Digital Finance in Bangladesh: Where are all the Women?

Bangladesh has long been a success story for women’s financial inclusion, where 90% of the 21 million clients served by MFIs are women. And in terms of access to formal financial services, 35% percent of women in Bangladesh hold a bank account, which is above the regional average for South Asia (Global Findex).

But in terms of digital finance, the story is very different. Despite being identified as a “mobile money sprinter” by the GSMA, only 18% of digital finance users in Bangladesh are women, with even fewer holding registered accounts. This is perplexing, given the rapid growth of digital financial services now reaching more than 21 million registered account holders. Where are all the women? Why is digital finance failing to engage women and what can be done to build inclusion? While the topic warrants in-depth research, discussions with industry stakeholders yield a number of potential factors:

• Less than 3% of agents are women. Dutch-Bangla Bank (DBBL) appears to have the largest numbers of women agents through networks of women-owned tea shops and other businesses in rural areas distributing cash transfer payments. Women tend to have lower mobility and there are cultural barriers around going “out” to agents located in male-dominated markets. Most MFIs, for example, serve women through village meetings or doorstep services.
• Real and perceived security issues exist, with sensitivity around sharing phone numbers with men who may well use the numbers to call after transactions and harass them. 
• Digital products appealing to women may not have hit the market yet. Service is still dominated by P2P transfers, with approximately 85% conducted as over the counter transactions (OTCs). Since providers have little knowledge about individual OTC users, the degree of women’s use isn’t known, but is may be high, due to the relative simplicity and ID requirements.
• Identification may be a key culprit. GO staff working on pilots with bKash report women are less likely to have the government IDs and birth certificates required to open mobile accounts.
• Phone ownership and usage is also a likely issue for women. The GSMA recently estimated the unique subscriber penetration in Bangladesh to be around 50%. However, MFI field staff report the majority of low-income households tend to have one phone per household, often held by husbands or older children.
• English-language phone menus may have a disproportionate impact on women. Literacy levels for women in Bangladesh are 55%. The use of Bangla text is difficult on a basic feature phone. Only 30% of adults report the ability to send an SMS and the high use of feature handsets that must rely on a USSD session-based menu.

Some leading providers are beginning to address the digital inclusion gap and market opportunity presented by women. We’ve tracked down five interesting examples:

• DBBL is taking service for women seriously. They have signed up with 245 garment factories to disburse salaries to garment workers (80-90% women) with accounts mainly accessed via agents, ATMs and client-initiated mobile transactions.  While there are ongoing issues, model factories appear to be strong partners in onboarding and supporting women adopting digital finance.  DBBL also has programs with donors and governments promoting transfer payments to women via dedicated women agents.
• The Asia Foundation has launched new programming with telco partner Banglalink and UCash helping women entrepreneurs utilize digital financial services and reach new markets through ecommerce. As a part of the program, UCash will hire 500 new women agents. 
• BRAC NGO, which primarily works with women, is integrating bKash mobile money into many programs. Since 2011, the Microfinance Programme has offered mobile money as an option for deposits and loan installments in a limited number of branches. Earlier this year, BRAC Social Innovation Lab, with funding from the Bill & Melinda Gates Foundation, initiated pilots to digitize payments like school fees and youth savings supporting adolescents and women. 
• Swosti is a new company which seeks to “create a bridge between mobile banking and microloans” offering a “mobile credit card” for emergency loans to existing MFI clients. Swosti allows MFI clients to register for a DBBL mobile account and apply for emergency loans on the mobile, allowing clients faster access to emergency loans via mobile, plus the convenience of being able to make deposit, loan repayments and cash withdrawals across the large agent network. Pilots are ongoing, although MFI technology integration is still a challenge.
• Microinsurance is another area where women may be benefiting from digital finance, although we lack full data on women’s participation to prove the point. MicroEnsure partnered with Grameenphone, Bangladesh’s leading mobile network operator, to provide life insurance as a loyalty service. While the product has been on offer for less than a year, 2.5 million airtime users have been registered for the service and product offerings are expected to expand (CGAP interviews, December 2014). 

Bridging the gender divide

The factors impacting women’s access to digital financial services in Bangladesh are clearly complex, but the resources and market players available to bridge this gap are present. A first important step is for providers and other stakeholders to understand women’s needs, preferences and usage of current products, services and channels. Providers are already beginning to see the need to engage more women as agents in the places where women are comfortable transacting, but few understand how these new delivery channels could be developed and what products they should offer. The government could meet industry halfway by promoting government transfers and providing women greater ease of access to registered accounts by looking at innovations around identity requirements.

While smart phone penetration is still relatively low in Bangladesh, it is gaining ground. Smartphones will provide an important opportunity to improve user interfaces and address literacy barriers across all clients. However, providers should begin work now to develop responsive products meeting women’s needs, potentially working in partnership with the MFIs that have already learned so much about serving them in such great numbers.