Gender gap in digital finance

Around the world, we’ve all heard of the unequal “pay gap” between males and females in the workforce. However, is anyone familiar with the “credit gap” and the “capital gap”?

On paper, the Philippines seems impressive in terms of women’s leadership, women’s participation, and women’s rights. After all, we have had two women presidents and three women vice presidents. We are considered a highly matriarchal society as well. Multiple businesses are run by women, and board rooms and decision-making bodies are gradually being populated by women.

Despite the significant progress and inclusive achievements we have made and continue to make in fostering an all-inclusive financial ecosystem, the reality on the ground tells a different story: the fintech and digital banking industry still have a long way to go in help close the gender finance gap. This requires urgent action, as many females are still unsupported and left behind in the digital finance world.

Addressing the gender gap starts with our honest self-reflection and by asking the right questions. What opportunities are we offering to the many women entrepreneurs in our country? Are these enough? How can formal financial institutions continue to encourage and promote women-led enterprise development? It is only through extensive listening, empathetic understanding, targeted problem solving, and effectively executing appropriate gender-responsive practices that we can fully realize the financially inclusive nation we envision for everyone, regardless of class, age, socio-economic status, and of course, gender.

We cannot understate our vital role as financial institutions in supporting the development of women-led enterprises. It is our responsibility to pave the way for gender parity and economic empowerment, but the harsh truth remains: we still have a long way to go. According to the International Finance Corporation, although women-led enterprises represent 30 percent of registered businesses globally, only a measly 10 percent have access to the necessary capital to grow and expand their businesses. Shockingly, the gap between men and women in accessing credit for their businesses can be as high as $320 billion, as reported by Harvard Business Review. These statistics further reiterate that financial institutions play a critical role in closing the gender finance gap, scaling women-led businesses, and advocating for women’s empowerment.

In the Philippines, the gap is also stark between women-led and men-led businesses. In comparison, 58 percent of women-led enterprises face difficulty in accessing valuable capital for their business ventures, while only 37 percent of men-led enterprises have similar challenges. Tailor-fitting financial services and products to the needs of women-led MSMEs is imperative. It is important to accept that in today’s finance world, women face many challenges in accessing empowering and growth-enabling financial services on a daily basis.

Why are there invisible barriers for women who just want to build their businesses, and enjoy financial freedom? These barriers are especially harder to overcome for women in the global south, rural areas, and remote communities.

In the Philippines, women surpassed men in the ownership of e-money accounts, cooperatives, and microfinance NGOs in 2019. This is based on a report by the Bangko Sentral ng Pilipinas (BSP). While women are leading in these frontiers, however, they fall depressingly when it comes to bank account ownership. Women point out that the complex process of onboarding into a bank and the document requirements make it tiresome for them to open simple basic deposit accounts.

It is often unimaginable to fully comprehend the challenges women face in balancing the demands of their households, caring for their children, running businesses, and commuting to work, let alone finding time to visit a bank. As a society, we must support women to make their lives easier. As an industry, we must acknowledge that banking should never be a complicated process, especially for those whom we hold as the pillars and lights of our homes. Without them, where would we be?

As an example, RCBC has taken concrete steps to bridge the gender finance gap by developing innovative banking solutions that cater to the needs of women entrepreneurs. Its multi-lingual Taglish and Cebuano financial inclusion app, DiskarTech, has become a go-to choice for mompreneurs, female sari-sari store owners, and women-led MSMEs due to its convenience and accessibility. Sixty-two percent of RCBC DiskarTech basic deposit account users are women, and 70 percent are in rural areas. It offers loans, savings accounts, insurance products, and investment opportunities are designed to help women entrepreneurs expand their businesses, which can have a positive impact on their rural communities and the economy as a whole.

The BSP’s Financial Inclusion Survey and Digital Payments Transformation Roadmap are twin documents that jumpstart the transformation of the overall banking system and the economic system to make space for more women. I believe that women not only need to be at the receiving end of the banking revolution, but they also need to be given space to speak and relay their concerns, and to take the helm in generating multi-contextual solutions.

By forging partnerships across different sectors, such as NGOs, civil society, LGUs, national government, fintech, and the banking industry, we can establish innovative and tailored solutions that address the complex issues faced by women today. It is time for us to prioritize the voices of women, empower them to be the drivers of their own needs, and ensure their participation in the decision-making process. Only through genuine collaboration and cooperation can we achieve lasting progress toward gender equality and inclusive economic growth.

The aim of the banking industry is not only to lessen the gap, but to eliminate every gap that differentiates every gender’s capacity to become economically mobile, independent, and free. More than women’s inherent potential, it is the very design of our playing field that dictates their probabilities of success.

There is nothing more exciting than empowering every enterprising woman to reach their full potential. At the end of the day, it’s all about winning together!

Lito Villanueva is the Philippines’ award-winning thought leader on digital transformation and inclusive digital finance. He is the executive vice president and chief innovation and inclusion officer of RCBC. Concurrently, he is the chief digital transformation advisor for the Yuchengo Group of Companies. He is also the founding chairman of Fintech Alliance.ph, the Philippines’ largest organization of startups and unicorns that collectively generates over 90 percent of digital transactions volume in the country today. He was elected global chairman of the South Africa-based Alliance of Digital Finance Associations from over 30 countries. He was named among the 2023 Seamless Asia’s Top 50 Banking and Payments Leaders, Top 100 Fintech Leaders in Asia, Top 100 Filipinos on LinkedIn, Mr. Fintech of the Philippines by BizNews Asia, and chief innovation officer of the Year by The Banker, among his over 70 global and regional accolades.