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MicroCapital Monitor - June 2017
Category: Microcredit | By SDR, 16-Jul-2017 | Viewed 162  Comments 0 | Source Bob Summers
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MicroCapital Newsletter
MICROCAPITAL MONITOR | PREVIEW EDITION JUNE 2017 | VOLUME.12 ISSUE.6

EAR TO THE GROUND - Featured Article



Increasing the Gap: Will Digital Financial Services Leave Women Behind?



Earlier this week, I led a discussion on women and digital financial services with the Digital Frontiers Institute. Digital finance has great potential to help women store and borrow money safely and privately - and close to home. A recent study by Tavneet Suriand William Jack shows that women in Kenya who use mobile money increase consumption enough for 2 percent of them to step out of poverty. It seems that access to a convenient channel to receive remittances, make payments and store money may help women allocate funds more efficiently. This can lead to more savings, which tends to improve household wellbeing. 

Of the women in the Kenyan study who saved more, many used multiple channels, including cash, banks and savings clubs in addition to mobile money accounts. So far, digital financial services seem to be complementing more complex services rather than replacing them. Digital services can give women their first experience with formal services or offer them a convenient transactional platform. Yet their depth of engagement is still lackluster as women continue to face constraints to both adoption and usage. 

While some transactions - such as receiving remittances - are a strong match with mobile money, others may be cost-prohibitive. Women are generally poorer and thus more price sensitive than men. Even in Kenya, the birthplace of M-Pesa, GSMA reports that women are almost equally likely to have tried mobile money as men, but are less likely to actively use mobile money (52 percent of women vs 60 percent of men used mobile money over a 7-day period). I believe that transaction costs are a critical reason for this. 

Poverty is not the only barrier to women's adoption and usage of digital services. Women often are excluded from a range of social and economic spheres due to social and structural gender norms. This can be exacerbated by technology if there isn't a concerted effort to be inclusive. In Pakistan, for example, men's use of traditional bank accounts is twice that of women's. When we include technology in the banking relationship, we find that women's exclusion increases exponentially - women are seven times less likely to have a mobile wallet in Pakistan. In Bangladesh, 90 percent of the 21 million micro-finance clients are women. This high-touch financial service clearly works for women, who still only represent 18 percent of mobile money users. 

Although technology can increase productivity and efficiency, it can also exacerbate differences between the ?haves? and the ?have-nots,? propelling the incomes of the well-off more than that of those with fewer skills and less capital. While there is plenty of private investment flooding into digital finance, public monies would be well-spent seeking to ensure broader inclusion outcomes in digital finance. Otherwise, small increases in income by poor women may be overshadowed by even greater economic and social divides.


About the Author:

Ms Barbara Magnoni is President of EA Consultants, a development-consulting firm based in New York. She has 25 years of international finance and development experience and has worked with organizations including Goldman Sachs, Chase and BBVA and has advised institutions such as the International Finance Corporation, the US Agency for International Development and the International Labour Organization. She may be reached at +1 212 734 6461 or bmagnoni[at]eac-global.com, or you may follow her on Twitter at BarbaraatEA. !


An invitation from Bob Summers, Executive Director of MicroCapital Monitor



Dear members and friends of Rotary International, MicroCapital is pleased to offer you a sampling of the news and information we offer each month on microfinance and other forms of impact investing through the MicroCapital Monitor!"

https://www.microcapital.org/downloads/monitor_volume12/MicroCapitalMonitorPreview_Jun2017.pdf

To get all the news and features we have to offer, we invite you to consider purchasing a subscription to the complete edition. If you'd like a complimentary sample of the latest, complete edition of the Monitor use this link to contact us :  https://www.microcapital.org/ask-a-question/

Sincerely,

Bob

Bob Summers
MicroCapital
Boston USA
+1 617 648 0043

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