Also in relation to Q4
We know that one of the most effective women’s economic empowerment initiatives is access to savings. However, globally only 58 per cent of women have an account (Global Findex, 2014). CARE International’s decades of experience working in this area has proven that even the poorest, those living on less than $2, can save and become viable customers. So as first step, banks need to roll out entry-level products for low-income segments starting with low-cost savings accounts.
An effective means for formal finance organisations and telecommunication companies to reach women and other unbanked consumers by using informal savings groups as an entry strategy. Savings groups enable individuals to save and borrow small amounts to smooth consumption and irregular earning patterns. Currently there are at least 11.5 million informal savings groups members made up of 75% women (State of Linkage report), who are each saving approximately $89 per member a year (Banking on Change), and have the potential to bring in $1 billion a year in liquidity for banks. To connect these groups to formal finance requires a concerted effort by governments and the private sector to remove existing barriers to linking with savings groups.
Governments and the private sector should be investing in better digital distribution channels to create accessible means for the rural poor to access formal finance. Digital based services break down traditional barriers to accessing financial services, including overcoming issues associated with the cost and opportunity for rural women to access branches in distant and difficult to reach urban centres. Partnerships between telecommunication and formal financial services are needed to enable women, especially rural women, to access formal banking products remotely, as well as the scaling up of responsible mobile money operators. Governments must invest more in expanding coverage of mobile broadband networks to underserved populations.
Quality financial products and services for women and savings groups must go on the market, including low-fee accounts and competitive interest rates. Currently only 40% of banks offer savings groups a product beyond credit. Lastly, formal finance organisations and governments must have financial inclusion strategies, and which support more enabling registration and criteria requirements for low-income segments. Poorer women lack formal identification, which inhibits them from meeting Know Your Customer requirements for opening accounts. As a solution, governments should invest in fast-tracking a national identification system , enabling one form of identification for all citizens to make KYC processes for clients and banks alike quick, easy and compliant.