Blog of Hana Smith, SI Advocacy Policy Advisor.
On Sunday 10 March, SI Advocacy Policy Advisor Hana Smith attended an event held by the Commonwealth Secretariat, which discussed Women’s Economic Empowerment as a Key Component to Development.
The first session, which focused on gender and FinTech (Financial Technology), was opened by the Government of Samoa who stated that economic empowerment in sustainable development requires continuous joint efforts and investments. Samoa and other small island developing states (SIDS) face heightened vulnerability and susceptibility to climate change. The Minister noted that when women are economically empowered, they are more likely to invest in their family’s wellbeing, social progress and entrepreneurship. This requires a holistic approach to education, healthcare and finance to name a few.
FinTech is now overtaking traditional banks and its aim is to improve and digitise existing financial systems. While the uptake of FinTech is higher in countries with a younger demographic, the gender gap makes it harder for women to develop their products. FinTech has the possibility to address issues relating to gender, and to achieving the SDGs via ensuring financial inclusion, entrepreneurship, and economic empowerment (including by breaking traditional barriers and enabling women to save, invest, and spend).
Currently, there are many barriers to addressing the gender gap in FinTech, which includes financial literacy, trust and security apprehensions, gender bias in marketing and design of FinTech services, a lack of women in FinTech, and access to technology and technology infrastructure, like mobile phones, computers and internet access.
Q: Why should we close the gender FinTech gap?
Mobile money empowers women by making them decision makers – access to mobile money can be a lifeline, especially in rural settings or in lower-middle income countries where there is less access to internet or online financial accounts. Mobile money is “not a privilege, it is critical”.
Benefits of mobile money expands beyond end users (e.g., women). If the mobile gender gap is closed in the next 7 years, the global economy would benefit by more than 2 billion USD.
The gender FinTech gap is a multifaceted problem that requires a multifaceted solution involving global stakeholders. Gender disaggregated data is essential to tackling this issue as well as bridging gaps between public and private sectors.
Q: How can FinTech help to overcome these challenges by sending and receiving money? What lessons learned can you draw on?
The United Nations Capital Development Fund (UNCDF) works on improving financial inclusion in 45 developed countries in the world.
Out of the 281 million migrants globally, more than 50% of them are women. Research on remittances shows that women often rely on traditional cash-based methods of transferring money. Modernising this practise would benefit both ends and would give women control over how their remittances are used.
Services are often not tailored to specific needs of migrant women, but international financial institutions find it time consuming and costly to develop literacy.
Q: How can we equitably promote youth in FinTech? How can we make sure that young women can become FinTech innovators?
Youth are often recognised as pioneers, but embracing diversity is key: no one size fits all approach will suffice.
The Committee system, which is prevalent in South Asian countries, whereby one person receives the entire pot of money, is predominantly a male based system. A lack of understanding of financial systems puts young women at a disadvantage. Therefore, the development of comprehensive education programmes focusing on financial needs must be tailored to young women.
Mentorships programmes can help young people navigate the FinTech world by connecting them to a role model. In addition, it is essential to create spaces for intergenerational dialogue and “meet young people where they are”. The Year of Youth Initiative, led by the Commonwealth, is endorsing and funding activities to help young people become more involved in emerging technologies.
The second panel discussed women’s inclusion in global trade. The panel discussed how to build resilience among micro and small enterprises (MSEs) by highlighting challenges and offering solutions to address issues faced by women in the informal sector.
A from the African Development Bank noted the importance of assessing the magnitude of the issue of access to finance for female entrepreneurs. As an example, 70% of Africa’s food is produced by women, but they only own 10% of the land. Women require access to collaterals as they face challenging in having assets under their own name. A tailored approach to create an enabling environment is essential.
A Representative from the International Trade Centre (ITC) explained their work including with governments, policy makers and female entrepreneurs. The Buenos Aires Declaration of 2016 saw political will for gender responsive trade policy, but there is still a need to break the silos and advance collaboration across Ministries. In addition, data on gender is fragmented and lacking, including missing data on female entrepreneurs.
Ijeamaka Nwizu , Founder and CEO of Diakwu Cloth, a small business in Nigeria, works with artisan women who have no formal training. Diakwu Cloth is a sustainable business and prides itself in being part of the circular economy. However, it is challenging for her to change the mindset of the weavers and to help them understand the benefits of being part of the circular economy. Another challenge she faces is that formalising her business is expensive because the weavers work in villages, meaning that they cannot often reach areas where they could formalise. The phones they have are basic and cannot reach the global market. Additional challenges of operating in the circular economy include raising awareness – not many people are knowledgeable about it, and this affects their view of the value of it; as well as advocacy – including trying to encourage people to buy better and consume less.
While this session was filled with discussion and exchanges of ideas, the one significant takeaway was that disaggregated data is required to inform strategies and address the multifaceted challenges facing women to achieving economic empowerment and being key drivers of sustainable development.