Since the launch of the Sustainable Development Goals in September 2015, there has been a steady drumbeat of headlines, research reports and conferences dedicated to quantifying the economic value that could be unleashed by achieving gender parity, particularly in the realm of economic participation.
A McKinsey’s report released last year entitled “The Power of Parity” raised the eye-popping possibility that $28 trillion – an increase of 26 percent – could be added to global annual GDP if women’s role in labor markets were equal to that of men’s. The World Economic Forum highlights the “economic dividends” of equality, noting “economic gender parity could add an additional $250 billion to the GDP of the United Kingdom, $1,750 billion to that of the United States, $550 billion to Japan’s, $320 billion to France’s and $310 billion to the GDP of Germany.” A veritable cottage industry of researchers has sprung up in recent years to provide solid proof of the social, economic and environmental benefits to countries, companies and communities that would result from closing the economic gender gap.
And yet, in the face of this mounting evidence, last week the World Economic Forum released its “2017 Global Gender Gap Report,” which showed that the global gender gap had actually widened for the first time since they began collecting this data in 2006. The Index measures 144 countries on their progress toward gender parity across four themes: economic participation and opportunity, educational attainment, health and survival, and political empowerment. The most progress has been made toward closing gaps in education and health, where gender gaps narrowed to 4 percent and 5 percent, respectively. But progress toward greater economic participation and opportunity for women has actually gone into reverse, with the gap widening to 42 percent. At this rate of change, the WEF estimates it will take 217 years for women’s access to economic opportunity to be on a par with men’s.
With all that’s going on today, I’m not sure the world can afford to wait that long. As discouraging as the news from the WEF report is, the benefits to the global economy – not to mention the impact on peace and security that particularly accompany inclusive growth – are too great to postpone any longer.
One of the most effective accelerators of economic participation, particularly in regions such as Africa and South Asia, where the gap in economic opportunity is greatest, is financial inclusion. Over 1 billion women around the world don’t have a bank account in their own name. Based on our research on financially underserved women and the Global Findex, that number explodes to closer to 3 billion women when we include those who do not have access to more than one financial service. In fact, according to our estimates, these women represent an untapped market opportunity for financial service providers estimated at over $1 trillion.
And those banks, insurance companies and mobile money providers that recognize these women as clients rather than as victims or charity cases are reaping the benefits. They’ve discovered that women are loyal, profitable customers: They have better loan repayment records and they are longer-term, “stickier” savers. Even if they make less money than their husbands, they typically take on the role of household risk manager and, as a result, purchase more insurance than men.
One such bank that has seen impressive results by serving women clients is Interfisa Banco in Paraguay, which is part of the Women’s World Banking Network and reports data to us regularly. Since launching a product specifically designed to meet the needs of rural women, the bank’s loan portfolio has grown annually by 30–40 percent and loans outstanding to rural clients at year-end 2015 represented 45.5 percent of total loans outstanding, up from 14.7 percent five years earlier. And, best of all, 40 percent of this expanded rural portfolio is comprised of loans to women farmers.
With the advent of digital financial services, mobile network operators (MNO) are increasingly becoming drivers of financial inclusion. In Pakistan the largest MNO, a company called Jazz, offers a mobile wallet known as JazzCash. Management saw that only 15 percent of their customers were women, but that once women had opened an account, they were avid, profitable users of the product.
The company soon realized that their customer acquisition strategies were at odds with cultural and social norms. For example, the most common method for opening an account in Pakistan is through agents – and according to our customer research, which has yet to be published, 95 percent of these agents are men. And, what’s more, to open an account, the customer must provide the agent with her cellphone number – a practice that was deeply uncomfortable for many Pakistani women and their families. Jazz is now working to identify alternative, culturally appropriate ways to get new women clients on board, including building referral networks among women and training women agents.
Interfisa Banco and Jazz represent just two examples of financial service providers that see the value in serving women and are reaping the benefits of investments in product design and marketing strategies tailored to women clients. Not only is the business case for women’s financial inclusion strong, but it also represents the surest way to accelerate progress in closing the gender gap in economic opportunity. We need to jumpstart the expansion of women’s economic participation in every way we can, because two centuries is just too long to wait.
The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of News Deeply.