Levering the power of digital financial services: New GIZ project initiative aims to empower women to close the gender gap in financial inclusion with their own hands.
In Jordan, less than one in three women (27 percent) have access to a bank account. In comparison, just above half of all Jordanian men (56 percent) are financially included. With an average of 42 percent, financial inclusion in this lower middle income economy stands below the global average of 69 percent (Global Findex Database 2017). Perhaps most strikingly, the gender gap in access to finance in Jordan currently persists at 30 percent- – three times higher than the global average of 9 percent!
Access to formal financial services bears numerous benefits to individuals and businesses alike. For those at the bottom of the pyramid, being financially included translates into access to basic financial services such as sending and receiving payments, safeguarding savings, and accessing loans and insurance services, among others. It also equips individuals to better absorb income shocks, manage risks, and invest in human capital and income-generating activities.
Financial inclusion thus bears the potential to lower economic and social barriers, and directly contributes to the 2030 Agenda for Sustainable Development. Granting universal financial access also supports the 2030 Agenda principle of ‘Leave no one behind’ (LNOB), and contributes to SDG 10: Reducing Inequalities, among other SDGs. Yet, given the alarming statistics of over two thirds of women remaining financially excluded, the pledge of leaving no one behind becomes ever more pressing in Jordan.
A new GIZ initiative entitled ‘Closing the Gap: Women Empowerment through Digital Financial Services in Jordan’ aims to tackle the gender gap in financial inclusion. Selected as one of the ten projects of the Inequality Challenge, a fund by the German Federal Ministry for Economic Cooperation and Development (BMZ) , the project proposes the development of a women’s agent network to encourage women’s financial and economic inclusion.
Financial service providers around the globe are increasingly leveraging digital technologies – especially mobile phones- to extend access financial services. Technology serves as “last-mile delivery channel” to reach excluded customer segments, such as rural communities and women. In Jordan, five payment service providers (PSPs) have been licensed by the Central Bank of Jordan since the end of 2015 to offer so-called mobile money accounts. These accounts allow individuals to store funds, and perform basic transactions, such as sending and receiving money, and paying bills.
In this context, mobile money agents function as “human touch points” between financial service providers and their customers. Contracted by the PSPs, the agents’ primary role is to register individuals, and facilitate deposits and withdrawals in or out of their customers’ mobile wallets. As agents are oftentimes the first and only human point of contact, they are key in engaging customers and bringing them into the formal financial system.
The project will engage with the target group of women micro, small and medium (MSME) entrepreneurs in Jordan to form the agent network. Participating women will be trained to provide mobile money services, and benefit from tailored capacity building interventions to advance their knowledge and skills as women entrepreneurs. The project will also facilitate new business development opportunities, and thus support access to new markets and economic opportunities.
The project works hand-in-hand with the established GIZ Digi#ances project, which aims to improve access to remittances and other financial services through digital solutions in Jordan. It also collaborates with the Central Bank of Jordan to ensure that planned activities are in line with regulatory and supervisory guidelines for digital financial services. Furthermore, new partnerships with local and international organizations are being established to ensure that synergy effects are used for the maximum impact possible. The project looks forward to sharing preliminary results and lessons learned in the months to come.
By Byoung-Hwa HWANG