Do We Need Pink Check Books?

26 October 2011
1 comment

Women think and behave differently than men when it comes to financial matters. These differences have major implications for product design and marketing strategy.

Since 1999, Women’s World Banking (WWB) has conducted market research to understand how best to serve women through microfinance. We’ve conducted over 50 studies in 23 countries, segmenting our research populations by gender as well as household income. Eight of these studies are gender baseline studies, which focus on how “gender identity” informs the way in which resources are allocated inside poor households. These studies show that women and men generally describe women’s roles to include wife, mother, homemaker, financial manager and increasingly, income generator. Men’s roles are typically described as head of household, bread-winner, authority figure and, sometimes, father.

At WWB, we have learned that these “gendered roles” result in different priorities for men and women when it comes to spending, savings, and investment. Women tend to prioritize investment in children, which means more emphasis on education and health. In some socially conservative societies, financing a daughter’s marriage is often a priority for women.

As financial managers, women also play the role of saver. As caregivers, women save for emergencies as well as lifecycle events. Women save from their own income generating activities, from the housekeeping money given to them by their male partners and if their children are earning, from their contributions. It is not that men do not save, but they focus on investment in business and they expect their wives to save for household needs.

Targeting women is therefore key to mobilizing deposits. Designing commitment accounts that help women meet their savings goals, which differ by stage of life, can help financial institutions increase their savings outreach. At WWB we have integrated a simple savings planning tool where women can articulate their goals, desired time frame, and amount they can realistically save each month, thereby designing their own commitment account. This tool and approach is integrated into our sales force training and marketing documents.

Our research has found that members of a household do not necessarily share all information on finances. Confidentiality is therefore a product attribute greatly valued by women. In fact, this attribute is important even in highly co-operative households, as men and women often have different financial priorities and, it is often in women’s best interest not to share the amount they have saved with their husbands. For this reason, for example, plastic debit cards are preferred to pass books.

Receiving tangible benefits from using a product is very important to low income women. For example, the “Gold” account of SEWA in India is popular because the bank understands that gold is more than an asset to women in India—it is part of their identity. The motivation to save for “gold” (whether or not women use the money to buy gold when the time comes) is powerful.

Likewise, convenience and accessibility is even more important for women than men, given time constraints and cultural restrictions on their mobility in some contexts. Locating banking correspondents deep in the neighborhoods of Lahore, for example, means women can make financial transactions without needing a chaperone.

At WWB, we have also found that women want more information about products than men and that women take longer to make financial decisions. Embedding financial education throughout the marketing mix is a wonderful opportunity. Hosting short events in branches that combine financial education with selling savings products works well. High illiteracy rates among poor women in some regions require still more efforts in communicating through visual marketing materials and equipping front line staff to have productive conversations with women. Implementing marketing campaigns that seek women out in their neighborhoods, relying on word-of-mouth and using simple visuals to reach them with a message, are methods that we have found successful.

Within a marketing framework, defining metrics and targets and tracking results is becoming the norm. This holds promise for convincing MFIs to collect higher quality data on their customers and to analyze it for their business purposes which, in turn, would go a long way toward increasing the sector’s accountability for the double bottom line.

We should not underestimate the data challenge of course. Poor data collection, insufficient protocols about how to classify data for entry, as well as mistakes in the entry process are common in the sector. We also need to improve MFI performance indicators that enable us to develop better proxies for reaching and impacting women. Even the most frequently-used indicator of “percentage of women borrowers” is suspect since we know that a significant percentage of women clients – particularly for group lenders — give their loans to the men in their households.

At WWB, we do not think that women need a ‘pink’ check book but that women should be considered as a segment with distinct goals, attitudes, needs, and behaviors when it comes to financial services. There are some patterns across countries leading us to develop strong psychographic segments that acknowledge attitudes and behaviors that cut across income and other demographic characteristics. Embracing these findings to deliver financial products and services that meet women’s needs will require the microfinance sector to act on what we already know about women and to deepen our knowledge.

A recent Financial Times article entitled, “Innovators don’t ignore customers” argued that the rapidly dropping share price of Netflix, a DVD rental and online film service could be explained by the fact that the company lost touch with what its customers wanted. Keeping a sharp eye on client demand is thus not only the responsible or developmental thing to do–it simply makes good business sense.

Comments

Submitted by Dr V.Rengarajan on
Dear Murray In the patriarchal society , it is a fact the women, despite some limitation have a greater role in the process of development in general and poverty reduction in particular. I agree with WWB that women should be considered as a segment with distinct goal, attitudes,, needs, and behavior when it comes to financial services. The designing pro poor women product and services has therefore been well recognized and promoted by WWB in MF industry. On observation from the post on the various financial products practiced by WWB, I feel that besides micro savings and micro credit, there is a need for deepening the innovation and promotion of micro insurance services either individually or mandated along with credit products in view of their unique predicament in which women more particularly in poor community live with health related vulnerabilities right from womb to tomb ( child bearing sequence of pregnancy, child birth, post –natal, foeticide , mal nutrition, sex abuse, etc) . The impact of gendered unprotected health risk of different magnitude leads to physical incapacity affecting household’s earning power and income flow due to loss of labor. Further, in case of higher medical expenses, when they sell their productive asset or opt for higher interest loans , “they can have ratchet effects like movements down past a cog which are difficult or impossible to reverse , making poor people permanently poorer” (Robert chambers-‘Rural Development-Putting the last first- page 115 ). In this regard single –adult female-headed households, widows, deserted women and migratory women labor are most vulnerable and are likely to be pushed down to bottom of poverty pyramid. In this context promotion of a comprehensive micro insurance product for poor women covering life, house, livelihood activity becomes inevitable besides other MF services in this industry –After all Micro insurance is also a component of Microfinance Further, financial inclusion would become meaning less without insurance inclusion for ensuring more protection for sustainable livelihood to the poor women’s households. I agree that there is a need for collection of higher quality of data on customers in this industry. . In this regard, I reiterate emphatically that collection of data/information (besides on existing customers) pertaining to drop out customers, group mortality. Group defunct , and reasons there of for such a phenomenon, assumes importance for taking both preventive and curative measures as well for rejuvenation of the poor women livelihood. . Other wise mere financial inclusion of poor women for reducing poverty on one hand and exclusion there by sustaining poverty on the other is very unfair and unethical ( 43% of SHGs reported drop out and th drop out rate was 8.2% in India – MF in India Status of the sector report 2008) ‘Drop out occurs at the rate of 30-40% in poverty pockets where project supported by multilateral donors like World Bank were implemented by DSK. So in three years time 100% poorest of the poor were dropped, result of course were rate of recovery 99%. We do not know what happened to those clients who wanted to come out of poverty.’(Masdul Quader’s response to Kate –CGAP posting dated Nov.11, 2009). It would be interesting to know the experience of attrition phenomenon in WWB ! Thank you for sharing my views Dr Rengarajan

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