Gender gap-in-use-of-financial-services-in-turkey-by-ana-maria-munoz-wb

THE GENDER GAP IN THE USE OF FINANCIAL SERVICES IN TURKEY

Leora Klapper, Sandeep Singh, Ana Maria Munoz Boudet

Financial inclusion in Turkey is high as compared to a wide range of comparison groups

58% 42% 43% 20% 51% 90% 0%

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Turkey ECA MIC Islamic BRIC OECD

Women

Is there an access constraint? Not really. The reach of the financial sector in Turkey is wide—as measured by account penetration, use of electronic payments, and credit card ownership—relative to both developing and high-income countries.

Source: Global Findex; Demirguc-Kunt and Klapper, 2012

Yet the gender gap in account penetration is significantly larger than comparable groups

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Turkey ECA MIC Islamic BRIC OECD

Men Women

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11 9

Turkey has the widest gap among middle-income countries. Estimates show that women in Turkey are 38 percentage points less likely than men to have an account, after controlling for other individual characteristics- income, employment, education, age.


What explains account ownership for men and women in Turkey?

- log odds + log odds

Women with more than a primary education are more likely to be banked, but this relationship between education and financial inclusion is not true for men.

Account ownership increases with income for women, but this ‘income gap’ does not exist among men

26.5%

41.1%

54.8%

22.7%

39.8%

49.9%

60.7%

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Poorest quntile 2nd 3rd 4th Richest quintile

Income

Turkish Men

Turkish Women

MIC Men

MIC Women

Across middle-income countries, we see a relationship between income and financial inclusion, but not among Turkish men.


There is an increasing use of bank accounts among young women (who are also more educated)

71.6%

44.4%

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Men Women Men Women Men Women Men Women

Turkey ECA MIC OECD

Age 18-24 Age 25-64 Age 65+

The ‘typical’ female account holder is younger than the respective male.

Female labor force participation is higher for younger cohorts of women

Source: TURKSTAT LFS (1992,97,2002,2007,2012). Data labels represent year of birth.

1983-871978-82

1973-771968-72

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15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64

Age Group

Still low levels

And being wage employed in Turkey increases the probability of owning an account…

…by 17 percentage points for men—but 74 percentage points for women. Being self-employed also increases the likelihood of women to own a bank account.

Men Women % Own Bank Account

Obs % Obs % Men Women

Employed (full or part time)

195 34.4% 67 10.7% 94.3% 97.9%

Unemployed 30 6.8% 14 2.3% 53.2% 32.4%

Self employed 112 21.7% 14 2.7% 93.2% 92.2%

Out of workforce 185 37.1% 382 84.3% 69.5% 22.6%


But only 30% of women participate in the labor force…

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2013 2012 2011 2010 2009 2013 2012 2011 2010 2009

Women Men

Unpaid family worker

Self-employed

Employer

Employee

…and only half of them are in wage employment, and 10% are own-account workers

Source: TURKSTAT, LFS (2009-2013)

Both men and women are most likely to use their accounts to receive wages

Turkish women use their accounts to receive money from family and friends more often than men. Men and women deposit about 2 times a month into their accounts, and 98% of the banked adults has a debit card, higher than the average across middle income countries of 57%.

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Turkey ECA MIC BRIC Islamic OECD

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Turkey ECA MIC BRIC Islamic OECD

Men Women

Money from family


Turkish men and women cite similar reasons for not having an account.

Income-related issues are highly cited, followed by access-related issues. Personal choice issues like lack of trust are higher for Turkey than the average of other MIC.

0%

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Too far away Too expensive Lack ofnecessary

documentation

Lack of Trust Not enoughmoney

Religiousreasons

Family memberalready has an

account

Turkish Men Turkish Women MIC


Turkey has a low rate of personal savings when compared with other countries

Only 10% of Turkish adults report saving. Domestic savings declined from an average of 23.5% of GNI in the 1990’s to an average of 17% on 2000-08 period, and to 12.7% in 2010.

0% 10% 20% 30% 40% 50% 60% 70%

Men

Women

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Women

Men

Women

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Women

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ey

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OEC

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Savings - Formal only Savings - Formal and Semi-formal Savings - Semi-formal only Savings - Other only

Formal savings are lower among women


Only 5 percent of adults in Turkey report borrowing from a bank, credit union or MFI in the past year.

The use of store credit is much higher in Turkey. The low use of bank financing might be explained by the very high use of store credit reported by 43 percent of Turkish adults.

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Men

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Women

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Women

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Women

OEC

DB

RIC

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mic

MIC

ECA

Turk

ey

Credit - Bank Credit - Store credit (no bank credit) Credit card user (no bank or store credit)

Store credit (no Bank)


The main source of credit for men and women in Turkey are friends and family.

The most common reported reasons for taking out a loan in Turkey include emergencies or health purposes (44%), to pay school fees (31%), or to extend or repair one’s home (18%).

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Men

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Credit - Formal only Credit - Formal and Informal Credit - Informal only


Gender Gap in Account Penetration and Legal and Cultural Norms

Panel A: Women, Business and the Law Panel B: World Economic Forum

Panel A shows a weak relationship between legal restrictions to female employment and a gender gap in financial inclusion. Panel B shows a de facto measure of gender inequality, Turkey fares low on both ends.

Saudi Arabia

Implications for policies and actions….

• Banking penetration is not paying off for the bank sector –investment to increase presence across the country has not expanded user base.

• Store credit use (largely an informal practice) and credit card use will not reflect in greater financial knowledge or awareness

• Shared bank-accounts are not always conducive to women’s financial knowledge and independence, reduces their decision-making capacity and business creation initiative.

• Kenya: Individuals accounts= + total individual owned resources (income and assets) + rates of entrepreneurship.

• Joint bank accounts= no dif. income, no dif. entrepreneurship. + investment in household reparations (higher agreement, lower returns)

• Savings and future income shocks: Lack of control of own savings, ability to access savings, lose of savings

Some policy options for public and private sector

• Start early: School-based financial education and savings programs

targeting girls to build financial capabilities and interest early on.

• Meaningful financial services for women’s needs and use: • Brazil: electronic accounts for Brazilians working abroad who want to send

remittances home direct from a host-country credit card at lower transfer cost than traditional channels, to feed accounts of relatives in the country.

• Generation of commitment saving products (based on date, funds level or purpose -school fees)

• Target the constraints: • Simplified bank account regime for clients with small balances at no cost,

easy to open- with basic credit approved in pre-agreement.

• Incentives alongside information and knowledge to break beliefs. The importance of planning for the future- show how savings would grow.

Gender gap-in-use-of-financial-services-in-turkey-by-ana-maria-munoz-wb

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