WOMEN and FINANCE PROVIDING FINANCIAL ACCESS TO THE UNBANKED & UNDERBANKED RUBIN JAPHTA
1. Women-owned SMEs 2. Digital Financial Services
Financial Inclusion of Women: A Social, Economic and Business Case ▪ Women represent over 50% of the global population and 40% of the labor force. Women-owned small and medium enterprises (WSMEs) represent over 30% of registered ▪ businesses worldwide. ▪ 70% of WSMEs in the formal sector in emerging markets are underserved by financial institutions Closing gender gaps is not only good for development, it is also good business for private enterprise ▪ ▪ IFC’s Banking on Women program works towards closing this gap by helping financial institutions sustainability and profitably target this underserved segment. 3
Women-owned SMEs: An Untapped Business Opportunity Women are driving the global economy US$ 1.5 trillion US$ 1.5 trillion 870 million women 870 million women 30% of registered SMEs 30% of registered SMEs globally 2 globally 2 …is the estimated amount of …is the estimated amount of …will participate in the …will participate in the the finance demanded by the finance demanded by economy for the first time in economy for the first time in …have been created by …have been created by formal women-owned SMEs formal women-owned SMEs 2020 . 2020 . women. women. in emerging markets – and in emerging markets – and The female labor force grows. The female labor force grows. Women entrepreneurs are Women entrepreneurs are not met by financial not met by financial Women who did not participate Women who did not participate changing the landscape of the changing the landscape of the institutions. 1 institutions. 1 in the economy before will get a in the economy before will get a global economy, creating global economy, creating job or start their own businesses job or start their own businesses sustainable jobs and economic sustainable jobs and economic in this decade. in this decade. growth. growth. US$ 1.7 trillion... US$ 1.7 trillion... 85%.. 85%.. US$ 20 trillion... US$ 20 trillion... …. is the estimated global …. is the estimated global …. of households identify …. of households identify …in annual consumer …in annual consumer women’s market for insurance women’s market for insurance women as the main decision women as the main decision spending is controlled by spending is controlled by by 2030. 3 by 2030. 3 makers in the household. makers in the household. women. 4 women. 4 1 / IFC McKinsey Enterprise Finance Gap Database 2 / A woman- owned small and medium size enterprise (WSME) is, according to IFC,: (a) ≥ 51% owned by woman/women; or (b) ≥ 20% owned by a woman/women; and has ≥ 1 woman as CEO/COO (President/Vice - President);and has ≥ 30% of the board of directors comprised of women where a board exists. 3/ She for SHIELD: Insure Women to Better Protect All; IFC, AXA, and Accenture 2015 4 / Harvard Business Review 4
Dispelling Gender Myths Myth Client issue IFC response • Client wants to be seen as doing right thing by • BOW about tapping into a high profit BOW is about CSR society and government segment • BOW viewed as a loss-making enterprise and not • CSR activities not sustainable • Clients “see through” CSR bothered with the outreach & “numbers” • Lack of data to show otherwise provides a client with • Use similar examples with a range of Men/Women portfolio easy mismatching opportunity business metrics e.g. propensity to • Emphasis generally on loan quality performance same deposit, retention rate, cross selling opportunities • We treat everyone the same so there is no problem • Not about discrimination but Do not discriminate so no opportunity with our sales approach understanding different needs & here financial behavior • Purely about small scale product adaptation, not • Success requires a combination of It’s about creating a pink credit card for fundamental new proposition required elements: product may or may not be shopping important • Your examples are mainly based on other countries, • Emphasize examples in similar It might work in other markets, but we don’t have this level of discrimination/ barriers for markets Australia, UK and US • It works in China, Indonesia, not in this market women Philippines, Lebanon, Dominican Rep. • By branding the bank as “gender - friendly” it will • Research shows that male customers It will alienate our male customers alienate the male customers not negatively impacted 5
Business Case for Banks: Why Target the Women’s Market? Mark arket dif differentiation, , expansion of of mark arket sha share, , gr greater pr profitability ar are e som some of of the pillars sup pill supporting the bu business s cas ase. Factor* Description • Provides source of market differentiation in competitive SME markets • Market Share Establishes reputation as an innovator • Entry and differentiation in specific sectors where concentration e.g. retail, mobile, youth Growth • Creates strong community-based advocacy and enhances corporate social responsibility • Once main banker status achieved, higher cross- sell ratio’s (between 1 and 2 times) Higher Cross-Sell • Higher footings obtained per relationship and higher fee generation • and Loyalty Respond well to relationship management-based models • Demonstrate stronger retention rates in many clients • Female customers have a higher propensity to save both as business & personal customers • Deposits from female customers typically grow at higher rate and stay with the Bank longer Strong Savings • Net funding surplus as a segment Propensity • Female customers have lower risk tolerance as both business and personal customers • Women-led businesses outperform those led by men, including start-ups Positive Risk • Stronger business plans can create higher acceptance rates and reduced processing costs Behavior • Default rates are either the same or better than male counterparts depending upon market • Take the business relationship, high likelihood that will take majority of family wallet Linkage to Family • High advocacy creates strong conversion rates for husband business and personal FS Wallet • Up to 85% of family financial decisions made by the women globally 4 * - Source: IFC Analysis
Women’s Growth has Outpaced the Market resulting in Increased Revenue Average revenue per customer in $ in 2015 Source: GBA’s Global Women’s Market Survey, 2017 7
IFC Product Offering Value Proposition IFC has a unique integrated approach, combining investment and advisory services ▪ IFC works with financial institutions to deepen their ability to reach WSMEs through funding and advice covering strategic planning, market positioning/segmentation, product repositioning and staff training. ▪ IFC works with WSMEs to provide customized training in business planning and management, financial literacy, etc., as well as facilitates networking and mentoring to support market expansion and business growth. Investment Services Advisory Services for FIs Advisory Services for WSMEs For Financial Institutions ▪ Strategy & analytics : Gender ▪ Business Planning ▪ Risk sharing facilities diagnostic & Needs assessment, Gender market research etc. ▪ Financial Literacy ▪ Loans ▪ Product Management : product ▪ Creation and Support of support package template, IFC ▪ Blended finance Networks Gender Product Program For Investors ▪ Mentoring Opportunities ▪ Training: Gender awareness ▪ BOW Bonds training for Management, IFC ▪ Market Access Gender skills training course for RMs etc. ▪ SME business Toolkit for women ▪ Branding & Market positioning ▪ Events & seminars /segmentation ▪ Online resources & networking 5
IFC’s Track Record in Banking on Women IFC has a strong global track record of providing investment and advisory services to banks to build profitable business lines in the Women’s Customer segment As at end-June 2017: B ANK I NVESTMENTS IN • Total Committed Portfolio: Over US$1.7 billion (IFC and mobilized lenders) IFC B ANKING ON W OMEN P ROGRAM • Total Number of Bank Investments : 53 • Total Number of Advisory Services Projects: 39 Advisory Projects • Bank of Palestine • Access AMSME* • Banco BHD • Banco Itau* • Bank al Etihad • Bank of Luoyang* TransCapital Bank (Russian Federation) • Bank Muscat (Georgia) • BCI Fomento (Kyrgyz Republic) Mozambique (Romania) (Turkey) CDH (China) • BII Indonesia (Turkey) • BFL Laos* (Turkey) • BLC Bank Yes Bank (India) BFL (Laos) • BTPN* Access Bank (Nigeria) Improsa (Costa Rica) • Chase Bank Kenya* (Vietnam) • Rawbank (DRC) DFCU Uganda* • Diamond Trust Burundi Chase Bank (Kenya) BTPN (Indonesia) Banco Pichincha (Ecuador) • Eastern Bank SIB (Cote d’Ivoire) Banco Industrial (Brazil) • IDLC Banco Internacional (Ecuador) (Uganda) DTB (Kenya) • Habib Bank (Brazil) • NBS Malawi Banco Internacional (Chile) (Kenya) • Rawbank DRC* (Tanzania) • RCBC (Chile) • Sanasa Dev. Bank 9 * Also IFC investment clients in Banking on Women program
Digital Financial Services – Key to Financial Inclusion of Women
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