DHAKA, Bangladesh – Kulsu Matar radiates confidence as she makes her way through a sea of colorfully dressed May Day protesters in the center of Dhaka. She has already been working for one of Bangladesh’s labor unions, representing ready-made garment workers, for two years. Before that, she was making clothes in a factory, a job she took when she was 18.In her young career, Matar has risen through the ranks and become financially independent. But despite making a regular income for the past four years, she opened a bank account only two years ago.
“I did have a job, but there was no money left at the end of the month,” she says. “I simply didn’t see the reason to open a bank account.”
When she left the factory behind and took a job with the union, she found she could finally start saving. Now she uses her bank account to set aside up to $12 every month.
But Matar is in the minority. While women’s participation in the formal workforce is rising, women’s access to financial services in Bangladesh remains low.
Bangladesh has a gender gap in account ownership of 29 percentage points, one of the highest of the world, according to the World Bank’s 2017 Global Findex database. This wasn’t always the case. As recently as 2014, the gap between men and women’s access to accounts was 9 percentage points – the average for the developing world. Women’s bank account ownership in the country has increased by 10 percent to 36 percent since 2014, but it still lags far behind men’s at 65 percent.
Why has the gender gap got wider? Until recently, bank accounts were not common in Bangladesh – virtually nobody had one, regardless of their gender.
But that has changed in recent years. Though the vast majority of transactions in Bangladesh still take place in cash, a growing trend toward wiring salaries to people’s bank accounts has seen many salaried workers open accounts for the first time.
“We are turning to a digital society where financial things will be operated through bank accounts,” says Abu Mehedi Imam, information and communications manager at the United Nations Development Program in Bangladesh.
As men are far more likely to be employed at all, and to have higher-paying jobs, the growth in account ownership has been almost entirely among male customers, Imam says. And because of wider issues of discrimination in the country, women have been left behind. “Females are not that open to the society, to the daily needs,” he says.
“We need to work rigorously to create awareness of the benefits of savings and formal accounts to women,” says Tapati Saha, an analyst at the U.N. Women Bangladesh women’s economic empowerment program. “Also to undertake financial inclusion programs under private financial institutions to encourage small savings of women.”
Power and Transparency
Organizations in Bangladesh working to increase women’s financial inclusion believe there are several reasons for the gap.
Humaira Aziz, director of the women and girls empowerment program at CARE Bangladesh, points to patriarchal social norms that limit women’s mobility, confining their roles to the household, and giving men most of the financial decision-making power.
“The kind of sectors women are engaged in are exploitative and therefore [employers] prefer payments in cash over bank transfers.”
“It’s generally considered the responsibility of men to take care of the financial management and budgeting,” she says.
Imam says there will continue to be a gender gap in account ownership in Bangladesh as long as there is a gap in workforce participation.
“It’s actually not very surprising to see that women aren’t opening more bank accounts, given their lower participation in the formal labor force,” Imam says.
In Bangladesh’s cash-heavy society, the only motivation for many people to open a bank account is when their employer decides to pay their salary electronically instead of handing it out in cash.
With labor force participation of Bangladeshi women at around 30 percent – compared to 80 percent for men – women are far less likely to receive a salary, giving them no reason to open a bank account.
And for those who do work in the formal economy, some are discouraged by their employers from opening a bank account – electronic transfers offer more transparency, making it harder for employers to underpay workers or take a cut from their wages.
“The kind of sectors women are engaged in are exploitative and therefore [employers] prefer payments in cash over bank transfers. When an employee opens a bank account, it’s more difficult to exploit them,” Aziz says.
Untapped Economic Potential
To help more unbanked women get access to financial services, several companies have recently begun offering basic financial services using text messages or mobile phone apps. Requiring little administrative procedure or paperwork, they make it easier to send and receive money, especially for women in rural areas who live far from the nearest bank branch.
Some of these women are trying to earn an income, but they’re not able to invest or develop any kind of asset because of the lack of financial inclusion. That’s a big risk if the country wants to achieve its economic growth or get out of poverty.”
But the reach of those solutions is limited, as they are only available to women who have a mobile phone. According to GSMA, an organization representing the interests of mobile operators worldwide, women in Bangladesh are 33 percent less likely to own a mobile phone than men and 63 percent less likely to use mobile internet.
“There’s a relatively large gender gap in mobile phone ownership between men and women in Bangladesh – meaning that women at the start are already disadvantaged to use mobile money since they don’t have access to the technology to use it,” says Dorothe Singer, a World Bank economist who co-authored the Global Findex 2017.
That means many women still need a bank nearby in order to access financial services. But the branches’ limited opening hours and locations, often far from where many women live and work, make it difficult for women to fit bank visits in around their jobs and family obligations.
By neglecting to reach out to women, policymakers and financial institutions are not only leaving a large portion of the population without substantial long-term savings, but also risk missing out on massive economic potential, says Aziz. She says even small initiatives would help, such as banks setting up help desks specifically catering to women or going door-to-door to educate women on the benefits of bank accounts.
“Some of these women are trying to earn an income, but they’re not able to invest or develop any kind of asset because of the lack of financial inclusion,” she says. “That’s a big risk if the country wants to achieve its economic growth or get out of poverty.”
Back at the protest, Matar pushes her way through a group of people on her way to a union meeting to rally public support for better working conditions in garment factories. She knows that as a working woman in Bangladesh who is making enough to put money into savings, she is the exception. And right now, she is focused on helping more women get to the point she reached two years ago.
“After all, it’s not just about having a bank account, you also need to have money to put into it,” she says, as she’s swallowed into the crowd.