Women’s Financial Inclusion: A Pathway to Sustainable Development
Gender equality is essential to sustainable development. Building strong and inclusive economies requires fully integrating women and girls into all spheres of human endeavor, not only as beneficiaries of equal opportunities, but as powerful shapers of social and economic development.
The World Economic Forum’s Global Gender Gap Report shows an increased disparity between men and women, with the average gap increasing to 32 percent, compared to 31.7 percent last year. After decades of slow but constant progress, 2017 was the second consecutive year in which progress regarding economic participation was reversed. The economic sphere remains one of the most challenging global gender gaps; only 58 percent of the economic participation gap has been closed. If this trend persists, it will take 217 years to eradicate.
The Latin American and Caribbean region is ranked in the middle of the Global Gender Gap Index, with an average gap of 29.8 percent. Remarkably, the region is home to two of the top 10 fastest-improving countries in the world: Nicaragua and Bolivia. Undoubtedly, the region has made important strides in the last decades, as more than 70 million women have joined the labor force. Nevertheless, the economic gender gap remains a significant challenge. According to the U.N. Comisión Económica para América Latina y el Caribe (CEPAL), the female labor participation rate still stands at 50 percent in the region, compared to 80 percent of male labor participation. In addition, men continue to earn more than women for doing the same job. In Chile, Brazil, Mexico, and Peru, men in professional fields can earn up to 25 percent more than their women counterparts. The service sectors are still women’s major areas of employment and women continue to be under-represented in the fields of science and technology. According to the CEPAL Gender Equality Observatory, an average of 31.1 percent of women in the region do not have personal financial resources, based on access to paid work. This lack of financial autonomy limits their decision-making power and increases their vulnerability.
Women’s economic empowerment should to be a priority on the region’s development agenda as it is a powerful catalyst for progress. When women generate their own income, experience shows that they invest in their families and communities. Furthermore, women’s economic empowerment means greater participation, opportunities, and control over resources. This, in turn, contributes to gender equality, social development, poverty eradication, and inclusive economic growth. In addition, it is potentially helpful in addressing other problems women face, such as gender violence.
In order to leverage female economic empowerment, the region needs to tackle several challenges, including but not limited to fostering women’s financial inclusion. According to the World Bank’s Global Findex Report, women face many more barriers than men with respect to access to financial services. Their exclusion implies minimal support for risk mitigation, entrepreneurship, evenness of consumption, asset accumulation, and wealth creation. The lack of access to financial services reduces women’s capacity to escape the poverty trap and manage their own resources independently, thereby reducing their opportunity to participate in productive projects.
Latin American women, especially poor women in marginalized areas, have minimal access to bank accounts, credit, savings mechanisms, digital payment methods, investment opportunities, and insurance. What makes participating in the financial market so difficult is that women of low income do not meet institutional requirements: they typically do not hold property titles or have a credit history or other collateral to serve as a guarantee. There are technological, policy, legal, and cultural barriers that constrain women’s participation in the financial market. These obstacles marginalize women from the economic system and perpetuate the gender economic gap. Furthermore, many women in Latin America lack a basic financial education about ways to manage their resources efficiently and recognize savings and investment opportunities. As a result, they do not benefit from services that could provide support in the face of negative economic shocks.
In expanding women’s access to financial services, it is important to be aware of the factors, including discrimination, that limit such access and to work towards the design of new policies. Improving financial inclusion and financial literacy requires adopting long-term, innovative approaches that specifically incorporate a gender perspective.
Enhancing women’s economic empowerment requires providing women at the base of the economic ladder with affordable financial tools to save, obtain loans, make investments, and increase financial literacy. According to recent research carried out in Chile cited by an Innovations for Poverty Action (IPA) recent study, women who received access to a savings account not only reduced short-term debt by 20 percent, but also improved their families’ educational level, nutrition, and healthcare. The Chilean experience and others like it demonstrate the expansive impact of more gender-inclusive financial ecosystems.
Closing the economic gender gap is not simply a matter of social justice. It is also a driver of progress. According a recent Gallup-International Labor Organization (ILO) study, global GDP could increase by $5.3 trillion by 2025 if the economic gender gap was reduced by 25 percent. Concrete steps are needed to enhance women’s financial inclusion and empowerment in order to narrow the economic gender gap and foster sustainable development.
Angélica Fuentes, Founder Equal Invest
Angélica Fuentes is a Latin American businesswoman and impact investor, who has been recognized by Forbes Magazine as one of Mexico’s most influential women.
Ms. Fuentes was appointed CEO of Grupo Imperial in 1992 and quickly positioned the company as a top player in Northern Mexico’s energy sector. Under her leadership, Grupo Imperial’s annual growth rate increased from 5% in 1992 to 9.5% in 2005. Ms. Fuentes served as President of the Business Energy Network of the Asia-Pacific Economic Cooperation Agreement (APEC) from 2002 to 2004, and as President of the Mexican Natural Gas Association from 1996 to 2000. From 2007 to 2015, she served as CEO of Grupo Omnilife-Angelissima-Chivas. Under her leadership, the company became one of the top 100 corporations in Mexico.
Throughout her career, Ms. Fuentes has dedicated significant time and resources to NGOs, international organizations and professional groups that support the cause of women. She participated in the World Economic Forum’s Gender Parity Programme, and led the Mexican Gender Parity Taskforce. She currently serves on Secretary Clinton’s International Council on Women’s Business Leadership; is member of the Private Sector Leadership Advisory Council of UN Women; is a Global Advocate for the Girl Up Campaign, a United Nations Foundation program; co-chairs the PVBLIC LATAM regional platform; is member of the Latin American Program Advisory Board of the Woodrow Wilson International Center; and is member of the Global Dignity’s International Council of Advisors.
Her work in this field has been recognized by numerous honors and awards. In 2015, UN Women gave her the Women’s Empowerment Principles CEO Leadership Award; she was the first female CEO to receive this award for championing gender equality in the private sector. In 2016, PVBLIC Foundation, Ismael Cala Foundation, and the United Nations gave her the award for Latin Woman Empowerment. In 2017, she received the Corporate Social Responsibility Award from The Maestro Cares Foundation.
Gender equality, women empowerment and the eradication of poverty have always been a priority in all her endeavors. In 2014, she established the Angelica Fuentes Foundation. In 2016, she founded A Complete and The Imperative Fund. In 2017, she founded Equal Invest, The Beauty Station and A Complete Journey.