Financially Including Young Women: Gains for a Generation

Despite an overall positive trend, the gender gap in financial inclusion remains stubbornly persistent in some parts of the world. To understand what gives rise to this gender gap and how it evolves over time, CGAP and the Bill & Melinda Gates Foundation (BMGF) have been independently analyzing Global Findex data to identify drivers, patterns, and trends. This blog series presents the results of those analyses – first, with an overview of factors associated with financial inclusion for young women and men across low-income economies, then with a deep-dive into three East African countries, and finally by reviewing our findings on the dynamics of young women’s financial exclusion. Together, these analyses show that the period between 15 and 24 years of age is a pivotal time for financial services adoption – potentially presenting a high-impact opportunity to close the gender gap. 

Across low-income countries, young women aged 15-24 consistently have some of the lowest rates of access to and usage of financial services of any demographic group.  

As the first blog in this series revealed, young women’s financial exclusion is largely driven by access to wages, mobile phones, and education. While it may therefore not be surprising that the gender gap emerges around the age of majority, what is remarkable in many countries is that women’s adoption of formal financial services barely increases across age groups – indicating that patterns set in young adulthood appear to solidify over time.  

But even though many young women may work in the informal economy, may not have much schooling, or have limited access to digital connectivity, there is evidence that a growing number are expressing an appetite for financial services. Blog two in this series illustrated how young women have been adopting formal financial services at younger and younger ages in East Africa. While this is promising, considerable work remains to understand and scale this success – and future work by BMGF and CGAP will seek to do just that.  

To what extent are existing financial products and services satisfying women’s financial service needs (or use cases) between the pivotal ages of 15-24? At that age, use cases are as diverse as young women themselves, with financial goals that differ depending on rapidly changing life stage dimensions such as age, school or work status, and family role, as well as context, socio-economic situation, and prevailing social norms. The profiles below illustrate use cases for sample segments of young women who vary across these dimensions, with implications for their financial goals and the level of difficulty they have accessing formal financial services (greater on the left, lesser on the right).  

Note: Names and stories are illustrative, and images were generated by AI

Financial service providers (FSPs) will need to take a different financial inclusion approach for each young woman. A forthcoming CGAP publication will synthesize what practitioners and experts have learned so far on how to financially include such diverse segments of young women. How young women are first introduced to financial services is important to building their confidence and familiarity to use them to support their goals.  

To reach particularly marginalized young women, FSPs may benefit from partnerships with NGOs or other organizations that serve young women and are well-placed to provide the social intermediation that is often needed to make this introduction. This may entail not only financial education but also liaising with gatekeepers such as parents, husbands, and community leaders to create space for young women to use financial services.  

NGOs may also combine financial services with other complementary supports (e.g., livelihoods training or sexual/reproductive health services) that can maximize effectiveness. CGAP’s evidence review found that those impacts include financial outcomes and, in some cases, broader outcomes for livelihoods, psychosocial functioning, education, and/or health.  

Much of the evidence featured in CGAP's work on young women comes from experience with specific financial services or program-level implementation. While a few have reached tens of thousands of young women, most have far fewer, begging the question: how do we address young women's use cases at scale, to move the needle on the gender gap?

Although globally important, the answer is context-specific - which is why over the coming months CGAP and BMGF will undertake segmentation work and deep qualitative analysis in two to three countries. In a nutshell, we will look at which segments of young women gain access to financial services between the ages of 15 and 24, which do not, why, and what can be done about it. To maximize the opportunity to address the multidimensional challenges young women encounter, we hope to work with a range of local stakeholders, including NGOs, financial institutions, and government agencies. If you are working on these issues, we invite you to join forces with us.