New World Bank Study Finds Large Gender Gaps in Access to Formal Banking

April 19, 2013


  • Women are 15 percent less likely than men to have a bank account
  • The gender gap is largest among those living in extreme poverty
  • Legal discrimination is major hurdle to financial inclusion for women

WASHINGTON – Women are 15 percent less likely than men to have a bank account, a pattern that holds in all regions of the world and across income groups within countries, according to a new World Bank study.

In all, 47 percent of women worldwide have a formal account – an individual or joint account – but 55 percent of men do. The gap is largest among those living on less than $2 per day, and among people living in South Asia and the Middle East. In Afghanistan, for example, 3 percent of women have a formal account, compared with 15 percent of men.

The gender gap is large even within income groups, with 6 to 9 percentage points in the developing world, signaling that it isn’t merely a function of income, according to the study based on the World Bank’s Global Financial Inclusion Database (Findex), which has collected individual-level data on financial inclusion in 148 economies.

The gap goes beyond opening a bank account. In fact, woman also significantly lag behind men in saving and borrowing money through formal institutions, even after accounting for individual characteristics such as age, education, income, and urban or rural residence. In Latin American, for example, 8 percent of women report having saved formally in the past year, compared with 12 percent of men.

That can put women, often the main caregivers of their families, at a disadvantage. “Without ownership of an account, it is more difficult for women to save formally and receive government payments or remittances from family members living abroad,” says Asli Demirguc-Kunt, the World Bank’s director of research, who co-authored the study with Leora Klapper and Dorothe Singer. “The lack of a formal account can also create barriers to formal credit channels, which may hinder entrepreneurial or educational ambitions.”

" Without ownership of an account, it is more difficult for women to save formally and receive government payments or remittances from family members living abroad.  "

Asli Demirguc-Kunt

Director of Research, World Bank

Several factors are to blame. Legal discrimination against women, such as in employment laws and inheritance rights, explains a large portion of the gender gap across developing countries, even after controlling for differences in gross domestic product per capita.

In Findex surveys, women also cite the ability to use another person’s account as a reason for not opening one for themselves. Indeed, 26 percent of unbanked women in developing countries – compared with 20% men – say they don’t have an account because a family member already has one. That likely reflects a lack of asset ownership among women, which may affect their economic independence and self-employment opportunities. (In addition, women cite the lack of money, cost, and distance as barriers to access to formal banking, though they do so in equal proportions to men.)

As a result, more women than men turn to alternative means to manage their day-to-day finances and plan for their future financial needs. In Sub-Saharan Africa, for example, 53 percent of women who save do so using an informal community-based savings method, such as a rotating savings and credit association, compared with 43% of men who save. These savings groups fill an important void, but their informality means that the arrangements are susceptible to fraud and theft.

Currently, the Global Findex data can be used to benchmark, diagnose and conduct analysis across countries and different segments of the population within countries, such as gender, age, education, and income. With complete updates due out in 2014 and 2017, it will allow users to compare indicators, such as the decision to use formal savings and credit, over time. That can help governments better understand long-term relationships between the use of financial products and financial inclusion reforms, as well as initiatives targeting women.

“Women in developing economies are still more excluded from the financial sector than men, even after controlling for income and education,” says Klapper, a lead economist in the World Bank’s research department. “We hope our ability to quantify this gap using hard data can help inform policy makers and the private sector on how to narrow the gender gap in financial inclusion.”

The Global Findex data were collected by Gallup, Inc. using the Gallup World Poll Survey. The Research Group is building the database with a 10-year grant from the Bill and Melinda Gates Foundation. The complete country- and micro-level database is available at: www.worldbank.org/globalfindex