Pathways to Financial Inclusion for Young Women: Opportunities for Financial Service Providers and Funders

Executive Summary

Why Young Women’s Financial Inclusion Matters for Financial Service Providers and Funders

Financial inclusion for young women is not only a contributor to individual empowerment but also a catalyst for broader economic and social development. Young women aged 15-24 represent over 7 percent of the global population and undergo pivotal life transitions—completing education, entering the workforce, marrying, and starting a family—that shape their futures and those of their families and societies.

Access to financial tools and services can help young women navigate these key life transitions, build skills, generate income, save, and manage risk. Financially including young women contributes to improving their outcomes in areas including psychosocial functioning, health, and education. However, young women remain among the most financially excluded groups, with their rates of account ownership and usage beginning to lag young men’s during these pivotal years.

This Focus Note explores why this remains the case—even after significant efforts to narrow the financial inclusion gender gap—and what can be done to achieve equality in this sphere. Since closing the gap will require contextually adapted solutions, Ghana and Tanzania were selected as two representative yet diverse countries for deep dives, analyzing the causes and testing prototype solutions. In each country, FinScope data was used to segment the young women’s market and, with industry input, select priority groups for qualitative research. CGAP then partnered with leading financial service providers (FSPs) to design and test prototypes addressing key constraints on young women’s financial inclusion for these segments.

Drawing from the findings of this research and prototype testing, this Focus Note presents key opportunities to bring more young women into the ranks of viable, long-term financial services customers, in a way that meets their financial management needs. It also presents recommendations on how FSPs can realize those opportunities, and how funders can ensure that market incentives are aligned to support these efforts.

Opportunities for FSPs and Funders to Support Young Women’s Financial Inclusion

1. Broaden Young Women’s On-Ramps to Financial Inclusion. CGAP’s research revealed that many young women who had accessed financial services by age 24 had benefitted from financial and economic mentoring within their family and social networks. Unfortunately, many young women lacked such sources of guidance, which can smooth their path into the financial system. School-based financial education programs are a good example of supplementary sources of guidance. Some of these have proven highly effective, but are complex and long-term undertakings. To ease young women’s entry into the financial system in the immediate term, FSPs should ensure product information is clear and accessible to this segment specifically, and preferably provide it within the context of broader financial literacy initiatives. To convey this information, all strategies should ideally make use of respected yet relatable figures from young women’s existing social networks. Partnering with civil society organizations (CSOs) to enable young women to use financial services to build livelihoods, can also be particularly impactful. Funders can support public and private efforts to build mentor networks, strengthen the ecosystem of organizations working on this issue—especially in relation to young women’s livelihoods—and encourage cross-sectoral initiatives to increase young women’s financial capability.
    
2. Help Young Women Save, Not Borrow, to Reach Their Goals. Given widespread credit aversion among young women at the start of their economic lives, FSPs should develop or adapt tailored savings products as a foundational offering for this segment. Both the FSPs with which CGAP conducted full human-centered design processes in Ghana and Tanzania, chose to pursue this opportunity. The resulting prototypes aimed to provide low cost, privacy, security, convenience, and rewards, while balancing flexibility and discipline. Approaches like tailored automaticity—letting users set deposit rules and automating transactions—and balanced illiquidity—introducing strategic withdrawal friction while preserving emergency access—address pain points in competing savings tools, and align with best practices in designing savings products for low-income clients more generally. This means the resulting products will appeal to clients beyond young women, improving the economics for FSPs. Funders can further support the economics of small-balance savings mobilization through targeted, time-bound funding to demonstrate the commercial viability of these efforts. They can also incentivize FSP partners to focus on savings for young women as much or more than credit.
    
3. Preserve Young Women’s Financial Progress through More Compelling Health and Life Insurance. The economic consequences of health-related shocks to the household are among young women’s top worries, and many are open to or have already tried insurance to mitigate this risk. However, improved coverage options are needed to correct common shortcomings that often lead young women to let their policies lapse. Simplifying sign-up and renewal can minimize friction at a key moment in the customer journey. Offering rebates based on certain conditions can provide concrete value in the short term, in addition to the product’s promised payout when the policy is triggered. In Ghana, tailored benefits, such as income replacement or payouts specifically to guarantee children’s education, were also particularly important to young women. Bundling premiums with savings schemes can further enhance perceived value and make insurance a seamless part of young women’s financial lives. Funders can support provider efforts in research, design, and awareness raising; strengthen the microinsurance sector overall through co-financing and policy support; and work with national insurance schemes to address barriers to young women’s participation.

Implementing these opportunities effectively requires adapting marketing and engagement strategies to match young women’s information needs and preferred communication and delivery channels. In-person guidance, trusted role models, and multi-faceted campaigns can build confidence and understanding. Partnerships with CSOs, schools, and government can achieve scale and impartiality. The intensity of these engagements should be tailored to the vulnerability and independence of target segments.

Roles for FSPs and Funders

Many of the recommended actions above fall squarely within the purview of FSPs. But to ensure these strategies reach beyond young women who already fit the profile of the typically included, additional supports are extremely helpful. Unfortunately, the cost and capacity to provide these supports often exceed what FSPs can deliver on their own, and market incentives are typically not aligned to encourage providers to invest in long-term customer relationships. Maximizing young women’s financial inclusion will often require supportive actions from both FSPs and funders.