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 today, about 40 participants gathered for a debate on how financial services providers can best serve women. Some FSPs create new, dedicated products to meet the needs and preferences of women, while others make modifications to existing products. 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. 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 - will align better with the needs of a subset of male clients.

For FSPs to improve the way 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 already 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 phased-in approach is best, covering both the institutional and operational sides of the organization. The product must solve women’s pain points, the delivery model must resonate, and non-financial services must compliment the product. For example, if women need to register their businesses to qualify for loans, they may need assistance in submitting the required paperwork to the relevant government entity.

Much of the session was dedicated to the participants taking 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 “for” dedicated products argued that: adapted products are insufficient; the data from dedicated products will be more clear; and that dedicated products show clients and other stakeholders that the institution is serious about meeting women’s needs.

As many participants in the debate were assigned to positions they don’t actually 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 panel voted in favor of creating dedicated 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.