April 11, 2019


On April 11th, the Atlantic Council’s Global Business & Economics Program and South Asia Center partnered with the Grameen Foundation India and the NGO Committee on Financing for Development to host a panel discussion titled Financial Inclusion to Financial Sustainability – Empowering women in South Asia and Across the World as part of the World Bank’s Civil Society Policy Forum Spring 2019.

The event was part of the Atlantic Council’s Inclusive Growth Initiative and addressed the challenges women face in becoming financially independent as well as analyzed the tools that are currently being used to empower them. Mr. Bart Oosterveld, director of the Global Business & Economics Program addressed the significance and urgency of the topic and introduced Ms. Anita Thomas, Chair of the NGO Committee on Financing for Development. Ms. Anita Thomas proceeded to moderate the discussion with Mr. Prabhat Labh, CEO of Grameen Foundation India, Dr. Michelle Thompson, Data Fellow at the Mastercard Center for Inclusive Growth, Dr. Purva Khera, Economist at the Monetary and Capital Markets Department of the International Monetary Fund, and Dr. Leora Klapper, Lead Economist of Finance and Private Sector Development at the World Bank Group.

If you missed the event or want to re-watch the discussion, please find the link here.

Financial Inclusion is rising globally due to an increased access to mobile phones and internet. “But gains have been uneven across countries and men are more likely than women to have an account.” said Ms. Anita Thomas. A country that has been a trailblazer in the financial inclusion space is India. The country has been a pioneer in financial inclusion strategies that go all the way to the grassroots, making sure that the most marginalized people are being included in the financial system.

Mr. Prabhat Labh introduced the training program he led at the Grameen Foundation India that provides women with the knowledge of how to use bank accounts. While four mega trends in the financial sector (formalization, commercialization, individualization and digitalization) have fueled a rapid increase in bank account ownership, the increase in account ownership has not led to a behavioral change to save money, even less so from a financial institution. The underlying reason can be traced back to the three pillars of financial inclusion, policy and regulation, demand, and supply. For the past 10 to 15 years, there has been a lot of development and improvement in India with regards to policy and regulation. However, there has been a lack of progress on the demand pillar.  Demand side challenges include inadequate investment in client capacity building, lack of trust in institutions and new digital channels, and the limited availability of smart phones outside the upper middle-class. In response to these challenges, the Grameen Foundation has founded the “Grameen Mitra social enterprise approach”. A Grameen Mitra is a local woman that is recruited, trained and enabled by Grameen to provide customer education and door-step services. They work on customer education, customer acquisition and onboarding, customer service, cross-sell and up-sell. Grameen foundation partners with firms to bring these services to the community. They are not limited to financial services, but they focus on economic inclusion which includes livelihood enablement, agri services, digital payments, etc.

To learn more about what the Grameen Foundation India does, you can watch this video on “scaling digital financial services and financial education”.

Following Mr. Labh’s presentation, Dr. Michelle Thompson emphasized the importance of access to data at the local level. Dr. Thompson argued that getting information and data is essential to show how local community development can happen. And to do so requires joint efforts from the community, non-profit organizations, citizen scientists, the government, universities, the private sector and philanthropy.

Dr. Purva Khera’s research focused on the question if increasing women’s access to finance really helps closing the gender gap in India. In order to answer this question, she looked at the impact of increasing female entrepreneurs’ access to formal finance, reviewing macroeconomic aspects, as well as women’s economic participation. The key challenge in India is the adoption and usage of financial services. At the same time, gender gaps in entrepreneurship remain high and access to formal sources of finance low. Access to finance is a big constraint for women entrepreneurs and female small-business owners. Female Labor force participation (LFP) is lower than its peers at only 1/3 of the male LFP, and it is declining over time. Dr. Khera’s model for financial inclusion integrates the labor market, the banks, and enterprises and builds a comprehensive macroeconomic model that studies the interlinkages across various sectors, disaggregated between male and female, formal and informal sector. She adopted a general equilibrium model to analyze different policy scenarios including increasing access to loans for women, less stringent regulations in the formal market, less gender gap in schooling, etc.

Dr. Leora Klapper joined the discussion and provided a detailed analysis of persistent gender gap in account ownership based of statistics in the Global Findex Database. She specifically highlighted the trend observed in South Asia, arguing that gender gap is increasing in many markets; and that even though there is inclusive growth in some regions, women are 11 % less likely to have active accounts than men. Over the world count ownership for women increased from 58% to 65%. Around 1.2 billion adults have opened bank accounts since 2011, including 600 million women since 2011 and 240 million women since 2014. Nearly 290 million new accounts were opened in India, including 171 million women. However, over half accounts in India did not have a single movement, deposit or withdraw.

Dr. Klapper proposes that a focus on access and technology is needed. For example, an advancement in fintech can deliver more cost-effective financial services and hence help expanding access to financial services. In addition, electronic wage payment can broaden financial inclusion and narrow the gender gap.