How Social Norms Affect Women’s Financial Inclusion

Social norms influence nearly every aspect of daily life, including how we interact with financial services. Restrictive social norms are part of the reason why 42 percent of women and girls worldwide, approximately 1.1 billion, do not participate in the formal financial system. Despite this, financial sector regulations often do not consider these norms. To effectively incorporate women in formal finance, more engagement and research into social norms is critical. Below are a few norms from around the world that are particularly important to understand and address so that we can bring more women into the formal financial sector.

Woman sewing, Uganda
Woman sewing, Uganda. Photo by Mohammad Saiful Islam, 2013 CGAP Photo Contest.

Limited mobility beyond the home

Many women in conservative cultures face limitations on their interactions with men outside the family. As a result, they often have limited sources of information about financial services. Most women depend upon word-of-mouth from other women in their communities or their male family members. In Pakistan, 67 percent of women who live with their husbands do not have knowledge of mobile financial services, and 97 percent of women who live without their husbands or other male family members are uninformed about these services.

Other social norms often hinder women from earning and saving money outside the house, in turn making it difficult for them to use formal financial services. In Eastern Europe and Central Asia, around 40 percent of women do not work. In Macedonia, business deals tend to be settled in restaurants or bars, and women who venture into these environments are liable to be labeled as bad housewives or told that they should have stayed home.

Even women who do earn money do not always control how their income is spent, including mobile-related purchases. In many countries, fewer women than men pay for their handset and credit recharge with their own money. When women are restricted or unable to pay for these mobile services themselves, their husbands or another male family member possesses the authority make the purchases on their behalf.  Men are then able to regulate women’s mobile usage and engagement with financial products.

Responsibility for childcare

Many employers are uninterested in hiring women with young children because they may need more time off than male employees. Women are traditionally considered to be the primary providers of childcare, and they are extremely vulnerable to losing their jobs during childbearing years or forced to accept a lower salary if they become pregnant or give birth. Social norms combined with the lack of affordable childcare prevent women from earning money and thus seeking opportunities to be included in the formal financial sector to channel their income.

A woman’s role as caregiver also limits the scope of financial products in which she may be interested. In contrast to male earnings, female-controlled finances are more likely spent on household expenses, such as utilities and food, as well as child welfare including school tuition and medical care. Many women who retain only very small amounts of money each month often falsely believe that they will not benefit from formal savings products.

Perception of low capability

Women tend to have less financial knowledge than men in both developed and developing countries, and they often underestimate the knowledge that they do have. Many women believe that mobile financial services are too complicated for them to understand, and this perception serves as a barrier for adoption of these products and services. In Papua New Guinea, 47 percent of women who want a mobile financial account claim that they have not opened one because they cannot comprehend how to use it; only 35 percent of men say the same.

Programmatic work on family planning and public health, education and women’s empowerment includes social norms assessments. Why, then, are social norms not adequately considered in financial inclusion? It is important for us to recognize that now is the time to earnestly regard these norms as critical barriers to women’s engagement within the financial sector. This International Women’s Day, we must join efforts to influence these norms and create financial inclusivity for all women.

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