Women’s Financial Inclusion Workshop
Nile Ballroom, Conrad Hotel
Monday, 10th December 2018 - 10:00 AM - 4:00PM
Ms. Randa Aboul-Hosn, UNDP Resident Representative (a.i.) Remarks
Ms. Lobna Helal, CBE Deputy Governor,
Dr. Ola El Khawaga EBI Research & Awareness Director,
Mr. Abdel Aziz Nossier, EBI Executive Director,
Ladies and Gentlemen,
I am very pleased to join you today to discuss how we can enhance and increase women’s financial inclusion in Egypt, expand their access to financial services, enhance the policy framework and help in finding ways to bridge the gender-digital-divide vis-à-vis availing fintech services.
First, let me start with some disconcerting facts:
- Today marks the culmination of 16 Days of Activism Against GBV as well the international Human Rights Day and the anniversary of the Universal Declaration of Human Rights, hence it is important to point out that Violence against women (VAW) is a significant economic issue which carries high costs to individuals, households, the public sector, businesses and society.
- VAW is also a violation of human rights – women’s rights are human rights. Women have a right to live a life free from violence, beyond any economic justification for it.
- There is a direct relationship between women’s access to income and an increase in violence and control – which hinders women’s economic empowerment and significantly impedes women’s ability to fulfil their potential – including education and employment opportunities, income earning capability and advancement in the workplace.
- The total cost of the violence that women and their families in Egypt were subjected to in 2015 alone, is estimated to be at least EGP 2.17 billion and could be as high as EGP 6.15 billion if all violent incidents women experience during one year are calculated.
- However, earning an income or owning an asset can also reduce economic stress for women, increase their bargaining power in the household and give them the means to prevent or escape abusive relationships.
- In many societies, men continue to claim ownership of and control over productive resources and assets such as property, inheritance and land as well as financial resources. Thus, women frequently do not have the collateral necessary to seek out loans from the formal financial sector business.
- Gender inequalities in employment and earnings mean that women have lower incomes, leading to income insecurity over the lifecycle.
- Also, in many countries girls and women outpace their male peers at nearly all educational levels, they continue to face discrimination in the labor market, including in the financial sector, and lower rates of upward mobility than men and a persisting pay gap.
- These factors combined with discrimination against women in financial markets mean that women are far less likely than men to have checking or savings accounts in their own names.
- In Egypt, the World Bank 2014 Findex data showed that only 14.1% of adults have a bank account of which only 9.3% of women are banked, while credit card women users amounted for 0.4%, debit cards women users amounted for 5.6%, and savings by women in financial users constituted 3.9%.
- In Egypt, according to the Global Findex Database, formal account ownership among women has more than tripled between 2011 and 2017 (from 7% to 27%). Yet, the rate is still lower than that of men (39% in 2017).
Thus, the need for having a proper insightful discussion on women’s financial inclusion is rather timely. Financial inclusion is instrumental to attaining the 2030 Agenda, and most importantly for leaving no one behind. Financial inclusion can give people economic security and also positively impact their health, education, and livelihoods. The SDGs identify this and marks financial inclusion as a crucial component in 7 of its Goals.
Progress in digital and mobile technologies have contributed to the growth of financial inclusion. Throughout the past 10 years, nearly 2 billion people have gained access to finance. Mobile banking and biometric identification, among other advanced technologies, currently allow people to better handle their finances, save up, carry out payments and transactions, and most importantly invest. Excellent examples are evident in the work of M-Pesa in Kenya, offering mobile banking services to 30 million people and the Aadhaar identification system in India, enabling women to have and manage bank accounts.
Yet, more needs to be done. According to McKinsey Global Institute, advancing gender equality could unlock $12 trillion of incremental GDP in 2025 with financial and particularly digital inclusion being among the key enablers for making progress on gender equality. The potential of digital financial services to close the financial inclusion gender gap is indeed huge. Nevertheless, in spite of the major victories attained in digitizing simple financial products across the world, women still encounter weighty obstacles to accessing and making use of digital financial services especially when statistics point out that fewer women tend to own a mobile phone.
Nevertheless, in Egypt, we have witnessed plenty of technological progress aimed at digital financial inclusion. In 2017, the ‘National Council for Payments’ was established to reduce the use of banknotes outside the banking system, stimulating the use of electronic payments, and developing the national payments systems. The CBE approved a new version of the regulations for ‘Mobile Payment Services Regulations’ in November 2016 allowing banks’ customers to transfer or receive funds and remittances via their mobile accounts. These regulations constitute an approach towards financial inclusion, especially that mobile banking has significant growth opportunities in Egypt, since the mobile phone penetration in the country recorded 110% in August 2017. The CBE also established the ‘Financial Inclusion Unit’ aiming to support and enhance financial inclusion in Egypt. Additionally, the CBE announced a plan to establish an independent central administration to protect consumers of financial services. It is also commendable that Egypt was chosen as a model country in a new ‘Financial Inclusion Global Initiative’ launched by the World Bank Group in 2017, with the aim of supporting access to financial services to the unbanked and underbanked and developing policy recommendations in digital finance. It is really admirable to see Egypt embarking on such a challenging journey of transforming its society into a cashless one through digital financial services (Fintech), including capitalizing on Egypt’s high penetration of smartphones to promote the use of mobile wallets.
Currently, 58% of women have a bank account compared to 65% of men world-wide. In other words, 1.1 billion women are to this day categorized as unbanked. Discrepancies thrive due to structural restrictions faced by women in gaining access to finance ―i.e. lack of property rights, identity documents, unpaid care access to business networks, …etc. Confining gender norms and societal outlooks tend to also hinder women’s access to public space and carrying out simple day-to-day transactions.
Women must be engaged beyond micro-finance and become part of the financial system at-large. Thus, it is key to comprehend and interpret women’s use of financial services so there can be gender-sensitive ones ― i.e. credit, savings, investment, and insurance schemes, and payment services. This is essential to help women expand their businesses and increase their impact on employment, wealth creation and skills development. Also, with the rise of crowdfunding, blockchain, bitcoin, and startups innovative thinking should be considered, in addition to not only investing in financial literacy for women, but also in digital literacy and STEM as a whole.
Endorsing women’s leadership in private and public financial institutions is imperative to raising awareness on women’s effective role in the world of business. It can also culminate in the creation of a stronger generation of women mentors and influential figures. In UNDP, for example, we work globally with our sister agencies, while utilizing our shared and comparative strengths to enable financial inclusion. For instance, we work with UNCDF and UN Women on paving the way for domestic financing for local level women-owned and gender-responsive SMEs.
And we are very happy to see the CBE’s initiative—launched in 2016—towards directing banks to increase finance provided to SMEs with the goal to have SMEs accounting for not less than 20% of banks’ total loan portfolios within the coming years, with competitive interest rate, and with a special emphasis on women. Not to mention other key initiative involving increasing the number of women qualifying for mortgages, as out of 10.6 billion outstanding mortgage loans, only 16 % are held by women in Egypt. Thus, the prospects are really huge. 30% of formal SMEs are owned by women and, of which, 70% lack access to the much-needed capital that can accelerate the expansion of their businesses. It is worth noting that there is a yearly credit deficit amounting to $300 billion. There is so much to gain and —really— nothing to lose.
Gender equality is essential to attaining the global goals. It is an indispensable accelerator for inclusive growth and a catalyst for a secure and thriving world. Financial inclusion is a key component for achieving this. Financial inclusion can no longer only be considered —nor perceived— as a largely gender-neutral policy issue anymore. It is also inherently important to comprehend that digitalization is a must to surmount current obstacles to financial exclusion by allowing financial institutions to reach women without placing further constraints on their limited time and mobility, especially in a developing economy like that of Egypt.
Thank you for having me!