Get financial inclusion on the agenda for one billion women
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International Women's Day on 8 March is a time for the world to reflect on the status of women, how far we have come and how far we still have to go.
Even in Australia, a country that prides itself on being egalitarian, gender inequality still exists. Australian women participate less in the workforce than in most other comparable countries in the OECD, with only 67% of Australian women aged 15 to 64 in paid work compared to 78% of men, and women get paid 17% less than men.
While the remaining gender differences here in Australia are unacceptable, in developing and emerging economies the gap is much wider. Around 70% of the world's poorest people are women and more than 875 million women and girls are illiterate.
A recent report pointed out that around one billion women globally are excluded from the modern economy. Just as the entry of one billion citizens in China and India radically reshaped the global economy, so too would the economic empowerment of these one billion women.
Women are the powerhouse of developing countries, but they are often found in subsistence activities such as growing their own food, caring for family members and walking long distances to access often basic health services.
Social and economic factors exclude them from accessing savings or credit services that could help to turn their lives around. For example, women make up the majority of the 2.7 billion adults in developing countries who still do not have access to banking services.
At the Pittsburgh Summit in September 2009, G20 leaders committed to improving access to financial services for the poor. Now that Australia will host the G20 summit in 2014, it is worth considering how we might use this important opportunity to shape decision-making related to the global economy and financial inclusion, particularly for women.
Australia can do this by clearly drawing the link between women's economic empowerment and higher living standards and stronger economies. Economically empowered women contribute to higher GDP growth, tax revenue, improved health and community participation. For example, if young Nigerian women had the same employment rate as young men, the country would add $13.9 billion to the economy annually. And the benefits aren't just financial; closing the gender gap in access to land, fertilisers and seeds could reduce the number of hungry people in the world by 100-150 million.
Traveling to Malawi with CARE Australia last year and meeting women who for the first time had become financially independent after taking part in a Village Savings and Loan program showed me the human face behind the statistics.
Evidence shows that delivering savings and microfinance programs focused on women is an astute financial and social strategy. Women have proven time and time again that they are credit worthy and can make sound investment choices.
Statistics vary according to different regions, but women who are in charge of their household finances tend to spend more on their children; make their own fertility decisions and have fewer children; send both girls and boys to school and engage in sustainable land use practices. For example, research in Brazil showed that the likelihood of a child's survival was 20 per cent higher when the mother controlled household income; and in Kenya, income in mothers' hands was found to increase children's height by 17 per cent.
There was no better example of this than a conversation I had with 56-year-old Alice from rural Malawi. Before joining the Village Savings and Loans group Alice was very poor. A few years before I met her, she could not grow enough food to feed her five children and two grandchildren and she struggled to get access to money to improve her farm. Now she is the chairperson of her group and is able to feed her family and earn an income from selling surplus food at the market, which has enabled her to send her children to secondary school.
Alice is not alone; she is one of millions of very poor women that CARE has helped take their first step up the economic ladder.
CARE estimates that around 30% of the Savings and Loans groups they support would benefit from linkages to a formal banking institution. These linkages are often prevented by regulations that demand identification, which the very poor don't have and prevent joint bank accounts for the entire group.
As the world celebrates International Women's Day on Friday, financial inclusion should be on the global agenda, as enabling women to access tools for financial success is a critical step to overall empowerment.
Given the choice and given the chance, one billion women will be powerful drivers of economic growth globally and, because they prioritise expenditure on their families, women's economic empowerment translates into benefits for all of society.
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