The post : A promising medium for the financial inclusion of women

Written by: Bsrat Measho, UPU intern

On 25 September 2015 more than 150 world leaders adopted the United Nation’s Sustainable Development Goals (SDGs), replacing the Millennium Development Goals (MDGs). They agreed to reach 17 goals by 2030, tackling issues related to poverty reduction. Goal 5 addresses gender inequality. One of its targets is to undertake reforms so that women have equal access to financial services.

Research suggests that female financial inclusion could be a powerful approach to poverty alleviation. For example, several scholars have shown that if women take an active role in managing and earning household finances, their children tend to be better nourished and educated.

Women’s access to finance, however, has been limited in many parts of the world. According to the World Bank’s Global Findex Database (2014), only 24 % of women in low income countries report that they have an account at a financial institution (FI) or on a mobile platform. Although the situation is less dire for middle income countries (54%), many women are still excluded from the financial sector. Particularly low values are reported for Turkmenistan (1.6%) and Yemen (1.7%).

One reason for the low degree of female financial inclusion is that the cultural norms in some countries dictate that women need the authorization of a male family member to open an account. It is also reported that women are more likely than men to state that they do not require an account as a male family member already has one. Furthermore, a large number of women in developing countries work in the informal sector and are not able to present documentation for their income. Financial exclusion is also related to women’s education levels: they may simply not be capable of making use of financial services due to their poor literacy skills. Discriminatory practices from FIs against women are another reason put forward by scholars.

In their paper “Gender and Financial Inclusion through the Post” the UPU and UN Women show that the Post could play a leading role in the financial inclusion of women. Postal operators in 51 countries already provide financial services to 1 billion people worldwide – more than half of them are women. The authors’ findings indicate that the Post seems to be better at serving women than FIs as the share of female clients at post offices that offer account-based financial services is twice as high. This is a world map, illustrating the Post-FI gender gap ratio* :

Post-FI Gender Gap Ratio

Source: Data from Global Findex Survey 2011

As underlying reasons the authors identify the Post’s wider distribution and the fact that it offers cheaper services. They point out that this result seems to be driven by the fact that FIs discriminate more against women rather than postal operators specifically reaching out to women. The paper concludes by stating that more countries should offer basic financial services through their postal operators adapted to the needs of potential female clients. The paper can be downloaded here.

Recently the IMF and the World Bank held a seminar (“Ready for Takeoff: Implementing the Post-2015 Development Agenda”), dealing with the implementation of the Sustainable Development Goals. Claver Gatete, Rwanda’s Minister for Finance and Economic Planning, advocated for the financial inclusion of women at the meeting. He reported that female financial inclusion in Rwanda has been improving constantly and in part ascribed this positive trend to the fact that the government formulated specific targets (e.g. female financial inclusion target of 90% by 2020). According to Gatete, “if you have a law, if you have targets, if you have institutions [that promote financial inclusion for women], the gap can be closed, and Rwanda is there to prove it”. Rwanda’s approach is commendable and has the potential to serve as a model for other countries.

*Calculated as follows: Posts-only gender ratio (female share/male share) divided by FI-only gender ratio (female share/male share)


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