In Papua New Guinea, the Australian government works with the International Finance Corp. to provide access to financial services to the poor, particularly women. Despite gains made in banking the unbanked, the gender gap remains and many bank accounts are dormant. Photo by: IFC / DfAT / CC BY

Nongovernmental organizations can help facilitate financial inclusion by partnering with the private sector, spreading financial literacy through education, ensuring mobile phones reach women and voicing what financial services beneficiaries need, according to a group of industry leaders.

Despite gains in the number of people worldwide who have opened bank accounts — 700 million during the past three years — the gender gap persists and many bank accounts lie dormant, according to the most recent Global Findex report that measures how people interact with financial products.

The increase in the number of people banked “happened almost exclusively through use of digital technology,” said Mary Ellen Iskenderian, president of Women’s World Banking, during the Global Philanthropy Forum in Washington, D.C., last week.

Women are are less likely than men to own a mobile phone, she told Devex, which is a primary reason why “the gender gap didn’t budge.”

Another critical challenge is dormant accounts, or mobile money accounts with no transactions, or savings accounts with little or no money, said Douglas Sabo, vice president and head of corporate philanthropy and responsibility at Visa Inc.

“Of those who are now banked or financially included, are they really included if they're not using services we just gave them?” he asked at a panel that examined challenges to full inclusion.

How can the development community help?

Partnerships. To achieve true financial inclusion, the private sector is increasingly working with NGOs, Sabo said. Visa and CARE, for example, started a village savings model in Ghana where they took the village cashbox and worked with commercial partners to place the money into formalized accounts, which led to individuals also opening accounts of their own. NGOs have the local knowledge component which is critical in making such a program successful, he said.

NGOs can ally with banks to determine which products can really serve the poor and advocate for full financial inclusion by highlighting realities around account use and the full range of financial needs, Alex Counts, president and CEO of the Grameen Foundation, told Devex.

There needs to be more product development for the bottom of the pyramid, more flexible and differentiated products such as a no-frills account where users pay a slightly higher fee but get more benefits rather than a one-size-fits all approach, he said.

“It’s important to have different products for farmers versus those in an urban slum, and NGOs can add that local knowledge of the users,” Counts said.

Education. Education is a “crosscutting enabler of other issues,” Iskenderian said, and the development community can work to bring financial literacy into education programs.

Making people aware of financial services and integrating the idea of financial inclusion into the broader development platform instead of having stand-alone interventions would help increase account usage, said Simon Lowes, senior adviser on social performance at Chevron.

“We need a general economic development plan for communities with vocational training, business incubation to develop small enterprises and link to local content to then bring in microcredit,” he told Devex.

Equitable mobile phone dispersion and voicing customer need: The development community can play a role in ensuring that more mobile phones reach women and women own those phones, Iskenderian said, since women are less likely to own a phone than men and instead often share among family or friends.

Lower fees and rates, selling and distribution across more remote areas with less usage, with an aim at specifically targeting women, could make a difference, she said.

But it’s not just giving the cellphones that will make a difference, said Shamina Singh, executive director of the MasterCard Center for Inclusive Growth.

“We need to work from the customer back and ask what they need and ask what we need to do to help solve their problems,” Singh said, emphasizing that NGOs are in tune with the needs of those they serve.

Knowledge is important. Doorstep banking — where agents collect women’s money, put it in accounts for them and women then receive a confirmation alert on their cellphones, is one example of serving women’s needs that saves them time and makes sense. And in South Africa, to encourage usage, customers can use a card to receive cash back at the point of sale, making withdrawing money easier and causing usage to “skyrocket,” she said.

NGOs are “trusted messengers” in this process, Singh noted, contributing local context around distribution, education, registration in community centers or churches — places where NGOs have relationships.

Moving forward, Sabo said, it’s important to look at these partnerships and interventions that have worked, and bring them to scale so that they can be sustainable.

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About the author

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    Claire Luke

    Claire is a journalist passionate about all things development, with a particular interest in labor, having worked previously for the Indonesia-based International Labor Organization. She has experience reporting in Cambodia, Nicaragua and Burma, and is happy to be immersed in the action of D.C. Claire is a master's candidate in development economics at the George Washington Elliott School of International Affairs and received her bachelor's degree in political philosophy from the College of the Holy Cross.