WOMEN and FINANCE PROVIDING FINANCIAL ACCESS TO THE UNBANKED & - - PowerPoint PPT Presentation

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

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▪ 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.

US$ 1.5 trillion

…is the estimated amount of the finance demanded by formal women-owned SMEs in emerging markets – and not met by financial institutions.1

US$ 1.5 trillion

…is the estimated amount of the finance demanded by formal women-owned SMEs in emerging markets – and not met by financial institutions.1

30% of registered SMEs globally2

…have been created by women.

Women entrepreneurs are changing the landscape of the global economy, creating sustainable jobs and economic growth.

30% of registered SMEs globally2

…have been created by women.

Women entrepreneurs are changing the landscape of the global economy, creating sustainable jobs and economic growth.

870 million women

…will participate in the economy for the first time in 2020.

The female labor force grows. Women who did not participate in the economy before will get a job or start their own businesses in this decade.

870 million women

…will participate in the economy for the first time in 2020.

The female labor force grows. Women who did not participate in the economy before will get a job or start their own businesses in this decade.

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%

• wned 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

85%..

…. of households identify women as the main decision makers in the household.

85%..

…. of households identify women as the main decision makers in the household.

US$ 20 trillion...

…in annual consumer spending is controlled by

• women. 4

US$ 20 trillion...

…in annual consumer spending is controlled by

• women. 4

Women-owned SMEs: An Untapped Business Opportunity

Women are driving the global economy

US$ 1.7 trillion...

…. is the estimated global women’s market for insurance by 2030. 3

US$ 1.7 trillion...

…. is the estimated global women’s market for insurance by 2030. 3

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Dispelling Gender Myths

Myth Client issue IFC response

BOW is about CSR

• Client wants to be seen as doing right thing by

society and government

• BOW viewed as a loss-making enterprise and not

bothered with the outreach & “numbers”

• BOW about tapping into a high profit

segment

• CSR activities not sustainable
• Clients “see through” CSR

Men/Women portfolio performance same

• Lack of data to show otherwise provides a client with

easy mismatching opportunity

• Emphasis generally on loan quality
• Use similar examples with a range of

business metrics e.g. propensity to deposit, retention rate, cross selling

• pportunities

Do not discriminate so no opportunity here

• We treat everyone the same so there is no problem

with our sales approach

• Not about discrimination but

understanding different needs & financial behavior It’s about creating a pink credit card for shopping

• Purely about small scale product adaptation, not

fundamental new proposition required

• Success requires a combination of

elements: product may or may not be important It might work in

• ther markets, but

not in this market

• Your examples are mainly based on other countries,

we don’t have this level of discrimination/ barriers for women

• Emphasize examples in similar

markets Australia, UK and US

• It works in China, Indonesia,

Philippines, Lebanon, Dominican Rep. It will alienate our male customers

• By branding the bank as “gender-friendly” it will

alienate the male customers

• Research shows that male customers

not negatively impacted

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• 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
• Net funding surplus as a segment
• Provides source of market differentiation in competitive SME markets
• Establishes reputation as an innovator
• Entry and differentiation in specific sectors where concentration e.g. retail, mobile, youth
• 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 footings obtained per relationship and higher fee generation
• Respond well to relationship management-based models
• Demonstrate stronger retention rates in many clients
• Take the business relationship, high likelihood that will take majority of family wallet
• High advocacy creates strong conversion rates for husband business and personal FS
• Up to 85% of family financial decisions made by the women globally

Market Share Growth

• Female customers have lower risk tolerance as both business and personal customers
• Women-led businesses outperform those led by men, including start-ups
• Stronger business plans can create higher acceptance rates and reduced processing costs
• Default rates are either the same or better than male counterparts depending upon market

Higher Cross-Sell and Loyalty Strong Savings Propensity Positive Risk Behavior Linkage to Family Wallet Factor* Description

* - Source: IFC Analysis

Business Case for Banks: Why Target the Women’s Market?

Mark arket dif differentiation, , expansion of

• f mark

arket sha share, , gr greater pr profitability ar are e som some of

• f the

pill pillars sup supporting the bu business s cas ase.

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Women’s Growth has Outpaced the Market resulting in Increased Revenue

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Average revenue per customer in $ in 2015

Source: GBA’s Global Women’s Market Survey, 2017

IFC has a unique integrated approach, combining investment and advisory services

Investment Services Advisory Services for FIs Advisory Services for WSMEs For Financial Institutions ▪ Risk sharing facilities ▪ Loans ▪ Blended finance For Investors ▪ BOW Bonds ▪ Strategy & analytics: Gender diagnostic & Needs assessment, Gender market research etc. ▪ Product Management: product support package template, IFC Gender Product Program ▪ Training: Gender awareness training for Management, IFC Gender skills training course for RMs etc. ▪ Branding & Market positioning /segmentation ▪ Business Planning ▪ Financial Literacy ▪ Creation and Support of Networks ▪ Mentoring Opportunities ▪ Market Access ▪ SME business Toolkit for women ▪ Events & seminars ▪ Online resources & networking ▪ 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.

IFC Product Offering Value Proposition

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As at end-June 2017:

• Total Committed Portfolio: Over US$1.7 billion (IFC and mobilized lenders)
• Total Number of Bank Investments: 53
• Total Number of Advisory Services Projects: 39

BANK INVESTMENTS IN IFC BANKING ON WOMEN PROGRAM

Advisory Projects

• Bank of Palestine
• Access AMSME*
• Banco BHD
• Banco Itau*
• Bank al Etihad
• Bank of Luoyang*
• Bank Muscat
• BCI Fomento

Mozambique

• BII Indonesia
• BFL Laos*
• BLC Bank
• BTPN*
• Chase Bank Kenya*
• DFCU Uganda*
• Diamond Trust Burundi
• Eastern Bank
• IDLC
• Habib Bank
• NBS Malawi
• Rawbank DRC*
• RCBC
• Sanasa Dev. Bank

* Also IFC investment clients in Banking on Women program Banco Internacional (Ecuador) BFL (Laos) BTPN (Indonesia) Chase Bank (Kenya) Improsa (Costa Rica) Banco Pichincha (Ecuador) Rawbank (DRC) (Romania) Yes Bank (India) TransCapital Bank (Russian Federation) Banco Industrial (Brazil) CDH (China) SIB (Cote d’Ivoire) (Turkey) (Kyrgyz Republic) Banco Internacional (Chile) (Georgia) Access Bank (Nigeria) (Brazil) DTB (Kenya) (Turkey) (Turkey) (Vietnam) (Uganda) (Tanzania)

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

(Kenya) (Chile)

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Digital Financial Services – Key to Financial Inclusion of Women

The World Bank and IFC’s Goal in Universal Financial Access

Sources: IFC Enterprise Finance Gap Database (2011), FinScope, IFC IDG Targets for Micro/Retail and MSMEs.

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• The World Bank Group is committed to providing access to finance for one billion people by 2020.

As part of this ambitious goal, IFC has committed to help provide access to 600 million financial transaction accounts by 2020.

• 156 million more men than women have an account at a bank or other financial institution
• DFS is critical in achieving this goal, especially for women. IFC wants to reach 200 million clients

through Digital Financial Services by 2020.

WBG’s Goal in Universal Financial Access (UFA) 2020 = 1 billion = 50% of 2 billion financially excluded

Digital Financial Inclusion for Woman Can..:

• Help bridge the gender gap in account ownership and increase

women’s participation in the financial system–both in terms of the volume and value of transactions.

• Provide women with greater privacy, confidentiality, and control
• ver their finances.
• Give women the opportunity to save formally, lowering or

eliminating the high cost associated with saving informally.

• Improve women’s access to formal credit
• Reduce time spent on travelling to access banks or make utility

payments.

• Have a multiplier effect that drives adoption among more women.

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DFS can Target Broad Types of Potential Clients

Banks & MFIs

NBFIs/ Lending Platform Mobile Network Operators (MNO) Enablers (PSPs, Agent networks) Business Systems/IT*

MFIs FIs

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• To create new

business models

• To extend reach

to mass market clients

• To provide credit

more efficiently

• To reduce churn
• To increase

ARPU and earn additional and non traditional Telco revenues

• To cross sell

new payment services

• To create new

business models

• To extend

reach to mass market clients

• To create new

business models

• To extend

reach to mass market clients

• To capture new

market segments

• To reduce

costs

• To improve and

differentiate

Why DFS?

* Only if the technology/service is core enabler/ building blocks for banking operation

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Mobile Banking Project in PNG

• Papua New Guinea (PNG) has a population of approximately 8 million with 80% of the

population living in rural areas

• 85% of the population are unbanked
• A predominately cash-based society
• Approximately 42% of the population have a mobile phone
• Geography and demographics make traditional banking operations extremely

challenging (> 3 hours to reach bank branch @ cost of 2 times av. daily income)

• The use and growth of mobile phone reach provided an opportunity to introduce

mobile banking

IFC’s Project with Bank South Pacific (BSP)

Objective – reach potential customers in the rural areas with no or little access to banking services IFC supports Bank South Pacific (BSP) to developed financial services via a mix of branch and electronic banking solutions, including mobile banking and EFTPOS terminals Implementation Plan: Agent research – completed July 2011 Business planning – completed September 2011 Commodity pilot – launched November 2011 Branch and agency expansion – kicked off December 2011 The expansion included the introduction of hand-held tablets for account applications/photo id with a wireless card swipe (instant fulfillment pack with a pre-configured card, pin and product information

Results for Three Banks in PNG (Immediate, Affordable, Secure Banking)

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Approach Results to Date

▪ Expanded network of low cost rural branches & agents ▪ Quick acquisition process using tablets, instant issuance card

target distribution product

▪ Expand client base in under/ un-banked segments ▪ Improve usage of electronic banking facilities, reduce cost of cash ▪ Simple account with card and mobile banking facilities ▪ Access to ATMs, EFTPOS, savings account and transaction services

▪ 400,000 new clients acquired (approx. 40% women) ▪ # of e-Payment transactions > 23 million ▪ Value of e-Payments > US$216 million ▪ 13,000 EFTOS Merchants across the country BSP Rural; Westpac; ANZ

Thank You