FE Today Logo

Women's financial inclusion

MFS, e-commerce accelerate, pandemic does the opposite

Doulot Akter Mala | March 08, 2022 00:00:00

A woman is working at a bank in Dhaka — FE Photo

A paradox it may sound, that the Covid-19 may not have 'infected' women more than men but it has surely 'affected' them more. Is, then, the prolonged pandemic gender- biased? There is no study to answer this question, but several evidences in Bangladesh and its neighbouring countries underpin this moot question. However, there's a silver lining in every cloud.

The divide was more poignant in a suddent setback in the womenfolk's advances on financial front, in particular. To specify the harms done, this all-upsetting virus has led to early marriage, burden of unpaid care and domestic work, and violence against women.

According to Bangladesh Mohila Parishad study, 54 per cent of working women lost their jobs, including 16 per cent having been terminated and 20 per cent furloghed due to disruptions done by the coronavirus pandemic.

It also reveals that 52 per cent of women were in financial crisis and 67 per cent said that domestic violence increased during the pandepidemic.

The government came up with liquidity and fiscal support to minimize the impact of pandemic. However, most women hardly had access to such 'stimulus' packages, either for a lack of financial literacy or awareness.

In a virtual dialogue arranged by the Centre for Policy Dialogue (CPD), titled 'Socioeconomic Recovery Measures of the Government: How Much Women Have Benefitted', Shoko Ishikawa, Country Representative, UN Women Bangladesh Country Office, drew a grim picture of the regression. She said that, globally, 47 million women and girls are forced into poverty because of the pandemic.

The UN representative of women said all packages need to ensure ''adequate and transparent delivery'' for women.

In Bangladesh, around 85 per cent of the women work in informal sectors. Are they in the database of government's financial inclusion? There is no study whether or which way financial inclusion of women got affected in the last two years of viral disruptions.

Razzabun Neasa Nila, 35, had taken a step towards her dream in December 2019 starting a boutique business shop in Dhaka's Banosri area. Main targeted customers were guardians of the school-going children and university students. Her business had started gaining momentum. She was planning to expand the space of her rented shop to arrange more accommodation. After Covid-19 pandemic had gripped the country since March 2020, all educational institutions closed with the country placed under lockdown. Eventually, her fledging business faced closure. Now Nila joined a school in Uttara, leaving her dream to become an entrepreneur shattered.

Story of Nila is emblematic to many women who were involved with small and medium enterprises (SME) business before pandemic hit the country. SME contributes 5.0 per cent to country's Gross Domestic Product (GDP)

However, some success stories of e-commerce businesses, growth of agent-banking services in rural areas and a sharp increase in women's mobile financial service (MFS) accounts show evidences of their access to finance, after all this, thanks to undeterred forays of fintech.

Rahela Begum, an above-45 widow who lives in Matlab upazila under Chandpur district, has learned to use smart phone in middle of 2020. After this deadly pathogen snatched her husband, the only earner of the four-member family, she started a small-scale online business with the help of one of her friends. Once a shy private housewife, she gradually transformed herself into a popular e-commerce businessperson of traditional women's fabrics and dresses. Now, she earns Tk 30,000 a month, with a network linking country's North Bengal area's handicraft makers to supply products.

What she used for the business as capital in the beginning is only a mobile phone with internet access. As a first step of her business, she opened a Mobile Financial Services Accounts (MFS).

Like Rahela, many women got involved in income-generating activities and became self-employed during the last two years of pandemic. Boost of e-commerce business and MFS inspired them to move ahead.

Thus financial inclusion of women in Bangladesh started taking an impressive shape despite all odds.

Tumpa Sultana, a fresh graduate who lives in the capital, started her job in a travel agency at the beginning of 2020. After few months, the agency was compelled to cut jobs to minimize its operating expenditures as the virus hit the worldwide tourism industry. Eventually, she lost her job.

A techno-shy Tumpa then felt the necessity of better training in digital technology to become financially literate and start up a business. She opened an event-management company recently as her educational background supports the business too. She needs to maintain a network of catering, decorator and other services relevant to event management.

She found it difficult to be compliant sometimes for lack of faster internet access. Also, data- privacy security and coping with cyber-threat made her concerned.

Financial inclusion depends on faster adoption of digital financial services. Policy support, women- friendly financial products and awareness are an imperative for this.

Two major steps of the Bangladesh Bank--Mobile Financial Services, introduced in 2011, and Agent Banking in 2013--changed the scenario of financial services in Bangladesh. It has gained momentum during the COVID pandemic with the boost of e-commerce business in the lock-down period.

MFS and agent-bank accounts of women increased significantly. Due to expansion of agent banking, the number of female accounts jumped to 4.0 million in 2020 that was 220,000 in 2019, according to the Bangladesh Financial Inclusion Forum.

The number of MFS accounts of women also rose to 47.6 million, which was 39.2 million in 2019.

However, having bank account is the first step but it doesn't show the actual state of economic inclusion of women. Types of women accounts should be made transparent to show the real data of financial inclusion of women. Many women in rural areas opened bank accounts to receive stimulus packages, remittances. Many men open bank account in the name of their female relatives, wives, daughters, mothers, sisters for different purposes, sometimes for evading payment of taxes.

Opening bank account to receive stimulus packages or remittances would not ensure the inclusion unless the women entrepreneurs open bank accounts and have regular financial transactions in it.

BB data show that women had more accounts in rural areas than in urban areas. In 2020, in rural areas, the number of accounts held by women was 30.4 million, and in urban areas, the number was 19.4 million.

However, in the last four years, women account growth in urban areas has been higher than in rural areas. From 2018 to 2021, the growth was 129 per cent in urban areas and 32 per cent in rural areas. The number of mobile financial services accounts held by women has increased 58 per cent in the last four years.

According to World Bank (WB) definition financial inclusion means individuals and businesses have access to useful and affordable financial products and services that meet their needs - transactions, payments, savings, credits and insurance - delivered in a responsible and sustainable way.

Women need financial literacy and have to be techno-savvy to access the digital financial services. Financial inclusion is integrated with digital payment system, adoption of technology, use of smartphone, learning to access internet services.

Women in rural areas can take help of the digital service centres, established across the country under a2i programme of the ICT division of the government.

According to a WB study in 2017, women were lagging behind men in economic inclusion at 29 per cent than that of men.

In South Asia as a whole, economic inclusion of women is 64 per cent and men 75 per cent, while globally it is 65 per cent and 72 per cent.

Low asset holdings and income, social and religious attitudes are among the major barriers to women's financial inclusion. The women entrepreneurs face difficulties to get loans due to poor asset ownership.

The government formulated National Financial Inclusion strategy 2021-2024. It has identified 46 targets under 14 goals of Sustainable Development Goals (SDGs) to assess the impact of its implementation.

The strategy also provides a national definition of financial inclusion as 'Access of individuals and businesses to the full range of financial services facilitated with technology provided at affordable cost with quality, ease of access and full scope of risk mitigation in responsible and sustainable manner through a regulated, transparent, efficient and competitive financial marketplace'.

[email protected]

Share if you like