Supply-Side Barriers

Lack of Sex-Disaggregated Data

The collection of sex-disaggregated data on women’s financial needs and financial behaviors are still in nascent stages globally. Without this information, financial service providers (FSPs) may not view women as a viable client segment and have little incentive to develop products and services appropriate for their needs. A lack of sex-disaggregated data can also make it difficult for FSPs to assess the risk of lending to women-owned SMEs. This can limit the availability of credit and other financial services for women-owned SMEs. Without clear information on market demand and potential returns on investment, investors may also be reluctant to invest in women-owned SMEs or digital financial inclusion services for women.

Even if there is a desire to cater to women consumers, without sex-disaggregated data, providers may not be able to identify and target women segments in need of DFS, limiting the effectiveness of their outreach efforts.

Limited Agent Networks

Women often face challenges in accessing DFS agents, particularly in rural areas where agent networks tend to be sparse and women’s ability to move freely may be hampered by restrictive gendered social norms. This lack of access hampers women’s ability to conduct financial transactions and receive support and guidance. In certain cultural contexts, women consumers may prefer to work with an agent of their own gender. Working with a woman agent can help women feel more comfortable and even improve their trust and confidence in financial services. World Bank research in the Democratic Republic of Congo showed that women customers were on average 7.5 percentage points more likely to transact with a women agent than with a male agent (Reitzug et al. 2020). As such, a lack of gender parity in agent networks may hinder women from accessing this delivery channel.

Lack of Gender-Sensitive Products and Services

Men and women often have varying financial needs that necessitate tailored financial products. DFS providers, however, tend to offer generic products and services that are ill-suited to meet the unique needs and preferences of women customers. For instance, DFS products with complex user interfaces may be difficult to navigate for women with low levels of digital literacy, leading to frustration and a lack of engagement with the product. Similarly, credit products with rigid repayment schedules that don’t take into consideration women’s cash-flow patterns are less likely to work for women consumers.

Lack of Competition

Lack of competition among FSPs often leads to higher costs for end users, which can potentially be a deterrent for low-income consumers such as women. When DFS providers operate as dominant players in a market, they may also be able to dictate the terms of their contracts with other players in the ecosystem, such as merchants or mobile network operators. This can lead to higher transaction fees, which are ultimately passed on to consumers in the form of higher prices for goods and services.

The high cost of complying with regulatory requirements and investing in technology infrastructure, which is often necessary to operate in a financial sector at nascent stages of digitization (Feyen et al. 2021), may be being passed on to the customer. Lack of competition can deter providers from innovating and developing tailored products for underserved segments, such as women (GPFI 2020), and can lead to lower-quality customer service and slower response times to consumer complaints, as providers have less incentive to invest in these areas. This can ultimately lead to a lack of trust in the services.

Gender Bias within Product Offerings

Financial institutions often have biased attitudes toward women consumers, which affect the institutions’ appetite to serve this target segment. For example, lenders often perceive women as less likely to repay loans and see their enterprises as less creditworthy than those run by men. As a result, lenders frequently charge women-owned SMEs higher interest rates and offer them smaller loan sizes and shorter repayment periods (CARE 2021; Ray 2023).