Baroness Goudie Blog: July Newsletter
This month I want to share two really important topics with you.
The first, a piece I have co-authored with Mayra Buvinic, an internationally recognised expert on gender and development and social development, for the Center For Global Development on the critical role technology plays in empowering women, and the areas that need focus to ensure progress can be made.
Secondly, is a piece by Stephenie Foster, a founding partner of Smash Strategies, which provides strategic advice to corporations, institutions and philanthropists to ensure that their investments in women and girls are effective and transformational. She shares her work with the African Women’s Entrepreneurship Program (AWEP). AWEP was launched, in conjunction with the 2010 African Growth and Opportunity Act (AGOA) Forum, as part of the U.S. Department of State’s International Visitor Leadership Program (IVLP). Every year, U.S. Embassies in Sub-Saharan Africa nominate leading women entrepreneurs to participate. Stephenie has been working with the group to build their professional and personal goals for the IVLP. She writes about her learnings on how these women and many like them are driving economic growth across the globe.
I hope you enjoy these pieces and use the information shared to drive equality across the world through your own work.
Enjoy the summer.
Baroness Mary Goudie
Empowering Women, Changing Mindsets: A Conversation on Technology and Financial Training
We first collaborated in 2010 at the inaugural meeting of Vital Voices’ La Pietra Coalition to call attention to the need for banks to sex-disaggregate their clients’ portfolio as a first step towards better serving the women’s market—an estimated 1 billion potential customers. Back then we had little knowledge that technology might be the magical wand to get financial services in the hands of women.
Eight years and millions of mobile financial transactions later, we came together again at a private CGD (Center for Global Development) roundtable in London to discuss the potential of mobile banking and savings for women’s economic empowerment. We were pleased to hear the richness of research evidence and interventions on women’s financial inclusion that have emerged over the past decade. What follows are some takeaways from our deliberations, informed by this research and practice:
Technology can widen financial access and be transformative, but with some caveats…
Mobile money has increased women’s access to financial services, especially in poor countries that have been underserved by banks. But the explosion in mobile technologies and mobile banking has yet to narrow the nine percentage point gap between the number of male and female bank account holders—a gap unchanged between 2011 and 2017 over three editions of the Findex survey.
There is some good news: subsidizing women’s mobile phone ownership and designing customized financial products for the women’s market may help narrow this gap. In 2010, the Cherie Blair Foundation documented a 21 percent gender gap favoring men in mobile phone ownership in low and middle-income countries, with cost being the main barrier for women. Unfortunately, their efforts to provide mobile technologies to women have often been confronted by poor mobile infrastructure and mobile providers’ lack of awareness of the need to include women in segmentation strategies and marketing services.
Women for Women International seeks to improve incomes of and empower marginalized women in conflict-affected countries. It channels monthly stipends to women attending their 12-month long group training through formal bank accounts, where these exist. Women in Nigeria, however, often close them at the end of the program because of the accounts’ fees and administrative challenges. (Women for Women International is currently conducting a randomized control trial in Nigeria to assess if follow-up mentoring and membership in village savings and loans associations affect women’s economic outcomes—results are due in 2020.)
Mobile savings are preferred by women and have unexpected “‘empowerment”’ outcomes. The privacy of individual savings accounts and the mental allocation of funds in commitment savings plus helpful design features such as reminders to save all contribute to empowering women, especially those who are less empowered than others. Empowerment is most often measured by women’s increased decision-making over household expenditures. But savings are comparably low profitable products for financial sector providers and hard to commercialize. If savings are the entry point for women’s financial inclusion, the cost-effectiveness case has to be made and communicated to banks and other financial service providers. Both women’s preferences and constraints need to be better understood so a wider range of more profitable financial products (including insurance) can be designed using savings as the entry point.
Financial training can increase use of financial products and may itself be empowering but these effects may not last, especially in adverse environments.
Two randomized control trials led by CGD and partners in Tanzania and Indonesia document that financial and business management training, bolstered by access to mobile savings, increases women’s use of mobile savings, improves business practices (as measured in Tanzania), and empowers them. But these are short-term results and we can only hypothesize about the mechanisms that have triggered this greater empowerment.
The trainings had broadly similar contents (financial literacy and basic business concepts) but were of very different durations. The training in Tanzania, conducted by Technoserve, was a six week-long course, while Mercy Corps’ training in Indonesia was a single three-hour session, plus three follow-up mentoring sessions. Both trainings and the mentoring were done in groups. They were of high quality and effective in increasing knowledge on the product and usage of mobile savings. But they have yet to increase incomes, so we believe the empowerment effects are directly related to both the financial knowledge gained and the confidence building resulting from the training and the group’s social support.
Other evidence backs the importance of social validation and self-affirmation, especially (but not only) for women. The World Bank Africa Gender Innovation Lab research has shown positive income effects when enhancing psychological messages are combined with business training for women entrepreneurs (here and here). Cognitive therapy to depressed new mothers in Pakistan resulted in increased empowerment seven years later. Positive thinking, more generally, can help boost students’ test scores, women’s savings, the work effort of microentrepreneurs, and other behaviors that help poor people increase their incomes and improve their lives.
Interventions can empower women in the short-term but what about entrenched traditional mindsets in financial and business environments?
Financial products need to be smartly designed to respond to women clients’ preferences. For instance, CARE’s GRAD program in Ethiopia broadened communication channels that financial service providers used to include radio and more informal channels that reached women better. And it used informal savings groups as a stepping stone to formal ones.
But financial products (and training) also need to be free of gender biases. Women (especially poor women) are widely and wrongly perceived as less productive and more economically dependent than they really are. For interventions that seek to empower women economically to truly succeed, these mindsets need to change. One way to de-bias the provision of financial services may be to have female bank agents. The Girl Effect Accelerator project supports Zoona, the largest mobile money operator in Zambia, where 60 percent of the 400 mobile agents are young women from poor communities. The Girl Effect observes, however, that managing agent networks (male and female) requires significant oversight and personnel. The Indonesia study, which also has experienced challenges managing mobile bank agents, is testing to see if financial incentives to mobile bank agents improves performance and de-biases financial service provision, increasing the numbers of women clients reached with mobile savings (more to come!). Sex-disaggregated data on customers’ needs and performance and rigorous evidence on the benefits of full financial access for women should provide the basic rationale for and further help changing mindsets.
With all this shared and more, the roundtable still ended with lingering questions, such as:
1. How can financial training be delivered to customers sustainably on a larger scale?
2. How do we take social change up to scale in the digital world?
3.… and with a call for partnerships to move the needle on financial inclusion for women and for open data sharing partnerships.
CGD blog posts reflect the views of the authors drawing on prior research and experience in their areas of expertise. CGD does not take institutional positions.
African Women: Leaders in the Economy and Society
Expanding markets. Ensuring quality control. Accessing supply and value chains. Broadening networks. Addressing management challenges. Showcasing women’s leadership. And yes, advocating for change.
These are topics that a dynamic group of African women entrepreneurs are focusing on during their visit to the U.S. as part of the African Women’s Entrepreneurship Program (AWEP). AWEP was launched, in conjunction with the 2010 African Growth and Opportunity Act (AGOA) Forum, as part of the U.S. Department of State’s International Visitor Leadership Program (IVLP). Every year, U.S. Embassies in Sub-Saharan Africa nominate leading women entrepreneurs to participate.
Stephenie Foster, founding partner of Smash Strategies, leads the 2018 AWEP participants in a business leadership workshop.
While in the U.S., the group is meeting with government and business leaders as well as entrepreneurship experts. Their meetings address topics such as U.S. business practices and African access to U.S. markets, integrating African women into the global economy, and funding access for commercial expansion in Africa. These women are leading actors in economic growth and social advocacy in their communities and countries. AWEP’s alumnae have created thousands of jobs and established more than 20 women’s business associations across the Sub-Saharan region.
I worked with this group as they crystalized their professional and personal goals for the IVLP and made concrete plans to use new contacts and skills when they return home. We discussed the challenges they face as business leaders and women and the centrality of developing strong leadership and communication skills. The group brainstormed about how to address their challenges as leaders, managers, and innovators; how to successfully confront gender norms and policies that can hold back women’s economic success; and how to effectively exercise authority.
These women and countless others across the globe are central to creating jobs and economic growth. Research by McKinsey Global Institute shows that if women participated in the labor force at the same rate as men globally, GDP could increase from $12 to $28 trillion by 2025. This is an 11-26 percent increase, which at the highest level is roughly equal to the combined GDP of the U.S. and China, the world’s two largest economies. In Sub-Saharan Africa, GDP would increase by 12 percent. Supporting women is not only important for these women and their communities and countries, but for all of us.
Here are some of my takeaways based on my conversations with this year’s AWEP participants:
- Networks make a difference. Bringing women together creates strong networks and helps people learn from each other’s successes and mistakes. On visitor programs, participants meet and interact with many U.S. experts. But just as importantly, they meet and bond with each other, make connections based on shared experiences, and create lasting support systems. The AWEP group identified strengthening networks as key for two reasons: first, it helps each individual make connections and second, it provides a platform to share knowledge with others.
- Documenting successes and leading by example are important. As the group noted, both quantitative data and qualitative documentation make the case for women’s economic impact. Research data is foundational and can win over those who are skeptical about the impact of women on the economy. And telling the stories of successful women-led businesses and their economic impact grabs and holds attention. These stories of women’s contribution to job creation and prosperity can inspire other women and help build support among policymakers. Additionally, harnessing interest in women’s economic empowerment can start conversations about how communities flourish when women are fully engaged and how to address other issues that hold women and girls back.
- Governments and businesses are key partners to accelerating women’s economic participation. Entrepreneurs are innovators and bring their skills and talents to product development, but they need partners in government and business. For example, women have a harder time than men accessing finances. Governments can address many of the issues that create barriers, such as laws that make it hard for women to borrow money, and banks can support creative ways for women to handle funds, including mobile banking technology that would allow women at marketplaces to make deposits on the spot. Everyone must be part of the solution.
The bottoms line is that these business leaders are fully engaged, creative, and looking to make collective and individual impacts. Their efforts change lives and communities every day. Supporting them is a privilege.