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November 26, 2021 | Allison Karavos

Ten Organizations Promoting Financial Inclusion for Women

Whatever you celebrate, religious or not, the end of a calendar year encourages reflection, giving thanks (and gifts) to the people you care about, and eating way, way too much food. To help celebrate the season, we’ve been looking at financial services organizations and fintechs that give back in some way, working to support environmental action or helping populations that remain underserved by traditional institutions. One of those populations continues to be women.

Even as recently as the 1960s in North America, unmarried women couldn’t get access to credit or a bank account (and married women needed their husband’s permission). Despite the strides the world has taken in gender equality, there’s still a large divide in terms of financial inclusion – with some reports claiming that the “gender gap remains unaltered since 2011.”1

“In seeking mortgages, women are charged higher rates and denied more often, despite being more likely to repay their loans than men with the same FICO score, loan-to-value, and income. This means that for women, offering the same treatment for the same credit profile as a man is wrong, because the woman will actually default less. The issue is exacerbated by the fact that income is a key factor in mortgage rates, and women earn just $0.84 for every $1.00 earned by men.”2

What impact does this economic divide really have? Research shows that eliminating the gender gap in financial inclusion would have continued positive effects on the economy – increasing its overall size, boosting consumption rates, lowering financial risks and facilitating new business opportunities. In fact, closing the gap can help enable a nation’s overall “development, economic growth, inequality reduction, business evolution and social inclusion.”1

How Can Technology Help Close the Gap?

The rise of fintechs and their use of technology (including innovations like Artificial Intelligence and Machine Learning) can be a catalyst for change – allowing a more even playing field for women and other underserved populations. The use of alternative data as a means of supplementing traditional credit scoring methods can help women who lack credit history. But there’s still lots of work to be done and using this sort of technology requires intentionality and partnership with financial service providers and organizations that help ensure gender equality. We’re highlighting ten innovative organizations that are doing just that – using the power of fintech to ensure financial inclusion and helping improve the economy along the way.

  • Jefa: A challenger bank based in Latin America, this organization focuses on women without a traditional bank account, and aims to help them solve the problems faced when trying to open/manage an account. The all-digital bank targets women in emerging countries who may not have access to traditional banks (even physical access, like transportation to get to a branch), and requires no minimum balance. Future developments include a network of inclusive merchants and a credit building platform.
  • Sequin: While traditional debit cards don’t contribute to credit building, the Sequin card does. Aimed specifically at women, the card helps you build credit with each purchase, without requiring credit checks or late fees. Highlighting the systemic bias sometimes reflected in traditional credit scoring algorithms, the Sequin card helps correct this by not reporting credit utilization to credit bureaus.
  • Kaleidofin: This India-based payment platform offers ‘doorstep service’ aimed at women, helping them build personal financial management plans and offering discretion and privacy to ensure safety for customers. For example, customers can check their balance via ‘missed calls’ and set up a proxy outside their household to receive messages about their accounts.
  • Pezesha: Founded by a woman and marketed at SMEs and individuals in Kenya, Pezesha focuses directly on informal savings groups and designs incentives around them, offering a credit-score-as-a-service product and financial education. Since its founding, more than 50% of women in the region have been included in their financial ecosystem.
  • MamaPrime: Another innovative fintech out of Kenya, MamaPrime offers Kenyan women the opportunity to pre-pay in installments for pre-natal care and childbirth services at the hospital of their choice, allowing them to more easily access high-quality maternity care, and providing targeted financial planning. With seven local partner hospitals and over 1450 mothers who have used the platform, they’ve even won the Healthcare Financing Innovation Award from the Quality Healthcare Kenyan Awards.
  • Ellevest: Founded by Sallie Krawcheck, the former head of Bank of America’s Global Wealth and Investment Management division, U.S.-based investment firm Ellevest markets itself as a tool built by women, for women. The company’s proprietary investment algorithm and tailored advice considers specific women-focused issues, including career breaks for maternity leave or caregiving, longer average lifespans, unpaid female labor and pay gaps.
  • Oraan: To help combat the fact that 41% of women in Pakistan save money through informal groups/committees, Oraan (Pakistan’s first women-led fintech startup) offers financial products that provide women the opportunity to save and borrow money from outside of their immediate social and geographical networks. Using technology, data and a ‘human-centric’ design methodology to digitize financial offerings, the company aims to make saving money both simple and safe for women.
  • Onward: Co-parenting when separated or divorced is difficult enough, but figuring out shared expenses like medical bills, extracurriculars and school supplies can be a nightmare, particularly for women who often rely on support payments. Enter Onward, a mobile app that helps co-parents track and manage shared expenses and offering financial empowerment in difficult situations.
  • HerVest: This Nigerian investment firms aims to bring financial inclusion and empowerment to more African women, helping to bridge the economic gender gap and improving lives with greater access to financial services. With a specific focus in agriculture, HerVest provides female farmers specific growth opportunities relating to crops, grain banking and livestock.
  • Lendingkart: A recent Indian success story, fintech Lendingkart has specific business loans aimed at women-owned MSMEs, which traditionally have difficulty accessing credit. With a program based on analytics and big data technologies, Lendingkart ensures bias is eliminated in the loan application and approval process, allowing women to gain credit based solely on the financial health and potential of their business and not on their gender.

While there is still plenty of work to be done to close the economic gender gap globally, it’s refreshing to see so many innovative fintechs discovering new and unique ways to empower women and encourage financial inclusion. For more inspiration on fintechs/finservs doing good in the world, check out the other two blogs in our Giving Thanks series: Fintechs/Finservs Encouraging Environmental Sustainability and Fintechs/Finservs Aimed at Solving the Unique Needs of Minorities.

And for more information on how an all-in-one risk decisioning ecosystem can make innovating in fintech even easier, check out our AI-Powered Risk Decisioning Platform eBook.

Resources:

  1. https://www.g20-insights.org/policy_briefs/financial-inclusion-for-women-a-way-forward/
  2. https://bbgventures.medium.com/not-another-neobank-why-the-market-is-overcrowded-and-where-bbgv-sees-opportunity-835ebd231154

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