Despite commendable progress in the social and economic inclusion of women in Bangladesh, there remain significant gaps in women’s labor force participation, women entrepreneurship, and women’s economic autonomy. Eliminating the female financial inclusion gap with access to affordable and appropriately designed financial products is widely expected to have cross-cutting impacts, which will contribute to gender equity across all domains. The Aspire to Innovate (a2i) program of the ICT Division, supported by the UNDP, promotes women’s inclusion in the financial ecosystem, to support the Government of Bangladesh’s agenda to ensure inclusive, accessible, and affordable services for all citizens.
LightCastle Partners was commissioned by a2i to identify gender-focused services currently offered by financial institutions in Bangladesh, recognize the shortcomings of these existing products from a gender lens, and suggest financial solutions to overcome these shortcomings, with the high-level goal of bridging the gender financial inclusion gap.
To understand the comprehensive nature of the study, the LightCastle Partners team has taken a participatory and collaborative approach with the involvement of key stakeholders at all stages of data collection. In-depth interviews of financial landscape representatives including financial institutions, non-banking financial institutions (NBFIs), microfinance institutions (MFIs), and digital finance services (DFS) of banks were conducted. Along with it, the team has also conducted ethnographic case studies of women micro-entrepreneurs and salaried workers across the urban and rural peripheries.
While exploring the pain points of demand and supply-side actors, the LightCastle team has identified the persistence of formidable challenges. Small-scale entrepreneurs fail to establish their eligibility for loan products due to insufficient business financials and weak business plans. Meanwhile, financial institutions find it difficult to provide loans to these players due to low-risk appetite and lack of ‘last mile’ access. Hence, these small-scaled women entrepreneurs often acquire credit at a high-interest rate from microfinance institutions due to easier access.
Anchoring to the study, LightCaste Partners have gauged the gaps in the system from the perspective of four overarching factors. This allowed the team to make strategic recommendations for the key players in the ecosystem. The key players include regulators, financial institutions, microfinance institutions, and mobile financial service providers. The suggestions catered towards enhancing the current process through the provision of incentives to financial institutions and facilitating capacity development for the entrepreneurs. Such steps will eventually improve the financial inclusion status of women.