In occasions of Covid-19 and enforced mobility limitations in lots of developing countries, digital financial services (DFS) can fulfill an essential function by enabling the distribution of social transfers and remittance payments and supplying a method of payment. Yet, DFS along with other financial services aren’t easily available to everybody. A current report ready for the G20 Global Partnership for Financial Inclusion (GFPI) concentrates on the key issue of gender gaps in financial access. While advances happen to be made and 240 million more ladies have banking or mobile money accounts compared to 2014, women continue to be consistently in a disadvantage with regards to being able to access financial services (Findex, 2017).
In Sub-Saharan Africa, women are 11 percentage points less inclined to come with an account based on the 2017 Findex. Globally, 980 million women have no lender account (Findex, 2017). Women will also be 20% less inclined to possess a mobile money account (GSMA, 2019).
What explains this gap? While factors for example lower phone possession, literacy, and insufficient funds and documentation among women are recognized to lead to gender disparities, you will find unanswered questions round the role of gender in DFS uptake and usage (check this out publish by our friend Leora Klapper). A brand new research paper fills a few of these gaps and seeks to know the function of agent gender in transaction decisions.
Within the study, we offer some novel evidence meant for the insurance policy options suggested within the GFPI report. Most particularly, the findings claim that making certain sufficient representation of ladies agents could lead to promoting women’s use of DFS.
So what can a million transactions inform us about women’s use of DFS?
We collaborated with FINCA DRC, a microfinance institution within the Democratic Republic of Congo (DRC) to research the salience of gender in DFS transactions. We searched for to reply to some a quick question: Do women choose to transact with females agents? Will they transact bigger amounts with females agents? And are they going to even travel further to transact having a female agent? To reply to these questions, we examined an extensive data set in excess of a million customer transactions (covering all agent banking transactions in the institution from April 2017 to March 2018).
FINCA’s agent network and subscriber base are male dominated, out of the box the situation for a lot of microfinance institutions. About 39% from the customers and 23% from the agents are women. Transactions between male customers and male agents account for most (56%) of transactions within the data (and 66% from the transaction volume). Over the different locations (market areas) where FINCA exists, there will always be some women agents, however their share can be very low (the proportion of female agents inside a market varies from 7% to 34%).
Do you know the key findings?
We use regression analysis to unpack the result of agent gender on individual-level transaction behavior, comprising agent location, customer age, agent age, transaction type, transaction amount, and currency (whether U.S. dollars or Congolese francs were utilised, as FINCA agents may transact either in currency). The next findings emerge:
Customers judgemental for agents that belongs to them gender. After comprising relevant influencing factors, female clients are typically 7.5 percentage points more prone to transact having a female agent compared to men agent. Importantly, the result is stable across markets with greater minimizing representation of female agents, which implies a regular preference of female people to transact with female agents. In additional general terms, our paper provides proof of gender homophily.
Clients transact greater value amounts with agents that belongs to them gender. With male agents, the need for female customers’ transactions is just half (53%, US$133) of the items male customers transact typically with male agents (US$250, see figure). By comparison, female customers’ transactions are typically 66% bigger with female agents than male agents (US$221 typically) and also the improvement in transaction values becomes small with female agents (female customers transact US$221 and males US$207). Thus, females (males) transact bigger values with female (male) agents and considerably reduce their amounts when transacting with agents from the other gender.
Whether they have greater balances, female clients are more inclined to visit female agents. This finding comes from analysis more limited data on customer balances. A possible explanation is the fact that a real estate agent can easily see a customer’s balance throughout the transaction. This might lead women to find women agents when they’re particularly worried about disclosing financial information (that’s, they have large balances) to men.
Do you know the implications?
The findings from DRC reveal that the gender from the agent matters for the way customers use DFS. We replicate these bits of information having a smaller sized data set from the randomized controlled trial in Senegal and discover exactly the same trends. Although these bits of information still need be validated in other contexts across Sub-Saharan Africa and beyond, they suggest ways that women’s adoption and employ of monetary services might be faster:
Provide women the choice to go to a lady agent. Women within our data possess a robust preference to transact with female agents. Yet, because there are less female agents, they’re less readily available. This means that it’s frequently less convenient (and often more costly) to go to a lady agent to work. Better representation of ladies agents could promote convenience and luxury for ladies to make use of DFS.
Make gender a part of agent rollout strategies. A vital foundation for improving use of female agents would be to ensure gender diversity in the agent rollout stage. With no explicit concentrate on gender equity, women frequently have to overcome significant obstacles to get agents. We have seen this within our data, in which the companies of ladies agents are accomplishing on componen with male agents’ companies. Contrast this with DRC overall, where female companies had 49% lower profits compared to average male business (World Bank, 2019). Creating possibilities for ladies to get agents and addressing barriers to getting into agent banking could advance parity in agent systems.
Design products to support women’s needs and challenges. Products and operations that can meet gender-specific needs, considering social norms, are very important for empowering women with DFS. We hypothesize that whenever their balances are greater, the disclosure of account balances throughout a transaction often leads women to find women agents, presumably to safeguard sensitive information. Hence, procedures that safeguard women’s financial information could promote trust and use of DFS.
The findings reveal that DFS transaction behavior is affected by agent gender. Understanding gender-lensed usage patterns can lead to evolving women’s financial inclusion. Hopefully to determine more research around the patterns of ladies using DFS, to tell the look, implementation, and delivery of monetary services and policies that meet and serve women’s needs.
Support with this research was supplied by the IFC-Mastercard Foundation Partnership for Financial Inclusion and also the World Bank. The entire research paper can be obtained here.