Global Gender-Gap in ownership of Bank Accounts

Even as over 700 hundred million adults became first-time bank account holders over the past three years, nearly 40 percent of the world still has no access and exposure to financial services. And this figure isn’t uniform across the genders- more women remain restrained from opening bank accounts than men.

The World Bank’s latest global financial-inclusion report released Wednesday showed that only 58% women have bank accounts compared to 65% men, and this 7% difference turns to 9% in developing countries.

Individually, both men and women have shown uniform progress compared to statistics from 2011- by registering an 11 % increase each. However, what has also stayed constant is that glaring gap, and it is worth studying why it persists, especially considering the relentless lobbying by governments and NGOs targeted to men and women equally, to switch to the formal way of hoarding one’s life savings.

“It was surprising to us; given all the progress in inclusion, there is still a gender gap,” said Asli Demirguc-Kunt, director of research at the World Bank, to Wall Street Journal.

What’s more- reports and Surveys have brought to light that even though a universal figure of 62 percent has been announced- it is the average of a vast range of figures. The penetration of the banking mentality across all categories of economies is far from uniform- but it is attributed to cultural diversity as much as economic.

These economic and cultural differences explain the reason why people, in general, show different degrees of skepticism towards banking, but economists and researchers still haven’t been able to uncover how the gender gap crept in, and why it hasn’t narrowed.

Based on interviews of 150,000 people in more than 140 countries across the emerging and developed world conducted by the World Bank, the reasons women gave for not owning bank accounts range from misconceptions, to lethargy, to restrictions. Joint accounts are only common in the higher-income countries. In other countries, Ms. Demirguc-Kunt said women often use somebody else’s account instead of opting for a joint bank account.

Other reasons may include denial of permission to women to work and be financially independent by a patriarchal society, or inability on the woman's part in making time for traveling to far-off and scattered bank branches, because of the dual responsibility of managing households and careers.

The gap widens in the middle-east, where a woman in half as like as a man to have a high-use account, and in-turn, a third more likely to have a dormant one.

China, however, paints a more optimistic picture. The gender gap there is closest to being sealed, as almost 76% of the Chinese woman own accounts compared to 81 percent of the men, perhaps owing to the fact that they are active participants in their workforce.

Researchers say that the overall aversion to banking could be overcome by popularizing digital-banking operations, with a special focus on mobile-banking and payment. This would particularly benefit women, as the inconvenience and geographical barriers in banking will done away with altogether- as observed in China, where advancements in technology have facilitated easy banking for the layperson.

Encouraging women to bank is a worthy cause, as financially empowering a woman automatically increases her bargaining power in the family. You also enable her to take charge of her life and break away from exploitative ciscumstances.

Besides, by teaching her how to save in a more organized manner, you are ensuring the overall welfare of a family. Various studies have proven how woman have different consumption and spending patterns compared to men, and they tend to invest in the health and nutrition of their entire family, rather than just themselves.

Source: Wall Street Journal

Featured Image Courtesy: World Bank