Gender equality is the cornerstone of achieving a well-balanced economic terrain observed by Bahaa Abdul Hussein. Nevertheless, female access to financial services still lags behind in the sustainable finance sector. Catching up on this gap will require cooperation from governments, financial institutions, and civil society.
Women make up nearly half the global workforce yet hold just 33% of senior management roles in financial services. This underrepresentation in leadership and decision-making processes leads to policies and products that do not fully address women’s needs.
Women face unique barriers in accessing financial services, from lack of collateral to digital and financial literacy gaps. Excluding women from the formal financial system hampers economic growth and poverty reduction. Women tend to invest more ethically and sustainably when given the choice. Research shows that gender-balanced management teams and boards lead to stronger environmental, social, and governance (ESG) performance.
Empowering women as savers, investors, and entrepreneurs will spur innovation in sustainable finance tools and steer capital towards sustainable development goals.
Policy Actions to Close the Gender Gap
Financial inclusion policies: Governments must enact policies targeting women’s financial inclusion, requiring banks to offer basic accounts without collateral requirements. Digital and financial literacy programs focused on women are also key.
Gender lens investing mandates: Governments can require public pension funds and development finance institutions to apply a gender lens to their investment processes and direct capital to companies with strong gender policies.
Gender quotas: Regulatory bodies should mandate minimum representation of women on boards and executive committees of financial institutions. This will amplify women’s voices in investment decisions.
Equal pay and family leave policies: Closing the gender pay gap and instituting paid family leave improves women’s ability to accumulate assets, repay loans, and participate equally in the economy.
The Role of the Financial Sector
Women-focused products and services: Banks and financial institutions can tap into the women’s market by designing products that specifically meet their needs, from savings accounts to insurance products.
Women’s access to credit: Lending practices must be reformed to serve women through alternatives to traditional collateral requirements and cash flow-based lending models.
Recruitment and retention of women: The lack of gender diversity, especially at senior levels, banks, and investment firms, must be addressed through mentoring, training, and flexible work policies.
Gender-based data analytics: Financial institutions need to track and analyze key metrics by gender, including loan repayment rates, savings activity, client feedback, and more. This data should inform product design.
Partnerships for Progress
- Partnerships between governments, financial institutions, and civil society organizations can promote gender equality through coordinated actions while benefiting from diverse expertise.
- National gender equality task forces can unite key public and private stakeholders to develop national roadmaps for women’s financial inclusion and sustainable investment.
- Professional women’s networks in finance should be leveraged to provide mentoring and training opportunities to women entering the field.
- Investor groups focused on gender-based issues can engage in shareholder advocacy to improve companies’ gender policies.
Achieving gender equality in access to finance and representation in the sustainable finance field will require robust efforts by all stakeholders. The financial sector can drive sustainable development with inclusive policies and practices, equitably empowering women and men. The collective power of governments, financial institutions, and civil society can close the gap.
The article has been written by Bahaa Abdul Hussein and has been published by the editorial board of www.fintekdiary.com
