Bridging the gap in
financial inclusion

Disclaimer

bKash happens to be the largest mobile money service provider in Bangladesh with tens of millions of clients. It is also a close collaborator of BRAC in numerous projects including the Innovation Fund for Mobile Money project. Consequently, bKash has become a household name in the programme and is used by the clients as synonymous to mobile financial service. For the purposes of this publication, it would be best to consider 'bKash' a synonym for mobile financial service.

Introduction

We have dedicated this booklet to the women of BRAC: those we work for, and with. In it, we will highlight three key drivers we have identified behind the persistent gender gap in Bangladesh, and the steps we have taken in response.

It was obvious from the outset that improving women’s access to digital financial services would become a thrust area of the Innovation Fund for Mobile Money. Since the project’s launch in 2013, BRAC Social Innovation Lab has partnered with the Bill & Melinda Gates Foundation to experiment with mobile money services and products. We initially piloted within a number of programmes before deciding to scale our solutions in Microfinance, Education, and Integrated Development. The project has since introduced female clients to mobile money through savings products, salary and school fee collection.

The reason to primarily focus on women was that anecdotal experience and research both indicate that household expenditure on food and education increase when women have greater control over income. Further, women are more likely to save and use those savings to invest in their own businesses and in a better future. And the benefits of closing the gender gap in financial inclusion don’t stop with women or remain limited to the present. Greater equality also enhances economic productivity and improves development outcomes for the next generation.

This booklet is our fourth in a series documenting the experience of scaling mobile money. And this time, we have dedicated it to the women of BRAC: those we work for, and with. In it, we will highlight three key drivers we have identified behind the persistent gender gap in Bangladesh, and the steps we have taken in response. We will describe how our female staff and clients have tested, adopted, and (most importantly) adapted mobile money in ways that make sense for them. And we will share our observations of the power of women in acting as agents of change: how progress towards financial wellbeing is not limited to just a single client opening a wallet, but ripples outwards to encompass families, communities, and economies.

By the numbers

970,946

new wallets till date

78.8%

percent wallets belong to women

$28.56m

bKash transaction within BRAC in 2018

236,258

clients regularly use mobile money for savings installments

2.7

million people trained on mobile money in 2018

8,695

cashless BRAC schools

23,078

teachers get salary in their mobile wallet

23,281

extension workers trained on bKash in 2018

6,272

staff members trained on bKash in 2018

100%

cashless payment for lunch at headquarters

44,600

staff members receive allowances through bKash

66,000

health workers to get paid through bKash by end 2019

116,000

clients in remote shoals and wetlands

2,100

CSAs to become bKash agents by 2020; 700 till date

cashless micro finance branches in remote areas

Setting the context

31%-50% — Growth of account holders from 2014-2017

35 million — bKash users in Bangladesh

29 percentage points — gender gap in financial access

As recently as two decades ago, Bangladesh’s rural north was riddled with poverty and experienced monga (famine-like situation). The south was ravaged by cyclones. In the north east, transportation by boat was the only option for almost three quarters of a year. The West was far from what we mean by the global ‘West’. However, progress spread quickly across the country in the form of concrete roads, resilient crops and affordable medicines. Bangladesh is now poised to become the 26th largest economy in the world by 2030, lifting millions out of poverty in the process....

The economy has changed, and with it life. In an age when tens of millions own cell phones, mobile money has spread like wildfire. The percentage of Bangladeshi adults with financial accounts rose from 31% to 50% between 2014 and 2017 — a gain almost entirely due to a 20% increase in bKash mobile money accounts. bKash was the first mobile money service and continues to control a vast majority of the market. There are currently 35 million bKash users in Bangladesh with monthly transactions as high as USD 2.86 billion (February 2019).

The unprecedented triumph of mobile money notwithstanding, there was a snag — women were being left behind. Other than in the bustling cities, women were hardly integrated into this thundering juggernaut present in digital finance. The Global Findex shows a gender gap of 29 percentage points in financial access, which is significantly higher than the global average of 9 percentage points. This contrast in access to financial services poses a stumbling block to integrated development. And Bangladesh is not alone in its struggle to close the gender gap.

Spotlight

The friendly neighbourhood CSA

Sirajum Monira is all smiles all the time. That is also one of the reasons she is blazing the trail in getting women to open mobile wallets

Building confidence at the grassroots

Sharmin Akhter never had much use for a mobile wallet before it became compulsory to pay her son’s school fees. She has been a regular user since then

The bigger picture

Access to financial services can transform lives and livelihoods of the unbanked, especially poor women of poor countries. But identifying the right approach to digital financial inclusion for women is a challenge.

It is widely accepted that financial inclusion is key to reducing poverty and achieving inclusive economic growth. Yet, the Global Findex shows that as of 2017, about 1.7 billion adults remain unbanked - without an account at a financial institution or through mobile money. Globally, half of the unbanked adults come from the poorest 40 percent households of their economy. Of the unbanked, 56% are women.1 In developing nations like Bangladesh, Pakistan, Jordan and Nigeria, cultural norms play a role, limiting women’s access to accounts and agents.

Studies find that women’s usage of mobile money is linked with improvement of their household’s earning potential and future wellbeing. Research shows that in both Indonesia and Tanzania, women micro-entrepreneurs encouraged to open mobile savings accounts reported having greater household decision-making power than those who did not have mobile savings.

A study in Kenya demonstrated how mobile money enabled women-headed households to increase their savings by more than a fifth, allowing 185,000 women to start up small businesses.

Meanwhile, women-headed households in Nepal spent 15 percent more on nutritious food and 20 percent more on education after getting digital savings accounts.

Having recognised the significance of women’s financial inclusion, initiative is being taken across the world towards closing the gender gap. In Pakistan, Karandaaz recently collaborated with GRID Impact to design a smartphone application for mobile money specifically for women. With the understanding that cultural norms in Pakistan limit women’s travel, the interface included audio instructions which allows them to use the app from home. In Andhra Pradesh, women were found to be more comfortable transacting with female bank agents, providing an incentive for financial institutions to actively recruit female business correspondents to expand their client base.

Pathway to reach a million clients

Step One

Address pain points of wallet registration

Step Two

Build confidence in technology

Step Three

Provide hands-on ‘teaching’ rather than ‘lecturing’

5 days for a lifetime of change

Ripple effects

Many women reap the benefits of mobile money beyond BRAC services by adopting bKash for convenience and to improve their wellbeing. Access to digital financial services means that women can receive money directly and keep it safe.

Women are often tasked with managing household financial transactions such as paying bills, receiving money, and buying goods and services, even when they don’t have access to formal financial institutions. It should be no surprise then, that once BRAC clients gained the confidence to use mobile money, they quickly began to explore possibilities to make their lives more convenient and financially secure.

Research shows that mobile money lessens risk of significant financial shock through access to remittances and lending within a group. Direct disbursement also provides women with a certain level of privacy and autonomy to reinvest funds as they deem fit. When women become financial decision makers, savings increase and labour force participation improves.

Behind the scene

The CSA app looks simple. Deceptively simple. Building it was not so at all.

'Her' stories

Growth of bKash agents in remote areas

Total bKash agents
in 6 sub-districts

2,351

bKash agents in 2019

383

bKash agents in 2015

Driving a cashless ecosystem

When BRAC began its work with the Innovation Fund in 2013, it had not anticipated the extent to which the impact of mobile money training would spill over. Women have proven themselves to be agents of change, driving grassroots uptake of mobile money within and beyond their immediate network. If a woman adopts mobile money, it creates significant ripple effects throughout the larger ecosystem. She will in turn introduce it to her family, friends, and neighbors. Women have also proven themselves to be significant drivers of economic growth.

Increasing financial inclusion for women through access to mobile money in turn creates a more efficient, productive, and transparent economy.

With almost a quarter of a million students in its 8,695 schools, BRAC leveraged this potential to create an active base of mobile wallets in one stroke. BRAC made tuition payment through bKash compulsory which not only brought parents under the mobile money umbrella, but also generated ripple effects in communities and local markets. Project staff first introduced parents, mostly mothers, to an eight-step process in 2016 which explained the payment system through flashcards. BRAC Education Programme (BEP) has since opened 216,856 bKash accounts. Only 11,978 parents, accounting for 5.52% of the whole, had bKash accounts before BRAC’s intervention. The BRAC effect did not stop there. Newly incorporated housewives urged their husbands to open accounts and also spread the word to their neighbours. With more users, bKash agents popped up in markets and cashless transactions skyrocketed. People had money flowing in from Dhaka and other cities to remote villages. Birostail village in Bangladesh’s rural north, about half an hour’s auto-rickshaw ride away from Rajshahi is a case in point. A BRAC employee, Mainul Islam, says he gets requests from people, who are not BRAC clients, to help them learn bKash during his small group meetings with parents. “I had started with only the parents. Now everyone wants to learn. There weren’t so many bKash agents around before. The situation has changed.”

Razia Sultana, teaching at the BRAC school in Birostail for more than 15 years, has seen the changes in the locality firsthand. Just three years back, there was only one bKash agent point in the sub-district. “Now we can find at least three points in walking distance,” says Razia, who now receives her paycheck through bKash.

Sharmin Sultana sits outside the school every day while her 8-year-old daughter attends classes. She introduced her trader husband Md Ibrahim to bKash after learning about it at BRAC group meetings. Ibrahim has a business in Rajshahi’s Paba sub-district and had to visit banks regularly. This meant several hours of commute every week. Sultana then suggested he open a bKash wallet and transact through mobile money. A year down the road, even Ibrahim’s vendors have caught on. They use bKash too.

The story is almost the same in villages and communities across the country. BRAC training has been one of the most successful vehicles of mobile money expansion, spreading from students to parents, women to families and neighbourhoods to districts.

The digital way forward

BRAC has spent the past five years identifying and addressing primary barriers to mobile money adoption for women. The largest NGO will have opened over 1 million bKash accounts across the country by 2019 and trained more than six million clients, mostly women. From digitizing salaries to promoting bKash for savings schemes, BRAC has identified ways to catalyse financial inclusion through mobile money....

The power of mobile money to transform the economic lives of women — and their larger networks — is clear. And BRAC is trying to make full use of that potential as it strives to develop products and services targeting new population segments to ensure that no woman is left behind on the journey to financial inclusion. This includes digitisation of wages for ready-made garment workers and piloting loan products for Facebook-based entrepreneurs.

Achieving gender equality in financial services, however, will require a multifaceted response that reaches far beyond ensuring meaningful access. Most critically, regulators will need to explore ways to further foster use of mobile money by lifting transaction fees and limits, for instance. Research demonstrates that women transact with mobile money at a lower rate than men due to greater price sensitivity. If partners across Bangladesh can come together in developing a regulatory environment conducive to inclusivity, then financial inclusion for all will not remain a dream any more. It will become the reality.

Bridging the gap in financial inclusion