The Truth About Women and Money

“Women are awesome with money.”

This line is how I introduce the subject of women’s financial inclusion in my talks. It always gets a bit of a laugh, probably because it defies stereotypical conceptions of women’s financial ability.

Eva Gantz speaking on Unlocking Economic Participation for Millions of Women
Unlocking Economic Participation for Millions of Women at Detroit AlterConf

But in the financial inclusion world, women are front and center: Many organizations and initiatives are in fact exclusively focused on women. Why? Because women save a larger percentage of their incomes, have higher loan repayment rates, and tend to make equitable financial decisions.

This emphasis on women’s inclusion might come from the desire to close the financial gender gap, but it also stems from the idea that financially including women has reverberating benefits for their families and the wider economy.

Research demonstrates that women tend to make decisions that increase equality of family members. One example is a mother sending both her son and daughter to school, regardless of their perceived earning potential. They also tend to invest profits they make back into their families.

It’s easy to see how these equitable decisions could result in more opportunity for the entire family.

It’s Complicated: The Gender Barrier

Women are awesome at money despite the current financial structure. Women have significantly less financial access than their male counterparts. The precise numbers vary from country to country, but unequal economic access for women—including formal bank accounts, credit, and mobile money—remains a constant.

the gender gap in formal savings 2016
Source: World Bank

Here are some of the obstacles to financial access for women worldwide:

  • Male relative’s permission
  • Property rights
  • Mobility
  • Legal identity
  • Education
  • Financial abuse

All of these variables combine to prevent women from accessing critical financial services. If an economic initiative doesn’t actively include women, it will invariably leave them behind.

Given the wealth of research demonstrating both the gap in female economic access and the great potential to be realized from bridging that gap, it becomes clear: Women are the key to financial inclusion

For Which Women?

The studies cited above, and countless others, conclude that when women have financial access, the whole world will reap the benefits.

But the logic of this conclusion—that women will amplify benefits to their families and communities—relies on the assumption that when we say “women,” we actually mean “mothers.”

It also evokes pernicious expectations that women must perform unpaid emotional labor, while none of that responsibility falls on men.

We must acknowledge the present reality—that women perform emotional labor and act as primary family caregivers—while also acknowledging that this reality is unjust. We also can’t say, “Women are _____” without confining women to a narrow category of expectations and assumptions.

Moving forward, let’s clarify which women we mean. For example: “Financially including women with children can benefit the whole family” is significantly more accurate (not to mention less sexist) than saying “Financially including women can benefit the whole family.”

Context is Everything: A Closer Look at Mobile Money

The benefits of the financial inclusion of women to broader society will depend on the particular demographic. It’s possible that the inclusion of some groups of women will have a reverberating effect on the wider economy and equally possible that wider inclusion of other groups of women inclusions will not have the same effect. And there’s no one solution that will work for billions of women.

Let’s look at one flexible solution: mobile money. It can play a key role for different groups of women all over the world, and can work as a customizable tool in culturally specific contexts.

Mobile Money Overview

Mobile money is exactly what it sounds like: financial services on a phone. Users can transfer money, make payments, and even have a mobile bank account. One of the most well-known mobile money systems is M-pesa in Kenya, which more than half of all Kenyans now use.

Mobile money represents a significant opportunity for women to join the larger economy, save money, and gain more independence.

The benefits and use cases are vast and varied: An entrepreneur could make a deposit to her savings account without leaving her shop, saving both bus fare and lost sales. A son could send a portion of his earnings back to his mother who lives in a rural town miles away, and neither of them would need to visit a far-off bank branch. A woman could send tuition to her child’s school in another country and have it arrive in the local currency, without ever worrying about cashing out the funds.

Furthermore, 90% of women in low- and middle-income countries report feeling safer because of their mobile phones, and half of these women earn supplemental income with their phones (GSMA).

Yet, while mobile money adoption increased 31% globally in the past year alone, women’s adoption still lags behind.

Map of the mobile phone ownership gender gap
The gender gap of mobile phone ownership by country (GSMA)

Let’s Get Intersectional: Accounting for Access, Region, and Class

But when we say “women’s” adoption, do we really mean half of the entire global population? It turns out that a confluence of factors influence the likelihood of a woman’s mobile phone ownership:

  • Income: Higher household incomes correlate with more mobile access.
  • Location: Urban women are 23% more likely to own mobile phones than their rural counterparts.
  • Age: Women between 14 and 27 have the highest ownership rates.
  • Occupation: Professionals, business owners, and students own more mobiles than homemakers, artisans, and farmers.
  • Education: Ownership correlates positively with education level.

Other, subtler factors are also at play, including “the social norms around how women and men make financial decisions in a household, the ‘appropriateness’ of men and women interacting with sales agents of the opposite sex, and community perceptions of male and female roles” (GSMA 2015).

While women as monolith are 14% less likely to have a phone, that gap rises to 38% for women in South Asia. As suspected, “women” is too broad a group to hold significant meaning.

Cost is reported to be one of the biggest barriers to mobile ownership—even inexpensive phones typically cost nearly a whole month’s income for someone in rural India. The gender income gap means that women are simply less likely on average to have the funds for a phone.

But cost is by no means the only obstacle; barriers like harassment and (lack of) security also prevent women from owning mobile phones. In Jordan and Egypt women report that men randomly dial numbers in hopes of reaching (and subsequently harassing) a women. Phone harassment of women is so prevalent in India that officials set up a special help line just for reporting it. In Colombia especially, women’s fear of theft when using a phone in public also discourages them from phone ownership.

Percentage of women who say security is an obstacle to phone ownership (GSMA)
Percentage of women who say security is an obstacle to phone ownership (GSMA)

These barriers represent real, serious risks for women, and they affect women in certain communities more than others. GSMA suggests that mobile operators can help push past harassment issues by “build[ing] on the perception of mobile phones as a tool to increase safety for women, by developing ‘safety’ services.” Yet marketing campaigns and/or other unrelated security features do not solve the current issue. Only community-designed, highly localized solutions will be effective in changing the issues that prevent mobile ownership.

Toward (One Thousand Customized) Solutions

No single implementation of mobile money can bridge the gender gap. But a combination of approaches can make a world of difference.

We believe that financial inclusion for women will come from a thousand different approaches, each custom built for the community it serves. The Stellar network functions like a blank, open canvas, supporting an infinity of use cases. With each new app, service, or product built, we take another step toward full economic participation for every woman around the globe. Stellar.org envisions a world where everyone—regardless of arbitrary factors like gender, income, location, and nationality—has the tools they need to independently improve their own lives.

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