Closing the Gender Gap at IF25 - A Debate on Dedicated Financial Products for Women vs. Adapted Ones

In advance of the official opening of IF25 in Luxembourg, about 40 participants gathered for a debate on how financial services providers can best serve women, exploring strategies for closing the gender gap in access to finance. The workshop was organized by the Global Gender Smart Fund (GGSF) technical assistance facility, which is managed by Innpact with NIRAS acting as its technical assistance provider.

The session opened with a presentation on how to integrate a gender lens into investments, institutions and financial products. The debate portion addressed the question: Should institutions create dedicated financial products for women or adapt existing ones to better meet their needs? Either way, the market opportunity is clear, as the moderators of the session noted: women’s need for credit worldwide is met at a rate about 30 percent lower than men’s, a gap valued at USD 1.7 trillion.

There are a range of benefits to meeting women’s needs better, such as when women make more money, they are more likely to spend it on home improvement, health, nutrition and education. These choices benefit men, children and society as a whole. As an example, at one FSP in Uganda, the improvement of services to women resulted not only in better repayment rates, but also an increase in deposits, which reduced the institution’s cost of funds. Meanwhile, products designed for “the average woman” - if also made available to men - undoubtedly will align better with the needs of a subset of male clients.

For FSPs to improve the ways they serve women, it is not sufficient to institute a non-discrimination policy or roll out a copycat product based on assumptions. The institution should begin with a self-evaluation of its strengths and weaknesses, including a review of the data it has on its existing services to women. The FSP must generate buy-in across all areas of the organization: the Board of Directors, loan officers, communications staff, and the human resources department. A two-pronged approach is best, covering both the institutional and operational sides of the organization. On the client side, the product must solve women’s pain points, the delivery model must resonate, and non-financial services must compliment the product. For example, women may have difficulty offering land as collateral, but they may have access to inventory or equipment that can serve the same purpose.

For the debate, participants were assigned positions for and against (not necessarily according to their actual beliefs) the creation of dedicated products to serve women. The “against” group stated that existing products could be adapted to the needs and preferences of women. This latter group made arguments such as: additional products create a drag on efficiency; men may be less interested in working with an institution if they feel they are not being offered its best products; the work for the institution to adapt a product (such as for training staff) is less than that needed to roll out a new one; and an adapted product can be a bridge to a dedicated product, should it become clear that one is necessary. The group arguing for dedicated products emphasized that adapted offerings are often insufficient to meet women’s specific needs. Effectively serving women requires tailored solutions, just as agricultural clients need different offerings than urban customers do. The group also highlighted that dedicated products generate clearer data while signaling to clients and stakeholders that the institution is genuinely committed to addressing women’s financial needs.

As many participants in the debate were assigned to positions they don’t necessarily agree with, the reporting back to the group involved a fair amount of acting and a good dose of laughter. In the end, an informal jury ultimately cast its vote for the team advocating for the creation of dedicated financial products for women.

This content was presented at IF25, which is hosted by e-MFP which has about 120 members, each of which supports the provision of financial services in lower income countries.