The financial reforms of the 1980s and 1990s which took place on the most economy around the globe is supposed to increase the financial depth and usage of formal financial services such as saving, credit, payment, insurance and other financial related services. Decades after those reforms, the results are still not satisfactory, the access and use of financial services of the deprived sector is significantly low. So, the great challenge in front of the government and other concerned regulatory authorities is to address those constraints that exclude people from full participation in the financial services. Furthermore, as evidence from G20 Pittsburgh summit in 2009 and Alliance for Financial Inclusion’s Maya declaration in 2011, lack of access to formal financial services to a larger percentage of the working-age adult is a global concern. First, let’s try to understand financial inclusion in a generous way.
The World Bank broadly
defines financial inclusion as means that individuals and business have access
to useful and affordable financial products and services that meet their needs,
transaction, payment, savings, credit and insurance delivered in a responsible
and sustainable way. In the words of Centre for Financial Inclusion; all people
who can use them have access to the full suite of quality financial services,
provided at an affordable price, in a convenient manner and with dignity for
the client as a state of full financial inclusion. In a different context, the
definition made by the Reserve Bank of India, the central bank of India states
Financial inclusion is the process of ensuring access to appropriate financial
products and service needed by vulnerable groups such as weaker sections and
low-income groups at an affordable cost in a fair and transparent manner by
mainstream institutional players. The definition tries to address the real
situation of developing countries. Furthermore, the national financial
inclusion strategy (NFIS) 2017-2022 of Uganda states that financial inclusion
as access to and usage of quality, affordable and adequate financial service
that helps to ensure financial security. It involves the delivery of financial
services at an affordable cost to all segments of society. These definitions
from various institutions, agencies, and regulatory body show that the
necessity of connecting the various deprived sectors of society with financial
services to enhance financial inclusion. It is a key to improve the livelihood
of the poor and disadvantaged people of society. Increasing access to financial
services, such as payment, saving, insurance, and credit help them to manage
their financial obligations and built a better future for their families while
also supporting broad economic growth, development and poverty reduction.
The gender gap between
male and female is significantly high in most of the sector, whether it is in
law-making or only in the context of general employment. The data speaks a lot
regarding this. On one of the world’s largest democratic country, India, there
is only 14.6 percent female representation in the parliament, elected from the
recent general election of 2019. Such number was only about 8 percent 25 years
back. Female MP in Japan and the US is only 10.2 percent and 23.5 percent
respectively. According to data published by the World Economic Forum, only
three countries, namely; Rwanda, Cuba, and Bolivia have more than fifty percent
female MP in parliament. The figure indicates the rulemaking process is heavily
dominated by the male. Another fact shows that in Australia men spend less than
three hours in unpaid work whereas females spend more than five hours in unpaid
work daily. In US, females spend almost one and a half-hour more in unpaid job
daily. The fact indicates females spend more time on such a job which doesn’t
pay anything.
In Nepal, among the
total dematerialised beneficiary account, which is an essential element for
investment in securities is, only 38.7 percent is owned by the female. Only 24
percent such account is owned by the female in India. The dematerialised
beneficiary account is an essential component in stock investment, the figure
indicates fewer females are participating in investment through the stock
exchange. In UK only one percent female of the total population owns a business
with employees whereas four percent of male own such business. Similarly, in
Australia, three percent female and seven percent male own such a business. The
situation indicates that more male own business with employees than female.
According to World Bank Global Findex, 2017 only 65 percent women have formal
bank account globally, whereas 72 percent of men have such account. Also, women
receive approximately only 40 percent of outstanding loan from the financial
institution.
According to UN Women
in the majority of countries, women’s wages represent between 70 to 90 percent
of men’s wages, which is even lower in Asian and Latin American countries, even
though one among four ILO conventions of gender equality is about equal
remuneration convention. In another data published by UN Women, it says that
the global unemployment rate for the female is 6.2 compared to 5.5 of the male,
which is projected to remain relatively constant until 2021. Furthermore,
almost one-third of women’s employment globally is in agriculture, including
forestry and fishing. Despite these gender inequalities and gender wage gap
globally, the women migrant are responsible to send half of the remittance,
which was about 300 billion US dollar in 2016, indicating that women gives
higher input to generate higher value of cash.
The above mentioned
fact and figure illustrate the gender inequality in developed and emerging
countries around the globe. The inequality in terms of economic decision making
may actually be insane. It is because of the actual participation in financial
decision making or decision ownership by a female maybe even lower than the
fact. So the relevancy of gender inequality in terms of financial
opportunity/decision-making is increasing globally. Economic empowerment comes
with this decision-making ability. Furthermore, decision-making ability is
strengthened with proper knowledge in the relevant field. Regarding financial
decision-making, a person should be financially literate or educated to
understand the financial/economic problem, analyse the situations, compare the
available alternatives, properly evaluate the alternatives and rank them with
priority, select the appropriate alternative, and implement the decision.
Furthermore, they should also be able to review their decision.
Once the
director-general of the United Nations Industrial Development Organisation
(UNIDO) Li Yong said in his speech that there exists a multiplier effect on
productivity while educating and investing in women and girls education. The
women in the society are believed to be the key agent of the changes; this
change helps to grow economies faster, reduces poverty and facilitates
sustainable growth. Increased educational attainment accounts for about 50
percent of the economic growth in OECD countries over the past 50 years.
However, the significant gain in education has not been able to transform into
a better labour market for the majority of women. Nobel laureate Amartya Sen in
his book ‘The country of first boys’ argues that there is extensive evidence
that schooling of young women can substantially enhance the voice and power of
women in the family decision. In the developing countries and sometimes also in
developed countries, it can be observed that if the women have better
education, they will have fewer, healthier and better-educated children, which
reduces the financial dependency and increases saving. This kind of financial
gender inequality can be addressed by the effective financial inclusion
program, specially targeted to the women, by the government and concerned
financial regulators.
The OECD-DAC Network on
Gender Equality defined women’s economic empowerment as women’s ability to take
part in, contribute to, and equal advantages from the process of inclusive
growth through which their dignity, respect and equal opportunities are
protected. To empower women economically the financial inclusion can be
enhanced in various ways. Initially, through incorporated into formal budgetary
framework women will have extra resources for them which will increase
bartering intensity of them inside their family units and furthermore will have
greater capacity to deal with their every day money-related issues. Besides,
outside of the family unit, when women are incorporated into money related
consideration programs, they will turn out to be increasingly ready to control
their benefits. Thirdly, financial inclusion could, by means of insurance,
assist them to diversify risk and thus reduce women’s defenselessness. These
are on the whole key elements for financial strengthening and they can likewise
engage women all the more extensively. The specific interventions identified
below reflect the cross-cutting nature and impact of enabling women’s economic
empowerment:
●
The first one is Financial literacy,
which remains the key to beneficial and continuous linkage with the formal
financial system. It must be promoted for financial inclusion of the women to
be sustainable, with saving, credit, investing and insuring themselves and
their families against financial shocks.
●
Second, increase women’s ownership on
the formal bank account and dematerialized account (an account which is
essential for the transaction of securities in countries like Nepal, India,
Bangladesh, Sri Lanka etc.). Focus on increasing usage of such account, after
opening them.
●
Third, promote digital financial service
and increase women’s ownership of mobile phones with mobile-banking services
that can especially enhance payment through mobile-phone. The deeper
concentration of mobile technology, mobile-banking has great prospects of
increasing accessibility of financial services to women, particularly in remote
areas.
●
Fourth, Formulation and implementation
of national financial inclusion strategy (NFIS). An NFIS could be an effective
means to prioritize goals, balance the development of different financial
services required to attain financial inclusion and way forward for enhancing
the economic empowerment of women.
●
Fifth, Promote the specific role of the
micro-finance institution. The micro-finance institution can play a paramount
role in the economic empowerment of women since these institutions are
specifically designed and work generally in the limited geographical area, they
can have a higher understanding of the need of women residing in those areas.
●
Sixth, Facilitate the policy that
supports investment in SMEs which promote women empowerment.
●
Seventh, Specifically design the
insurance products, that can address the generous need of women so that they
can be protected against the potential risk.
●
Eighth, Cultivate women leadership in
the market participant, such as ensuring female representation on the Board
member of the listed company.
●
Ninth, Promote women’s control over
assets, resources, income and decision making to mitigate the adverse norms and
practices.
The economic empowerment of women is viewed as one of the important contributing factors in economics which focuses on reducing gender inequalities. Economic empowerment of women embellishes to increase women’s ownership through control of land and assets, and creating good quality and empowering job. It also stimulates to minimise the gender pay gap by making the workplace safe and free from any kind of violence including sexual harassment. Reducing the time spent on a non-paying job to allow more time for education and employment; hence, promoting women entrepreneurship, recognising their economic contribution are other challenges. According to the IMF Blog, the shreds of evidence suggests that increasing women’s access to and use of financial services can have both economic and societal benefit. One among various example is Nepal, where female-headed household spends more on education after opening a saving account.
Finally, like to add the words of Purna Sen, Policy director of UN Women, who once said that ‘the word empowerment, it’s sometimes used as if it’s something we do to help somebody else, but that’s not what it means. It means the opposite.’ In a concluding note, the women’s empowerment is not only about the achievement of sustainable development goal and Millenium development goal but is mostly for the construction of the equitable society. It is also for the respect of women’s dignity, recognise the value of their contribution, make possible to negotiate a fairer distribution of the benefit of the growth and to contribute to the development process.
Ajaya Dhungana
Published in Sebon 28th Anniversary Publication (Page 261-264)
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