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 SMEsglobally2

…have been created by women.

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

30% of registered SMEsglobally2

…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 Database2/ A woman-owned small and medium size enterprise (WSME) is, according to IFC,: (a) ≥ 51% owned by woman/women; or (b) ≥ 20%

owned 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 20154/ 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 opportunities

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 other 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?Market differentiation, expansion of market share, greater profitability are some of the pillars supporting the business case.

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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. 11

• 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

over 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 & MFIsNBFIs/ Lending

PlatformMobile 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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Ap

pro

ach

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