Mobile money has been touted as the panacea towards achieving financial inclusion in emerging markets like Myanmar. But is it entrenching a gender gap among those accessing financial services?
By Dora Heng
For emerging markets like Myanmar, financial inclusion remains a cornerstone of the development agenda.
Myanmar has made strides towards greater financial inclusion in recent years. According to a study commissioned by the United Nations Capital Development Fund (UNCDF) Myanmar, adults with access to at least one formal financial product increased from 30% in 2013 to 48% in 2018. This represents a nearly two thirds increase in financial inclusion, surpassing the initial 2020 target of 40% access coverage.
Despite progress in financial inclusion, a gender gap in financial access remains
Women in Myanmar are less likely to have access to formal financial services. 46% of women have access to formal financial services, while 50% of men do. Data also revealed that women are more reliant on informal channels for accessing credit.
The gender disparity is also reflected in labour market outcomes. Women represent more than half of Myanmar’s total population (51.8%) and 52.3% of the country’s working-age population aged 15-64. Yet, they are much more likely to be economically inactive (79%) than men (21%).
Limited asset ownership limits female financial participation
The government is counting on the growing proliferation of mobile phones to pave the way for large-scale financial inclusion. In October 2019, Myanmar’s Central Bank granted a mobile financial services license to state-owned telecom company MPT for the launch of its mobile money platform.
To date, 181 companies are officially providing mobile financial services in the Myanmar market. These mobile financial service providers are convenient for people who do not have bank accounts and can be accessible nationwide and in rural areas.
However, the big push towards mobile financial inclusion will continue to entrench existing financial gender disparities if mobile phones are not available to all in equal measure.
Women lag behind men in terms of mobile phone ownership. Just 74% of women own a mobile phone in Myanmar, compared to 87% of men. Among these, only 35% of women use their mobile to access the internet. 57% of men are mobile internet users.
Limited asset ownership among females restricts access to formal credit channels. Women often lack ownership rights in Myanmar due to cultural norms favouring the registration of assets with men. 98% of male-headed households working in agriculture had access to agricultural land compared to only 61%of female-headed households. This land can be used to provide collateral for credit. Without assets in their name, women are locked out of many traditional lending options.
Promising industry collaborations are making headway in closing the gender gap
Recent local and international initiatives are setting out to address the gaps in financial inclusion in Myanmar. In collaboration with United Nations Capital Development Fund (UNCDF) and the Asian Development Bank’s ADB Ventures, the DaNa Facility launched the Fintech Challenge Myanmar 2020 last month, with the goal of improving the quality and quantity of financial services to the underserved and unbanked.
According to U Bo Bo Nge, Deputy Governor, Central Bank of Myanmar, the bank hopes that this challenge will be “an opportunity to see and test new financial technologies and new business models”.
The challenge seeks to harness the innovation of the private sector and apply it to the gender gap in financial inclusion, especially within areas of alternative lending and leveraging non-traditional data to demonstrate the creditworthiness of underbanked or unbanked customers.
By exploring new financial products and expanding the datasets used to determine reliability, more female business owners can secure larger loans to grow their businesses.
Promoting digital and financial literacy training is another area ripe for innovation. By making digital skills more accessible to women, they can learn to leverage mobile technologies and reduce their reliance on their male counterparts for financial matters.
There are strong indications that the gender gap will accede in the coming years. As women aggregate new digital skills and agency to increase their purchasing power for financial services, financial institutions will be forced to innovate. New players seeking to cash in on the expanding female market will fill the digital lending space with product offerings tailored to women. Under these improved conditions on both the supply and demand side, more females will gain access to both traditional and alternative lending options.