Financial literacy to boost women's access to and usage of financial services
Societal norms and traditional gender roles can play a role, as women are often expected to prioritise caregiving responsibilities over financial pursuits
Bangladesh has shown tremendous growth in terms of access to financial services among the poor.
However, there are still significant gender gaps and inequalities in availing financial services. According to the Global Findex 2021, about 67% of women lack bank accounts and 80% of women have never opened a mobile money account. Evidence suggests that a lack of financial literacy is one of the key reasons for the gender gap in financial inclusion. Several factors contribute to women's financial literacy hurdles.
Societal norms and traditional gender roles can play a role, as women are often expected to prioritise caregiving responsibilities over financial pursuits. This can result in limited time and opportunities to learn about personal finance.
Furthermore, studies showed that women tend to have less interest in learning about financial issues, which may discourage them from seeking financial education or taking an active role in managing their finances.
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Cultural and systemic biases can further exacerbate the literacy gap.
Addressing these factors is crucial to empower women with the knowledge and tools they need to achieve a sustainable financial future and independence.
Recently, a2i has conducted research on women's financial literacy, titled "Financial Literacy in Bangladesh: A Gender-Specific Analysis of the National Status."
The findings of the research depicted that 72.5% of women respondents mentioned that they make the day-to-day financial decisions, and 37% mentioned that they decide household expenses all on their own, whereas 30% said it is done in discussion with someone else.
Approximately 32% of women respondents mentioned that household financial decisions are made by someone else which is either their spouses or in-laws or parents. This shows the variation of financial independence and decision-making roles among women in different households.
Women's Financial Inclusion Advocacy Forum (co-convened by Bangladesh Bank and a2i) and The Business Standard recently organised a roundtable to identify the significance of financial literacy for the financial inclusion of marginalised women, examine the difficulties associated with the challenges in receiving the financial literacy, and obtain the strategic guidance to enhance women's financial literacy.
Here is the summary.
Md Abul Bashar
Executive Director, FID, Bangladesh Bank
The Bangladesh Bank has already introduced a Financial Literacy Guideline which is mandatory for all banks and financial institutions to follow.
We have issued circulars and given instructions, there is a seven-year plan and the central bank is monitoring the banks' performance in this regard.
Bangladesh Bank's Financial Inclusion Department teams were sent to our eight divisional offices so that central bank and scheduled bank officials and the people there get the financial literacy staff introduced and implement our plan.
We incorporated six animated videos in the literacy package available at the financial literacy website which are helpful for the illiterate people in the remote areas and also for the women lacking financial literacy.
At a programme in Kurigram District a few weeks ago, I met many hand-to-mouth rural family ladies who were saving without access to formal financial services. In a month, agent banking outlets there opened 500 accounts with underprivileged people.
This is how financial literacy and inclusion are progressing here in Bangladesh.
The Bangladesh Bank has many refinancing schemes that let banks disburse soft SME loans to women at 5% interest without any collateral. Showing regular repayment the women and also the banks get a further 100 basis point interest waiver.
Many end up borrowing from informal money lenders at extremely high interest and get their wealth eroded over time, while some Tk10,000 to 50,000 soft loans could save them and help them thrive.
Unfortunately, of the Tk3,000 crore refinancing schemes for SMEs, banks showed little appetite to disburse the small loans. This should be changed if we mean financial inclusion.
Women across Bangladesh should be treated highly bankable as they save more than men and they are great paymasters. Other than a very few exceptions, women borrowers don't default on their debt repayments.
The socioeconomic development which Bangladesh has come through over the years did result in an improved financial inclusion of women. But we should eye much more.
All adult women should be financially literate and included and the Bangladesh Bank will continue its efforts. We urge all the stakeholders to participate and do their part.
Dr Sayema Haque Bidisha
Professor, Department of Economics, University of Dhaka
Financial inclusion has different depths and layers.
Many women go to microfinance institutions (MFI) to borrow and that might help improve the statistical picture. In structured formal borrowing from banks, women lag behind a lot.
For remittance or social safety net benefits, women are using MFS. The question is are they actively participating in the labour market, starting and running enterprises, or borrowing enough?
Financial literacy should translate to financial transactions and financial empowerment.
It is important that women have the proper control over their finances and resources. Social norms need to be addressed.
Lots of issues are common for men and women. But there are very specific issues for women.
When we talk the modernised technology, the modern way of transactions and entrepreneurship, we need the device, financial ecosystem and a gender-centric positive environment.
Often the male is answering the question made to the female with him.
There emerged several positive gender-centric initiatives like women agent bankers, and women serving in union digital centres. Simplification of licencing, registration, and usage is also important for women's inclusion. Government, NGO, and private sector efforts and media campaigns will help create momentum.
Shaheen Anam
Executive Director, Manusher Jonno Foundation
The most important thing is whether access to financial services or microfinance changes the position of women in families and in society.
Financial literacy and economic empowerment must change how society looks at women. Women should be treated as equal partners of men.
A more women-friendly environment is the bottom line so that they have meaningful access to all the services to thrive.
Humaira Azam
MD and CEO, Trust Bank
How fast an agent banking outlet mobilises several crore taka, reflects the eagerness of the rural and suburban people for saving money. It is a big positive change.
As Bangladesh's history of entrepreneurship and business formalities is not that long, there is a significant lack of preparedness among the micro and small merchants. We see many clients come to borrow without the concept of cash flow and debt servicing.
Many struggle with documentation processes, while those are crucial for a financial service provider. We also need to simplify documentation to mean financial inclusion and entrepreneurship development. Small loans to women should be much easier to disburse.
We need massive handholding in gender-focused SME business that needs a dedicated team to serve and help the small women entrepreneurs graduate. It is not commercially viable for banks often. Collaboration with NGOs having deeper reach among the rural women is a successful model.
Nahid Sharmin
Gender Analyst, Aspire to Innovate (a2i) Programme
We are on the "Smart Bangladesh by 2041" mission. Its elements — Smart Citizen and Smart Economy — are deeply interrelated and financial literacy is important there.
Without the financial inclusion of women who make up more than half of the Bangladeshi population, Smart Economy will not be possible.
Financial literacy influences women's decision-making, leadership and collective action.
They need money and control over resources for better health, education and life. Having money and control over that alone will not be enough. Because confident decision-making is important, which demands financial literacy.
Financial literacy is full knowledge, understanding and skill related to financial concepts and principles. It covers budgeting, saving, investing, managing debt, understanding financial products and planning for the future. It promotes financial well-being, stability and the ability to navigate the complex financial landscape. It empowers individuals to make informed and effective financial decisions.
An a2i study among more than a thousand people from 10 districts in five divisions this year reveals the gap between men and women in using mobile financial services (MFS) and various digital financial services (DFS) is narrowing down that reflects women are catching up.
However, women still lag behind in terms of the frequency of using financial services and informed and confident decision-making. For women's financial literacy and inclusion, we also need to come out of discriminatory social norms that hinder women's digital and financial access.
Many literate women even struggle with confident financial decision-making, they feel shaky and keep consulting with their male counterparts.
Suman Chandra Saha
DGM, SME Foundation
The a2i study reveals that women in Bangladesh are almost equally gathering and disseminating information nowadays. However, my understanding is they are left behind in terms of effective use of the information.
We need to discuss the atmosphere, environment and system within which our women will ensure the best use of the information for their financial inclusion.
How much the system is ready, user friendly and how much the financial industry practitioners are willing to accommodate women and increase their access to finance?
In the micro and small entrepreneurship segment, women come with great enthusiasm, mostly influenced by others. But they need to access the knowledge and know-how.
The SME Foundation has a dedicated department to encourage and help develop women entrepreneurs.
Our credit programme is for the missing middle, who are yet to be served by banks or microfinance institutions. Around 25% of the beneficiaries are women which is above the market average.
They face many problems. For instance, some complained that they often don't get enough attention at banks.
Almost all banks have special products, and programmes for women entrepreneurs, mainly due to the central bank obligation.
I would say, that no coat fits all and there should be fine-tuned for impactful financial services to women.
Maksuda Jahan Trisha
Lead, Enterprise Development Programme, OXFAM
MFS usage among women got the maximum push from remittance and social welfare benefits. Also, bill-paying opportunities attracted women users of MFS.
We observed the biggest barrier to the financial inclusion of women is the information gap. For example, why it is important to have a trade licence — too many women across the country are confused.
Serving across the rural market is costly for individual financial firms. It takes huge awareness campaigns for a long time to help the rural population go smart.
Collaborative efforts engaging financial industry players, NGOs, the private sector and development partners should help. There is a great need and scope for collaboration.
From our experience of working in several countries in South Asia and Africa, we observed women entrepreneurs in Bangladesh have a greater degree of willingness and eagerness. We just need to provide them with more information and opportunity so that they can come up.
Kym Cole
Initiative Director, WEE-Difine, Brac BIGD
There is a relationship between financial literacy and women's economic empowerment. I tend to be cautious about over-interpreting the relationship.
Financial literacy is a precursor to meaningful financial access. All the factors we are discussing here today such as social norms, and mobility impact women's financial behaviour.
Financial literacy can influence women's financial behaviour and contribute to their economic empowerment.
Collaboration among all the relevant actors is important to innovate ways for a wider financial literacy among women while keeping pace with the technology also is important.
Imran Ahmed
Deputy Executive Director, Shakti Foundation
We serve about half a million women in 55 districts in the areas of microfinance, health, women empowerment, environment and climate protection.
Women opening accounts to receive money is one thing, but how they use the money is subject to financial literacy without which usage of the services will not increase.
The financial industry does have products and services for women. The ecosystem including non-profits serving the vulnerable groups is also strong. But, do we have enough targeted products? Urban-rural and regional behaviours are different.
Partnership and collaboration will help increase financial inclusion. Micro enterprises by women are tremendous in Bangladesh and creating a business environment for them here will have a big impact on financial inclusion.
Nasrin Akter
Head of City Alo-Women Banking
Women's banking which started four years ago, is part of our women empowerment project. We have four or five university partners both in the capital and outside the capital who conduct our regular financial literacy courses. Twelve batches are already done.
We are not only in a banking product and proposition, we emphasise capacity building, product proposition awareness, financial literacy, and yard meetings to go to the grassroots of rural society.
We have more than six lakh women customers and out of that 42% are using plastic cards.
Only having an account is not financial inclusion, we have to let grow them in the transaction area.
The inclusion programme is working, but not as much as we were expecting.
Women's mindset is important here. Even in the urban areas, they are coming to banks, but being guided by their spouse, regardless of their level of financial literacy.
We ran a campaign "My money, my responsibility," to create awareness about confident decision-making and control over money. Readiness to be banked demands an understanding of documentation, I would say as a banker.
Sajjadur Rahman
Deputy Editor, The Business Standard
How financial literacy can boost women's access to finance and usage is our topic today. In Bangladesh, women in most sectors are lagging behind their male counterparts. According to an Asian Development Bank (ADB) study published in December last year, 65% of women are unbanked here in Bangladesh.
The gender gap is huge in ownership of a mobile phone and women make up only 7% of the small and medium enterprises (SME) sector borrowers.
In the financial services industry, female chief executive officers (CEOs) are rare in the country. Only one bank and an insurance company have female CEOs right now, while women often ascend to the immediate lower posts. It is despite the fact that women's productivity is often better than their male counterparts.
Access to finance and the use of financial services is crucial in modern-day economies and today's roundtable is to discuss the reasons why women are lagging behind and how to boost their financial inclusion through financial literacy.
Shahana Ferdousi
Additional Director, Bangladesh Bank
Women, literacy and usage — the three keywords I want to highlight today.
The Bangladesh Bank gave the banks and non-bank financial institutions (NBFIs) a target to disburse at least 15% of their CMSME loans among women, which was 5% in June 2022.
After the target set by the central bank, the disbursement improved a lot.
The central bank has many refinancing schemes that introduced mandatory allocation for women.
A dedicated women entrepreneur desk is mandatory for all bank branches to serve them specially. Bank branches are instructed to pick three entrepreneurs from the catchment area, train them and finance at least one of them.
Alongside the banking and NBFI sector, the Bangladesh Bank is working with cooperatives, insurance, and even capital market intermediaries for a national improvement in financial inclusion.
The Bangladesh Bank has had its financial literacy guideline and a seven-year action plan shared with the banks and NBFIs.
About social norms, I would say there needs awareness creation.
Financial literacy, digital literacy and digital financial literacy — these three are interrelated. However, they have specific elements to be addressed separately.
Women's financial access and usage improved. But, we are yet to reach the expected level and lots of work to be done for that. Financial service providers have a great role to play.
Shams Azad
Deputy Director, upay
Apparel industry workers are a large part of women MFS users in the country nowadays.
Our female clients are not struggling with basic usage of MFS — cash in and cash out.
A problem most of them encounter is related to the technology they use. Using a feature phone for MFS transactions is less convenient than that with a smartphone. In the case of feature phone transactions, many suffer from some inertia and they ask for help from supervisors or the MFS agents.
In advance usage of MFS — mobile recharge, bill payment — urban women are comfortable with while in semi-urban or rural areas it is not. Further advanced usage like savings or borrowing through MFS are yet to be popular enough and we are observing how things turn out to be here in Bangladesh.
Telecommunication, handset, MFS and of course the banking industry have to work together at an equal pace for the financial inclusion of women.
Of course, awareness creation is at the top of the agenda.
