“COVID-19 was not all bad” is not a statement you often hear. However, the most recent Global Findex showed an increase in women’s financial inclusion through digital access. But what does digital financial inclusion really look like?
Just because a woman has received one remittance through a mobile money account, does it mean that she is digitally financially included? To really include women in this accelerated race to digitalisation, which was sparked by the pandemic, we need to understand where they are on their digital journey and the barriers they face, including the social norms that support or challenge them. Our experience, through CARE’s Ignite program,1 which we launched just as the pandemic took hold, is that we need to design for those different realities across the globe, to avoid further exclusion. Oftentimes, this means that in-person and online activities need to work together to make progress and ensure inclusivity.
Our focus on women-led micro and small enterprises (MSEs) shows that access to and usage of digital financial services is only one part of their overall journey to digitalisation. While infrastructure and access are challenges, we must also consider digitalisation barriers which are unique to women, including time poverty, restricted mobility, limited access to education, household and childcare responsibilities and much more. Addressing these issues is critical to supporting women-led MSEs on a journey to digitalisation that grows their businesses.
For Mery Salazar,2 who runs an artisan business celebrating her Amazonian heritage in Peru, learning how to use a financial education training app that we adapted with our local financial partner, required support and encouragement not only from our team but also from her more digitally literate children. For Hina Butt,3 who runs a hostel for girls in Pakistan, it was a case of transferring her existing social media skills that she was using in her personal life, to benefit her business, and onboarding her onto mobile money wallets to be able to receive payments from afar. For Nguyen Thi Hien4 in Vietnam, who runs a food business distributing fermented pork, she needed to expand her e-commerce channels to extend her sales globally.
Through our Ignite programme, which operates in Vietnam, Peru and Pakistan, and is supported by the Mastercard Center for Inclusive Growth,5 we are working in three vastly different markets and contexts that have inherently wide-ranging digital infrastructures. As can be seen with Mery, Hina and Hien, they have extremely mixed levels of digital literacy, skills and access, which our programme has had to reflect.
Using existing technology to simplify the journey
In Vietnam, we have worked with our partner, VPBank,6 a large commercial bank, to implement Electronic Know Your Customer (e-KYC) technology to verify customers’ identities. In this context, highly digitally capable women are accessing business loans of up to 20,000 USD (still considered MSEs by the bank). These women wanted to be able to access loans, tools and skills building through digital channels, saving them time as they continue to carry time pressures from household and childcare. Designing women-focused loans with a one-time e-KYC upload has given them a convenient way to regularly access products and services.
In Peru, we identified that many women entrepreneurs did not have the identity documents required to open a bank account and take out a loan, we therefore worked with our financial partner Financiera Confianza7 to fast-track facial recognition as a solution. Our co-designed loan product, Emprendiendo Mujer8 tailored for women-led micro and small businesses, incorporates this biometric technology. This enables loan officers to easily issue loans and women to apply for them, overcoming a major barrier to access. All elements of this product are digital, from the evaluation through to the financial education training, and the disbursement through to the additional cancer insurance policy – which we incorporated at the request of the women entrepreneurs.
In Pakistan, where there are lower levels of digital capability and financial literacy, especially for women, informal digital channels like Facebook and WhatsApp dominate the scene and are a free way of promoting and selling products and services for MSEs. In an ideal world, MSEs can both promote their products and services and receive payments through the same channels. Despite these integrated functionalities being available, the requirements to use credit cards or have a bank account often present barriers for many women. Our solution to these problems has been to combine WhatsApp for personal use with widely used mobile money wallets. We have formed sector-specific and location-specific WhatsApp groups through which women entrepreneurs can buy an8d sell, even through voice notes for less literate women, while also introducing them to mobile money wallets, which are popular in Pakistan. This approach supports women entrepreneurs to slowly build their digital capabilities in a familiar environment while recognising some of the barriers they face.
Face-to-face support is critical
For our micro-finance institution (MFI) partners in Vietnam and Pakistan, where customers are often more rural, less digitally aware and need smaller loans, we have needed to develop a balance between digital and in-person support services to help gain trust. This hybrid approach involves MFI loan officers orienting new customers to the digital loan systems face to face, followed by ongoing human support to reduce digital fear and support regular behaviours, such as checking the app to manage repayment dates. This mixed approach leads to higher usage and success.
For lower-income micro businesses in Peru, we learnt early on that digital capability – specifically downloading, registering, and using our modules – would be a challenge. So as soon as COVID-19 restrictions were relaxed, we employed a hybrid training model where we ran interactive training sessions outside town halls using tablets to introduce women to apps. These high-touch activities were combined with using WhatsApp to share training videos and tips with our networks of women entrepreneurs.
We know that micro and small businesses demand and need more access to markets to find customers and make sales so that they can stay resilient. In Peru and Vietnam, we have developed virtual marketplaces and networks which create critical connections with other actors in the value chain, such as suppliers or distributors, and even investors. However, the level of digital capabilities needed to participate in virtual marketplaces is high, so a one-time in-person intensive onboarding for these women onto these platforms has been critical. Women who participated in Peru’s Virtual Fair now feel equipped to participate in other digital marketplaces.
In Pakistan however, because women are less digitally literate and disproportionately excluded from digital markets, the best way to show them how to negotiate prices and increase market access was to take them on “in-person exposure visits” rather than connect them with digital markets. These visits are supplemented by in-person onboarding to digital platforms, including mobile money wallets and logistics apps to support with payments and transport. Even with these in-person exposure visits, there were still women who were excluded from markets because they were restricted by the social norm which prevents some women from travelling unaccompanied. This means that we have to work harder to meet these women where they are to increase their access to markets.
Activating support networks
Activating social or family support to help women build digital skills is also essential. We have seen many women, like Mery, supported by their families and social networks to access new digital platforms. As service providers, we do not always need to provide all the human support if we can leverage those people around the women. Through Ignite, we have been working with men to convince them to support women, and developed formal and informal networks of women entrepreneurs that can help women overcome digital fear. Women tell us that having the opportunity to network with other women entrepreneurs in their locality or sector can help reduce fear and boost their confidence as they progress on their digitalisation journey.
What needs to change?
So, when a woman receives one remittance through a mobile money account, we might be able to say she is digitally included but has she really progressed meaningfully on this journey to digitalisation? We would argue that while access to digital tools and services is critical, without a more holistic approach that addresses the multiple other barriers holding women back, she cannot effectively progress towards full digitalisation.
Anyone working with women-led MSEs has their part to play. Here is what we can do:
- Intentionally design for women, using a women-centered design process9
- Acknowledge the barriers that are unique to women, including social norms, and help to address them
- Understand women-led MSEs’ needs and current digital behaviours
- Assess existing technology and digital capabilities needed to grow their businesses
Join us to support women-led MSEs on their journey towards digitalisation by contacting us: [email protected]
To date through Ignite, we have trained over 8,000 micro and small businesses (75% women-owned) in digital skills and tools and provided support networks. 85% of Ignite participants tell us that the program has contributed to their ability to use digital tools and services in their business.
Despite the Ignite program launching in the midst of the pandemic, the program has unlocked 115 million USD in loan capital for micro and small entrepreneurs, the majority women-led, a twenty-two-fold uplift of the original program funding provided by the Mastercard Center for Inclusive Growth. 83% of Ignite participants tell us that the program has contributed to an increase in their business sales, helping to build their financial resilience.
About the Authors
Rathi Mani-Kandt has over 15 years of experience designing products and services for low-income populations and has lived for 10 years in emerging and developing economies. She has expertise in designing inclusive financial products and services and is currently the Director of Women’s Entrepreneurship and Financial Inclusion at CARE USA. Previously, she led teams at a human-centred design firm in Cambodia and a fintech in South Africa.
Emma Langbridge has 25 years of experience in the non-profit sector, leading global award-winning campaigns. She currently leads communications for CARE focused on women’s entrepreneurship and economic justice. Previously, she ran communications and advocacy teams for a variety of youth and health charities. As a volunteer, she has designed and led enterprise programming in Eswatini and mentors asylum seekers and refugees.
1. Ignite Program: Unleashing the Power of Entrepreneurs, Care https://www.care.org/about-us/strategic-partners/corporate-partnerships/leadership-partners/mastercard/ignite-program/
2. How This Woman Entrepreneur in Peru is Keeping her Amazonian Heritage Alive, Care, November 15 2021 https://www.care.org/news-and-stories/culture/how-this-woman-in-peru-is-keeping-her-amazonian-heritage-alive/
3. How Tech Training Transformed This Woman Entrepreneur’s Business in Pakistan, Care, November 8, 2021 https://www.care.org/news-and-stories/culture/pakistan-tech-training-transformed-woman-entrepreneur-business/
4. How This Woman Entrepreneur in Vietnam Took Her Family Business to the Next Level, Care, November 18, 2020 https://www.care.org/news-and-stories/culture/how-this-woman-entrepreneur-in-vietnam-took-her-family-business-to-the-next-level/
5. Mastercard https://www.mastercardcenter.org/
7. Financiera Confianza https://confianza.pe/
8. Emprendiendo Mujer, Financiera Confianza https://confianza.pe/negocios/credito-emprendiendo-mujer
9. Why Putting Women in Charge of Their Own Financial Security Pays Dividends, Care, March 31, 2022 https://www.care.org/news-and-stories/news/why-putting-women-in-charge-of-their-own-financial-security-pays-dividends/