Why the financial inclusion of women is at the core of what we do: the hidden enabler of countries’ development, economic growth, inequality reduction, business evolution, social inclusion and much more.
The global gender gap in financial inclusion is one of many gender inequalities development agencies around the world address with priority more attentively. The global gender gap in financial inclusion has been 7% since 2011 -since the first time it was measured by the World Bank Global Findex- and there is hardly any improvement in increasing account ownership by women despite global efforts to close this gap. While the progress is slow, there is enough evidence that women use financial resources better than men to sustainably reduce poverty. When having access to proper finance, women address the basic needs of their families more efficiently, prioritizing daily needs, education, health and economic investment (World Bank, 2006; UNFPA, 2006). In many countries around the world, women use credit better than men, with a higher rate of paying back. Looking at remittances, studies show that women manage received money often more effectively than men, especially in cases of emergency.
In the Jordanian context, the financial inclusion of women has been on the rise. However, it remains very low and the gender gap is among the highest in the world, with 30 percentage points. 56 percent of all Jordanian men are financially included in comparison to 27 percent women, which is less than one in three women (Global Findex 2017). In 2011, the financial inclusion rates were 34 percent for men and 17 percent for women. The financial inclusion rate in Jordan is 42 percent (Global Findex 2017). As for non-Jordanians living in the country, and specifically Syrian refugees who are currently the largest refugee population hosted in Jordan, there is hardly any evidence of their access to financial services.
There are several reasons for the gender gap in financial inclusion in Jordan. Due to cultural factors, men dominate managing the finance of the family, although women play an active role in managing the household expenses. Another reason is insufficient funds given the minimum balance requirement of 200 JOD set by banks. 75 percent of surveyed Jordanians with no bank accounts in the Global Findex 2017 state insufficient funds as the main reason pushing them away from opening an account. Another key factor in women’s limited access to financial services is their limited role in the economy. Only 17 percent of Jordanian women are part of the labour force and 31 percent of those are unemployed (Jordan Department of Statistics, 2017). The figures are significantly lower for Syrian women living in Jordan.
Acknowledging those challenges, the Central Bank of Jordan launched its National Financial Inclusion Strategy 2018-2020, setting a formal goal to reduce gender gap by 20 percent by 2020, while leveraging fintech and boosting women’s financial know-how. Digital financial services (DFS) have been prominently highlighted in the Strategy as a medium to increase financial inclusion. The DFS sector has been expanding in Jordan for the past three years and the use of mobile wallets is on the rise. To date, there are nearly half a million users of mobile wallets, which is equivalent to 5% of the population. 1,9% of Jordanian men use DFS while only 0,1% of women use those services (Global Findex 2017). It is worth noting here that the 2017 Findex data does not reflect the users of mobile wallets referred to above.
To improve access to remittances and other financial services through digital solutions targeting unbanked Jordanians and Syrian refugees, and with the broader objective of increasing financial inclusion, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)- part of the German Development Cooperation- launched the Digittances Project in partnership with the Central Bank of Jordan in October 2015. Digittances, a portmanteau of digital and remittances, is a four-year project working in three main interventions areas to ensure that the foundation has been laid for the use of digital services for cross-border remittances by refugees and Jordanian households with little or no access to financial services: first, developing an ecosystem for national mobile payments; second, enhancing the regulatory framework and supervisory instruments for national and cross-border digital remittance services as well as fostering dialogue and knowledge exchange; and third, increasing digital financial literacy and awareness. Placing strong focus on including women in financial services, Digittances has set a goal of reaching 50% women of new DFS users, including both Jordanian and Syrian women, in addition to offering financial literacy and awareness opportunities to 50% women of the target group. Of digital financial services, the project specifically supports the use of mobile wallets.
Through a development partnership between Digittances and one of the five mobile payment service providers in Jordan, nearly 88,000 users opened and started using mobile wallets, including 29,000 women, to date. Furthermore, through efforts in increasing DFS awareness, nearly 4,000 women, Jordanian and Syrian, received training on the use of DFS (by February 2019). Besides the efforts invested in increasing the demand on DFS, and to increase women’s engagement in the supply side of the DFS sector, the Digittances project launched the initiative “Closing the Gap: Women Empowerment through Digital Financial Services in Jordan” mid 2018. The initiative aims to build a women agent network to encourage their financial and economic inclusion. In the context of DFS, mobile money agents play a key role in engaging customers and bringing them into the formal financial system. Closing the Gap works on identifying and training female mobile money agents, building their capacities and facilitating their access to the market. To reach its goals, the Digittances Project works closely with multiple local and international stakeholders to synergize existing efforts.
The project’s women beneficiaries confirmed that having access to mobile wallets has contributed to their autonomy, is reducing their vulnerability and is allowing them to start businesses. A Syrian woman who used to receive assistance in cash said that after using a mobile wallet she was better able to protect her money. Her neighbors and relatives knew previously which day she would receive the cash and used to ask her to borrow some and won’t return the money back. Now that she receives the assistance on her mobile wallet, no one can borrow or take any cash from her. Another Jordanian woman who started using a mobile wallet enthusiastically said that she would like to become the first female agent in her neighborhood through a mini market she runs with her husband. Another Syrian woman informed the project that “I know a mother and son who started their small online business and are benefiting from the e-wallet to manage their business and their sales remotely”.
Women can contribute to growth not only by starting businesses but also by gaining skills to manage their financial resources. Having access to and use of a range of financial services enhances not only the contribution of women and women-led business to growth, but also contributes to women’s autonomy and reduces the vulnerability of their households and businesses. In summary, closing the gender gap in financial inclusion can act as an enabler of countries’ development, economic growth, inequality reduction, business evolution, and social inclusion. (G20 Argentina- Financial Inclusion for Women: A Way Forward)
By Enas Halaiqah
Most data used in this blogpost are taken from the Global Findex. There are, however, other sources of information regarding financial inclusion in Jordan.