Regulating Finance for Gender Equality: A New Approach

“Strolling through the market in Harare, I approached a woman sitting on an upturned bucket. After some conversation, I learned that despite her market business she did not have a bank account. ‘But why?’ I asked incredulously. ‘This is where I am. I would love to visit a bank to open a bank account, but I do not have time to go to a bank due to my many domestic commitments’ she responded, clearly frustrated by the lack of time her household duties and work afford her – a systemic barrier to opening an account felt by countless women around the world. ‘If a bank wants to have me as a customer, then they need to come to me!’”

This anecdote, shared by Alliance for Financial Inclusion (AFI)’s Audrey Hove at the annual convening of CGAP-hosted FinEquity Africa, is a reminder for regulators and market facilitators of who they should be regulating for – women like the one Audrey spoke to in the market.  

There is growing momentum and demand for gender lens regulatory analysis in Africa, as was apparent at a CGAP workshop for regulators and market facilitators following the FinEquity Africa convening last month.  Regulators and market facilitators across the continent have the opportunity to redefine financial sector policymaking, ensuring that gender inclusivity is at the heart of its economic agenda, beginning with the recommendations below. 

New advocacy efforts must bring gender equality top of mind for financial sector regulators

Advocacy fosters vibrant dialogue among diverse groups, nurturing participatory policymaking that amplifies all voices 

The Women's Digital Financial Inclusion (WDFI) Advocacy Hub exemplifies this. In Ethiopia, for instance, a cross-sector coalition led by UNCDF is catalyzing Ethiopia’s digital financial inclusion and spurring the financial sector to reach women effectively with services that cater to their needs. By bringing the National Bank of Ethiopia which regulates financial inclusion, the Ministry of Women and Children Affairs, and the Ministry of Labor and Skills together with a host of financial service providers and NGOs – the coalition provides a platform for real-time engagement on how policies are shaping market actions, and where challenges still require more attention.  

Through evidence-based advocacy, policy frameworks can become more inclusive and equitable

For example, GRID Impact, in partnership with the Bill and Melinda Gates Foundation, presented a comprehensive analysis of barriers faced by different segments of women in usage and access to financial services that included five countries in Sub-Saharan Africa. Among financially included but under-served women, evidence points to major barriers, many underpinned by gender norms. These include a lack of female agents in Nigeria and Tanzania where norms restrict interactions of men and women, insufficient women’s digital literacy in Ethiopia where gender norms curtail women’s education and digital access, and unclear information regarding products and services in Kenya and Uganda. Consistent across all markets is a lack of financial products and services that meet women’s financial needs given the very gendered nature of their economic activity, personal aspirations, and familial obligations.  With insights into agent dynamics, Nigeria developed a national strategy for leveraging agent networks for women’s financial inclusion, which includes incorporating more women into agent networks to overcome the normative barrier of mixing genders. Nigerian regulators are now focused on implementing these strategic priorities.   

Market facilitation initiatives must support institutional reforms amongst regulators to foster gender-inclusive approaches 

Capabilities and incentives shape regulatory institutions’ ability to apply a gender lens to regulations. Historic de-prioritization of women’s financial inclusion due to the normative prioritization of men’s economic activities means that institutions must invest in change management to prioritize gender equality. Institutional incentives such as the Bank of Zambia’s Strategic Plan for 2020-2023, which mandates the development of gender action plans and targets a narrowing of the gender gap in financial inclusion to 5%, are pivotal. Such incentives drive the motivation of staff to take up the topic of gender equality. Moreover, they encompass the mandate of the institution itself and its accountability mechanisms. Market facilitators have a crucial role to play in highlighting the economic and social impact of women’s financial inclusion, thereby motivating the development of strong mandates and promoting gender equality.  

Complementing institutional incentives and institutional capabilities are also essential for effective gender analysis and regulatory reforms.  These could include the collection and analysis of gender data, community consultation mechanisms, regulatory enforcement mechanisms, and protocols for linking research with action. For instance, the National Bank of Rwanda leverages its electronic data warehouse to pull granular data from supervised financial service providers and then cross-reference client gender with the national ID database, giving it the capability to construct indicators on a range of topics. Using this data, and in light of gender-based credit gaps in Rwanda driven by lack of collateral, the National Bank has created a Women’s Guarantee Fund to facilitate women entrepreneurs’ access to credit with private sector institutions. Without institutional capabilities like these, even a well-intentioned regulator might find their hands tied when attempting to conduct gender lens analysis and make regulatory reforms.

Gender data is one component of institutional capability, and market facilitators not only contribute to the analysis of gender data but also act as data generators, as evidenced by surveys like the FinScope, which provide valuable insights into norms-driven consumer behaviors and motivations. Collaborative efforts between market facilitators and regulatory institutions ensure that gender considerations are not only acknowledged but also actively integrated into regulatory frameworks, thereby promoting more equitable and inclusive financial systems. 

Putting gender at the center of regulatory analyses will spur more gender-intentional regulation  

Both incentives and capabilities are pre-cursors to gender lens analysis of regulations, which is a building block to creating gender-intentional regulation. These analyses can look at various actors in the financial ecosystem. For example, a gender lens analysis of agent regulations yields insights into the types of agent outreach that the regulations are enabling. Numerous questions arise from this: Can agents effectively conduct business in marketplaces where women are active? Should services be provided on a roaming basis to accommodate their schedules? Would engaging in additional business activities tailored to women-merchants’ needs be effective?

These questions, among others, fueled lively discussion during the CGAP workshop. Participants pondered whether broad language in regulations fosters provider flexibility and innovation in serving women, or if it inadvertently perpetuates biases. They also considered thought-provoking questions like, are more prescriptive provisions likely to spur women’s inclusion? Could a requirement that an agent have ‘good moral standing’ invite providers to choose male agents over their female counterparts? Participants found that the answers might vary depending on context, and there is no “one size fits all” approach.  

From discussion to action  

The recent workshop was a solid launching point that aligned the intentions of those assembled and validated that the gender lens analysis of the regulation approach resonated with market facilitators. If regulators are to truly support women like the one featured in the Harare market, they must find ways to ensure financial regulation works for everyone, especially those often overlooked and underserved due to gender norms.