8 things you may not know about financial inclusion and gender

How do women save and use financial services in the developing world? A new report by the World Bank compiles evidence on gender gap in access to finance. Here are some of the findings from recent studies.

Worldwide, more men (55%) than women (47%) own or co-own bank accounts. The gender gap is biggest among people surviving on less than $2 daily and living in South Asia and the Middle East.

Both men and women cite similar reasons for not owning a bank account, with lack of money as the No. 1 commonly reported reason. In the developing world, women (26%) are more likely than men (20%) to say they don’t own one because a family member already has an account.

Gender norms, by law or custom, influence the rate at which women access financial services. In many developing countries, women don’t enjoy equal inheritance rights or cannot own assets that can be used as collateral for loans.

Women fall behind men when it comes to using savings and lending instruments through formal institutions, even after considering factors such as age, education, income and residence (whether urban or rural).

More women than men use informal ways to save. In sub-Saharan Africa, 53% of women tap informal community-based methods, such as rotating savings and credit associations, as compared to 43% of men.

Compared to their male counterparts, female entrepreneurs tend to pay higher interest rates or get less favorable loan terms and are more likely to shy away from seeking financing from formal sources.

Owning personal savings instruments can boost women’s empowerment as it’s found to prompt increased consumption and productive investment among women.

By itself, boosting access to financial services may not fuel the growth of women-owned enterprises, if underlying causes of gender gap are not addressed. Due to some constraints – such as lack of decision-making in the household or cooperation from husbands – women would opt to invest in sectors that would have lower returns compared to men, even if they are provided with business training.

Read more about financial inclusion on Devex.com: How USAID's partners are transitioning to e-payments Financial inclusion gap: Some progress, but wide disparities remain How better data can galvanize financial inclusion