Overseas gender gap means banking opportunity

Women in developing countries represent a significant underserved market and commercial opportunity for mobile financial service (MFS) providers, according to a study by the GSMA mWomen Programme and Visa.

The study, focused on women in Indonesia, Kenya, Pakistan, Papua New Guinea, and Tanzania, was undertaken to gain additional insight into how financial institutions and mobile network operators can better support the complex financial lives of women at the base of the pyramid.

Around the world more than 2 billion people, the majority of whom are women, lack access to basic financial services. The study, led by Bankable Frontier Associates, found that women often also face an additional burden of having primary responsibility for managing the household finances. These resource-poor women must overcome numerous challenges in managing their finances: incomes are low, irregular, and unpredictable, and formal financial tools hard to access.

Key report findings include:

•  Women actively contribute to household income-75% of women surveyed contribute some amount of income, most often from irregular sources like small businesses or agricultural sales.

• Women use a variety of tools to manage household finances-Nearly 60% of women surveyed are saving money for daily expenses and long-term needs and a full one-third pay the family's utility bills or make other types of remittances.

• Women recognize the security and privacy of mobile money-In Kenya, for example, 95% of women using mobile remittances rated them as secure and private. In comparison, only roughly half of those using personal delivery of cash as their primary method consider it secure and private.

"At Visa, we believe mobile technology is a key component in advancing financial inclusion, providing the excluded a convenient and accessible point of entry to the formal financial system," says Aletha Ling , chief operating officer of Fundamo, a Visa company. "This is particularly true for women, who face additional barriers to entering the financial mainstream and for whom security and privacy are critical issues. By working to build relevant services, expand distribution networks, and tailor their marketing efforts, the mobile financial services community can create better approaches for reaching this underserved group."

"This research clearly demonstrates that women play a critical role in the success of mobile financial services deployment," says Chris Locke , managing director, GSMA Mobile for Development. "It underscores the fact that services delivered via mobile phone can better meet women's financial management needs than many of the informal tools they use today and, equally important, provides actionable guidance about how MFS providers can best expand and market their services to better address women's requirements."

According to the report, women are active contributors to household incomes, and as household financial managers, they are responsible for a variety of transactions such as remittances, payments, and money storage that MFS providers are well-positioned to deliver. As an additional commercial benefit to MFS providers, when women's financial and payment needs are met consistently, they can be very loyal and evangelizing customers.

Furthermore, their role as primary recipients of government-to-person payments means that providers who serve women, may be better positioned to provide solutions for the emerging wave of payments in the future.

Daryl Collins, co-author of the seminal work, "Portfolios of the Poor," and a director at Bankable Frontier Associates, says: "This study has shown that low-income women undertake complex financial management for their households using a set of often sub-standard instruments. Women often work with high frequency, low value cash flows, which indicates a good match between the services they need and the opportunity for the mobile financial services industry to broaden and stabilize their consumer base."

To better serve low-income women, reduce the mobile phone gender-gap and increase the likelihood of commercial success for mobile financial service deployments in emerging markets, the report recommends:

• Increasing mobile access for women-34% of women in Tanzania, 13% of women in Kenya, and 10% of women in Papua New Guinea who want to try mobile financial services cite the lack of a phone as the main reason for not having done so. Closing this gender gap can help MFS providers build scale and volume for their mobile financial service businesses

• Increasing awareness and understanding of mobile financial services-To benefit from the stability and scale of active women customers, providers need to research how women in their markets learn and absorb information and tailor their communications. Investments in agent training and grassroots communications will help build awareness and more importantly, help educate women on the value of MFS.

• Delivering a high-quality customer service offering-Women tend to value convenience, reliability, security, and privacy in financial management tools. Investments in marketing, services, customer care, and agent networks will enable providers to better meet these needs. Accessible, well-trained and trustworthy agents will drive greater adoption among women and men alike.

• Improving understanding of and developing solutions to adoption barriers-The research also unearthed country-specific adoption barriers that need to be addressed with targeted solutions. For example, in Kenya, the lack of an identification card is a significant issue for women. In Pakistan, low literacy levels appear to contribute to women's limited understanding of mobile financial services. Country-specific research will lead to targeted marketing approaches that can broaden the potential user base for MFS.

While mobile financial services offer value to women household financial managers, there are several markets where adoption has been slow for both genders. Although barriers to adoption certainly vary by market, women in a given market tend to experience similar and yet more acute challenges than men, meaning a focused effort on women can also improve male adoption as well.