requesting sex-disaggregated savings data directly from FSPs, having worked with FSPs to ensure their ability to collect and report this data. 

The Central Bank of Egypt (CBE) also followed a similar approach. CBE engaged with FSPs to understand their capacity to report sex-disaggregated data. After finding that only commercial banks and the Egypt National Postal Office used the 14-digit gender-coded national ID, CBE required these institutions to report disaggregated first (rather than others) in the first iteration of their guidelines. 

2. Build awareness about the value of disaggregated data

FSPs which collect and analyse granular and disaggregated data by sex, location, age, education, etc. can use this as a competitive advantage to identify new business opportunities including targeting female customers. However, the value of sex-disaggregated data is not clear to all FSPs, especially those with less flexible management information systems. In this case, regulators can build awareness on the potential value of focusing on female customers.

For example, the Central Bank of Morocco, Bank Al-Maghrib, facilitated public awareness workshops on women’s financial inclusion to promote the value of sex-disaggregated data in advance of mandating disaggregation of account ownership and credit data. For easier coordination, Bank Al-Maghrib engaged with banks through their industry association. 

3. Share meaningful and gender-specific actionable insights with FSPs

Send or publish regulatory data. FSPs often desire to benchmark themselves against competitors on relevant statistics but may not have access to such data. Regulators can share industry insights in digestible form – which can help FSPs to make strategic decisions – to encourage further reporting by sex, age, etc.

Chart: Rwanda — Number and value of non-performing loans, by sex, 2008-2013

For example, the National Bank of Rwanda found that while women accounted for a lower number and value of commercial bank loans, women repaid interest at more consistent rates than men over the 2008-2013 period. By 2013, women’s non-performing loans accounted for only 1.5% of the entire outstanding bank loan book value.

What we’re reading

• Global Banking Alliance for Women (GBA), Data2X, and the Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB) – The Value of Sex-Disaggregated Data 

• Alliance for Financial Inclusion (AFI) – Integrating Gender and Women’s Financial Inclusion into the Central Bank of Egypt’s (CBE) Framework 

• AFI – Leveraging Sex-Disaggregated Data to Accelerate Progress Towards Women’s Financial Inclusion  

• UNSGSA – Collecting and Using Gender-Disaggregated Data for Financial Policymaking: Key findings from 11 countries

Authors

Naomi Bourne

Alexis Ditkowsky

Aneth Kasebele