Loan Rejection Rate for Women-run Business 2 Times Higher than Men. Formal Finance Bias Needs Fixing

In light of the challenges and opportunities presented by the prevalence of Digital Financial Services (DFS), the Digitizing Women’s Money Management (DWMM) project is aimed at contributing to the improvement of the landscape of financial services for women in Low-Income Households (LIHs).

Policymakers should go beyond economics to look at sociological and anthropological aspects of how women negotiate finance.

In the following sections of this blog, we discuss the unique and complex financial lives of these households to set the context for product and process designs, delve into what a savings product for not just women but Low-Income Households (LIHs) in general could look like, and highlight some of the insights from various kinds of financial service providers on the challenges and opportunities in operationalising such a savings product for this segment. 

Advancing women’s financial inclusion is a key policy objective for both advanced and emerging economies. Providing access to formal finance is seen as an important lever in helping poor women seize economic opportunities and build a resilient future for themselves and their families.

Even when women are not the primary borrowers of formal finance, studies note that they remain responsible for ensuring timely repayments.

Digital formal finance can potentially reduce the physical and social distance between women and financial services.