Why does gender inequity seem to be a more intractable financial inclusion challenge in Bangladesh compared with inequities related to income or education level? To answer that question, it helps to look closer at the dynamics driving financial inclusion in Bangladesh.
Mobile Money is Enabling Increased Equity in Financial Inclusion
Mobile money in Bangladesh has helped bring disadvantaged and vulnerable groups into the formal financial system. Twenty-nine percent of adults had a mobile money account in 2021, up from 3 percent in 2014, when the Global Findex first began collecting data on mobile money accounts. About half of all mobile money users, or 15 percent of adults, use mobile money as their only form of financial account.
Women have benefited from the rise in mobile money account ownership. Twenty percent of women owned mobile money accounts in 2021, up from 2 percent in 2011. The total increase in the share of women with an account of any kind since 2011 is also around 20 percentage points.
As women’s financial access has increased, so too has their use of different financial services—especially digital payments. Among women mobile money users, 82 percent used their account to make payments, including bill, merchant, or utility payments. About a third of women payment users also used their accounts to send remittances. In contrast, savings and borrowing via mobile money among women were low (4 percent and 7 percent, respectively), and 11 percent of women with a mobile money account used it to store money.
Cultural and Confidence Challenges are Restricting Mobile Money Benefits for Women
The appeal of mobile money lies in the fact that it provides an efficient, affordable, and safer alternative to traditional banking institutions. For instance, by eliminating the need to travel, mobile money accounts reduce social and administrative constraints so that women can safely receive money and transact while at home.
Yet field interviews conducted by the Global Findex team in Bangladesh also highlighted some challenges that keep women with mobile money accounts from benefiting as much from them as they could. For example, a women garment factory worker we spoke to told us that she sends her ATM card to her father living elsewhere in the country. She thereby lose autonomy over her salary.
There are multiple reasons why women may willingly relinquish control of their money. One relates to culture. An anthropological study led by BIGD explored woman’s DFS onboarding experiences in Bangladesh. As described at the BIGD conference, smartphones are sometimes considered taboo for women and girls, and women’s access to mobile banking agents—who are mostly men—might be constrained by women’s hesitation to give their phone number, necessary to access a mobile money account, to a male agent. Taking a photo to set up an account may also be problematic for women if they are required to remove their head coverings.
Even if a woman has successfully opened a mobile banking account, additional barriers may prevent her from enjoying its benefits. A WEE-DiFine-supported pilot study found that low levels of DFS awareness and cash flow constraints limited female domestic workers’ use of mobile banking. Few women in the study were aware of the link between economic independence and account ownership. Most women associated empowerment simply with higher wages, and not with personal agency or financial decision making. These perceptions may limit women’s motivation to deepen their use of mobile banking.
Beyond culture, there are other reasons why women may hand over control of their money to a male family member. A study conducted in Bangladesh during the early months of the pandemic found that 50 percent of digital financial service users relied on agents to complete transactions. The Global Findex reinforces that finding with data showing that nearly two-thirds of women with mobile money accounts need help using them. The takeaway is that while agents serve a key role in financial inclusion efforts, consumers who fully rely on them may be exposed to financial abuse and paying unsanctioned fees.
Barriers to Account Ownership may Further Limit Progress in Financial Access
The challenges noted above affect women who already have accounts. Additional barriers keep women without accounts (the ‘unbanked’) from embracing account ownership in the first place. The Global Findex survey asks unbanked adults about the financial inclusion barriers they face. The cost of opening and operating a financial account was named as a barrier by 42 percent of unbanked adults. Importantly, an additional 9 percent of adults said they “don’t know” when asked if cost was a barrier, suggesting these respondents do not know enough about digital financial services to have an opinion. In addition, over 60 percent of unbanked adults in Bangladesh say they would not be able to use a financial account (excluding mobile money) without help. Women were 12 percentage points more likely to say that than men.
These findings align with the baseline estimates from a WEE-DiFine-supported randomized controlled trial. They show that between 45 percent and 53 percent of respondents, depending on question framing [1], indicated that mobile banking is too expensive. Additionally, between 29 percent and 50 percent believe mobile banking is hard to use. Finally, one third of women respondents indicated that mobile banking is not for someone “like them.” Together, these findings point to a lack of financial confidence as a barrier not only for banked women but also for the unbanked—one which may prevent them from proactively pursuing financial inclusion.
Governments and Financial Institutions Have a Role to Play in Building Women’s Financial Capability
A strong government-led consumer protection framework is critical for building trust and furthering the cause of financial inclusion. Governments can also help motivate greater financial autonomy for women by investing in digital public infrastructure (DPI), including biometric identification and digital financial accounts. Such infrastructure—key to broader digitalization across the Bangladeshi economy—would require women to own their own accounts and directly transact with them, a practice that has been shown to help people with less financial experience develop the capabilities they need to increase financial autonomy. Specifically, research has shown the benefits of using methods such “learning-by-doing” to build financial confidence. A study conducted with previously unbanked factory workers in Bangladesh included paying their wages into an account, and found that exposure to these new accounts enabled the workers to learn how to use them without assistance. Over time they used a wider range of features and learned to avoid illicit fees. Traditional classroom-based financial education, in contrast, has shown mixed results for improving financial capability.
Another approach to overcoming the barriers women face to financial inclusion is to digitalize more of the digital payment landscape across the country. In 2021, for example, only one-in-five private sector wage earners receive them into an account. In conjunction with gender-informed and culturally informed policies and practices (such as hiring more women as agents and working to remove stigma associated with mobile phone use by women), increased digitalization can help drive increased financial inclusion.
Digital financial services hold tremendous potential. To realize it, policymakers must promote the use of digital financial services and service providers must adopt a more customer-centric approach, including gender-inclusive financial services.
