Supply-Side Gender Data is a Game Changer for Financial Inclusion

Women’s financial inclusion is key to women’s economic empowerment and several of the Sustainable Development Goals, specifically Goal 5 – achieve gender equality and empower all women and girls. Yet, gender inequality in financial inclusion is rampant. According to Global Findex, the average gender gap in account ownership in developing economies exceeded five percentage points in 2021 and is significantly larger in parts of South Asia, the Middle East, and Africa, with gaps ranging from 13 to 20 percentage points. The pivotal role of gender data in closing this gap cannot be overstated. Gender-disaggregated data (GDD) is the cornerstone for designing strategies and interventions that not only help increase women’s use of financial services to be more resilient and prosperous but also empower them to be stronger market players.  

Financial gender data lays the groundwork for equitable financial systems and inclusive economic growth because it gives market actors a powerful window to understand the reality of the state of women’s financial needs and behaviors at a granular level. Over the past decade, several global and country-level initiatives have contributed to a notable increase in the availability and use of gender-disaggregated data in the financial sector, but (much) more needs to be done to unleash its potential. 

The case for supply-side data gender disaggregated data in the financial sector (S-GDD)

The World Bank’s Global Findex is the most authoritative global source for financial inclusion data to date, including for gender-disaggregated data. Until now, Findex and other demand-side data (usually from countries that have their own surveys as well) have been the main input for gender gap analyses. Yet, while demand-side data (D-GDD) captures the reported experiences, views, and sentiments of men and women as economic and financial agents, supply-side data (S-GDD) captures real financial activity and behavior in retail markets. As such, D-GDD alone falls short of the information needed to design gender-smart products and policies that help reduce the gender gap, hence the critical role of S-GDD. 

Indeed, by highlighting the specific challenges faced by women, such as higher interest or rejection rates for women borrowers, lower savings, or higher complaint rates, S-GDD is invaluable for policymakers to create more inclusive financial policies. It also helps financial institutions understand the women's market size and segment opportunities, build a better business case for serving women, and design gender-smart products. But simply having S-GDD is not sufficient – what’s most important is having the right S-GDD and using it effectively.  More, and better, data is needed to elicit and answer the right questions and to inform and monitor the right policies and strategies.

Together, quality D-GDD and S-GDD offer the best dataset to analyze women’s needs, preferences, and choices when participating in the financial market, as well as the conditions and terms received and their views and perceptions about those. 

What does this look like in practice?

In January of this year, the Chilean government was awarded the Sustainable Sovereign Issuer of the Year prize and Sovereign Bond of the Year by Latin Finance, a USD 3 billion sustainability-linked issuance that incorporates targets for carbon emissions as well as gender equality and empowerment indicators across several sectors. For the financial sector, gender indicators are monitored using gender-disaggregated data collected from regulated financial entities by the financial supervisor (in this case the Financial Markets Commission). Similarly, in Rwanda, financial sector authorities used gender-disaggregated data collected from the industry to develop its Women’s Guarantee Fund, which provides supplementary collateral for women entrepreneurs with insufficient guarantees or credit history to get a loan. 

These examples illustrate how authorities can use S-GDD to promote women's financial inclusion and economic empowerment. The potential use cases for this data for authorities and the financial industry more broadly are many. Perhaps no surprise given its awards mentioned above, Chile has been using S-GDD for some time. In 2006, the main Chilean bank, Banco Estado, designed a simplified deposit account (Cuenta RUT) that only requires an ID to open, is accessible through banking agents, and can also be used to provide government transfers – all features that are proven to increase access for women. The number of women’s deposit accounts skyrocketed, and today the financial gender gap in Chile – especially regarding access – is among the lowest in emerging and developing economies (EMDEs). In Rwanda, Equity Bank designed a maternity loan with three to four months of no interest, and the Central Bank and financial sector supervisor (BNR) recently issued guidance to help financial service providers better serve women using S-GDD, among other strategies. 

While these examples are growing, they are still few and far between – broader uptake is what is truly needed for achieving gender equity in the financial sector. 

Untapping the potential of S-GDD

The IMF FAS database contains a long list of financial access variables that are reported and built by country supervisors using supply-side data. Almost all countries in the world contribute to this global effort but less than half are able to provide gender-disaggregated information. There are multiple reasons why many countries haven’t grasped the tremendous value of S-GDD, from a lack of awareness of its potential to a lack of mandate and/or internal support to spend resources in collecting S-GDD. Even in cases when the data is available and of quality, it isn’t always used effectively. 

While the challenges in collecting and using gender-disaggregated data are non-trivial, the opportunities it presents are transformative.  To this end, a collaborative, systematic approach to collecting and using S-GDD in the financial sector is needed, including the development of guidance for effective data collection and usage. By unlocking the potential of S-GDD, policymakers, and financial service providers can design targeted interventions and strategies to close the gender gap in financial inclusion and promote women's economic empowerment. 

Chile and Rwanda should be the norm and not the exception. To this end, CGAP is working on understanding the main obstacles in the generation and use of S-GDD by all market actors and developing solutions to unlock the S-GDD potential to help address gender inequalities in the financial sector. For more details have a look at our latest report here.