A new report by CAF – Development Bank of Latin America – warns that financial institutions tend not to offer products that fit the needs of women. In addition, women tend to show lower financial education levels than men.

Even though there are successful initiatives, most countries in Latin America fall behind in terms of financial education and access to credit when it comes to women. Therefore, they tend to have a smaller saving capacity, less access to loans, and, smaller chances of productive development.

According to the study, gender stereotypes, determined by sociocultural patterns linked to property and division of labor, and the lack of regularly updated information desegregated by gender from financial entities and governments have caused women to have limited access to financing and prevent most of them from using financial products.

To revert this situation, the report basically provides two recommendations. On the one hand, Latin American financial entities should design products that consider the gender perspective, enhance women’s capacities and make their businesses grow. On the other hand, governments and central banks should establish data recollection and analysis mechanisms that enable the design of public policies that seek to reduce financial gaps between men and women.

Actions to be developed include:

• Creating financial products for women and broadening the availability of resources;
• Designing more financial education programs with gender perspective that enhance women’s capacities
• Using indicators that efficiently measure financing needs among women and their companies or startups.

“Women’s economic and financial empowerment is key to achieve a real gender equity. Thus, governments, central banks, and financial entities must adjust their products and services to women’s needs, while also promoting their startups using productivity and profitability criteria”, says Diana Mejía, a financial inclusion expert at CAF and one of the authors of the report.

Mejía believes that, generally, financial entities do not seize the entrepreneurial and financial potential of Latin American women (who represent nearly 50% of the population), and that by providing products and services that better fit their needs, they could improve their economic performance. Only micro financial institutions have turned women into a market niche, but usually under less advantageous conditions.

According to data from the World Bank, in Latin America and the Caribbean, only 49% of women have a banking account, just 11% save money, and only 10% have access to credit. In the case of men, these percentages go up to 54%, 16%, and 13% respectively. A report developed by CAF states that, in Andean countries men have leverage over women in terms of financial knowledge, behaviour, and education.

The report focuses on three action areas where governments and financial entities may offer better services for women: financial products, financial education, and gender indicators.

Financial products

Credit with no need for guarantees or intangible guarantees (jewellery, family as guarantor, furniture, among others); loans at a lower rate (for example, for mothers in charge of their homes who ask for a credit to keep on studying); expanding grace periods; lowering minimum rates when opening a savings account; non-financial services (such as mini MBAs, management and business planning courses)

Financial education

The report points out the importance of setting differentiated strategies for women’s financial education that consider their differences with men. Women tend to have higher levels of risk and losses aversion; they also are less likely to be active savers and properly choose financial products that fit their needs.

Therefore, the demand programs dedicated to address these differences, develop financial products that consider these characteristics, and that may even work as a vehicle to share certain critical knowledge to improve financial decisions among women.

Gender indicators

Including a section on financing (access, use and knowledge) in household or workforce surveys is a good way to develop statistics or data needed to build indicators systems on the demand. The use of household surveys reduces budget pressure as it prevents administrations from developing a whole new survey. In addition, there is a sustainability of information in time, and it would make it easier to analyse the financing variable with other variables such as education, work, kinship, geography, and heads of households.

As regards the supply, financial institutions indicators on the supply of specialized products, the use of affirmative actions, and gender equity corporate policies shall provide data on progresses made by the financial system to promote equal access for women and men to financing.