URGENCY

Despite concentrated efforts to combat its effects, COVID-19 continues to disrupt lives and economies in many parts of the world with the effects of the pandemic still lingering, and uncertainty over new variants.

Although the consequences of this unprecedented crisis have yet to be fully measured, as effective sex disaggregated data is still lacking in many jurisdictions, developing economies and vulnerable populations have been the most impacted. Applying a gender lens to policy responses, particularly to all new policy developments, is essential to effectively mitigate the lasting social and economic damage brought about by the pandemic.

This study explores how often resource-constrained AFI members have successfully applied financial inclusion objectives and a focus on women as joint policy lenses to achieve an effective crisis response. In dealing with large-scale disruptions, women’s financial inclusion is a critical enabler if: a) it ensures that delivery structures (i.e. accounts, mobile wallets, agency networks, cashless payment interfaces, etc.) are made available to women and are designed for inclusion and usability of women, and b) it ensures that the choice and design of crisis response policies reflect the priorities, needs and constraints of women.

70%

Significant financial inclusion gains have been made in the last decade, including for 70 percent of the world’s unbanked population represented by the AFI network,3 yet 760 million women are still financially excluded.4

However, the global gender gap in access to financial services started to narrow in 2021 but remains wide in parts of South Asia, the Middle East and North Africa, as well as a few African economies, and is increasing in parts of Latin America and the Caribbean (LAC), and Sub-Saharan Africa.

Encouragingly, some large countries like Bangladesh, Egypt, Nigeria, and Pakistan with gender-intentional responses during the crisis saw an inversion of gaps that had previously been widening.5 Even still, the pandemic’s economic challenges to formal employment pose a risk to financial inclusion overall.

Women are suffering outsized economic impacts, including unemployment and loss of income, due to their disproportionate representation in informal work and services sectors, such as retail commerce and hospitality which were the most affected by mobility restrictions and could not easily shift to work-fromhome operations. As school and childcare facilities closed intermittently or over longer stretches of time,6 the unpaid domestic care burden fell primarily on women. These factors are exacerbated for women who also have intersecting vulnerabilities, such as rural dwellers, youth, older persons, persons living with disabilities, and forcibly displaced persons. It is also worth pointing out that while employment levels for men have, in many instances, nearly caught up and returned to pre-pandemic levels, the levels for women have not.7

3 Alliance for Financial Inclusion. 2021. Mitigating the Impact of COVID-19 on Gains in Financial Inclusion. Available at: https://www.afi-global.org/ publications/mitigating-the-impact-of-covid-19-on-gains-in-financialinclusion-early-lessons-from-regulators-and-policymakers/

4 Calculated based on the UN Population Division’s Population Prospects: 2019 Revision for ages 15 and above with Global Findex 2021 data (26 percent exclusion for women and 21.7 percent for men, equivalent to 633.5 million excluded men).

Mitigating the Impact of COVID-19 on Gains in Financial Inclusion.

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5 CCX analysis on the basis of Global Findex data from 2011, 2014, 2017 and 2021. For Bangladesh, the gender gap shrank from 29 to 19 percent between 2017 and 2021, for Pakistan from 28 to 15 percent, for Nigeria, from 24 to 20 percent, and for Egypt from 12 to 6 percent (though Findex figures fall well short of local supply-side figures).

6 In Uganda, schools only reopened on 10 January 2022, after some 22 months of closure but in many other countries, a patchwork of closures, remote and hybrid instruction has introduced an enormous degree of unpredictability into the lives of parents of kindergarten and school-age children, especially mothers. See for example, the variation over time and school districts documented for the United States at: https://crpe. org/pandemic-learning/tracking-district-actions/

7 International Labour Organisation. 2021. An uneven and gender-unequal COVID-19 recovery: Update on gender and employment trends 2021. Available at: https://www.ilo.org/wcmsp5/groups/public/---ed_emp/ documents/publication/wcms_824865.pdf

National strategies and agendas have often overlooked women’s productivity, which contributes to economic diversification, positive development, and income equality. Recognition of the necessary and integral role of women in the financial stability and resilience of national economies8 has recently led to greater emphasis on addressing women’s financial exclusion.

AFI members endorsed the DAP in 2016, which supports members in accelerating women’s financial inclusion and closing the financial inclusion gender gap across AFI jurisdictions.

Global efforts were facing strong headwinds in increasing women’s financial inclusion even before the devasting effects of the COVID-19 pandemic. While many policymakers were developing enabling ecosystems for women’s financial inclusion, progress was being held back by factors outside of the regulators’ sphere of influence, including national ICT infrastructure, the availability of a national identity system, and social and cultural norms which negatively impact women.

The constraints of care responsibilities and sectoral trends were quoted by a majority of the 30 AFI members surveyed as reasons for them to identify women as more negatively affected by the pandemic.9 Some AFI members who were surveyed lacked data to assess the impact of the pandemic on financial services usage. Over half saw an equal or higher negative impact on women in all aspects of financial inclusion for women while one member surveyed felt that men were disproportionately affected. Over half of the AFI members felt that women were pushed into loan default more so than men.10

Concentration in informal work also meant that women were often unable to access conventional formal sector government support efforts.

60%

Some 740 million women working in the informal sector saw their income drop by 60 percent in the first month of the pandemic.11