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Enabling Women’s Savings

Is a move toward digital savings a better answer to the financial needs of poor women than continuing to roll out robust savings associations?

An excellent paper just published by Women’s World Banking pleads for more active consideration of gender in the design of digital savings products. The paper, “Digital Savings: the Key to Women’s Financial Inclusion”, states (with evidence) that most banks give little consideration to the gender of their clients when designing digital banking products, and thus lose some great opportunities to bank poor women.  Savings will often be the best way to attract women to banking services, since they will often not have access to any formal financial services and, unless they have access to a robust savings and loan group (such as a Village Savings and Loan Association), will not have good security or structure for their savings. This will be particularly the case in rural areas. This paper is well worth reading, especially for anyone involved in the design of digital banking products targeted to the poor.

Some of the concerns raised by the paper are particularly acute in rural areas – women’s lack of access, lack of formal identity documentation, illiteracy, etc. These are some of the very issues that NGOs are trying to address in creating savings groups. Well-designed digital banking products that lead with savings will be a significant contributor to financial inclusion of women in poor rural communities.

The question posed at the beginning of this blog still stands though. Will digital savings capabilities eliminate the need for savings groups? My short answer is: at least not as they are currently visualized. While I welcome the development of digital banking services, and strongly share the conviction that full financial inclusion is critically dependent on ubiquitous access to digital payments, savings, loans and insurance products, there are additional benefits from savings groups that should encourage increasing growth.

  1. Well-structured savings groups are secure, trusted and reliable. A group with a strong and enforced constitution guards well against the impact of loan defaults, financial crises, and fraud.
  2. There is a sense of community ownership in a savings group that, at its best, can lead to deeper community cohesion and peace.
  3. Savings groups with a commitment to regular savings will often encourage more discipline in household and small business finances than self-directed savings plans. Digital products are emerging that provide similar discipline through automated savings from digital wallets, etc, but these are in early stages.
  4. Membership of savings groups provides opportunities for financial education that may be difficult for banks to offer, particularly in areas with low female literacy.
  5. Well-run savings group meetings give members far more than just a savings and loan mechanism. They provide opportunities for learning in areas as diverse as HIV/AIDS awareness and prevention, conservation agriculture, and literacy.

I would suggest that banks, as well as the many organizations like CARE and World Renew that promote strong savings group models, should explore and develop synergies between digital banking and savings groups. Here are a few questions to be answered:

  • What can banks learn from NGOs with long experience of successful savings groups, in order to enrich digital banking products?
  • Should savings groups be designed as stepping stones to bank-owned digital finance products, or will they operate alongside?
  • How can banks best market digital banking services to women and men who already participate in savings groups?
  • Are there ways in which banks and NGOs promoting savings groups can partner to provide a “best of all worlds” savings solution for urban and rural women?

I’m sure there are others. Poor households are used to having many different vehicles for saving and borrowing, so it will be natural for them to consider digital banking as just another tool in the toolbox, rather than as replacing savings groups. Banks will need to take this into account in product design.

Graham Seel is a financial services consultant who volunteers with World Renew in the area of Improving Livelihoods. The content of this blog, and associated comments, reflects his personal views and is not reflective of the Norman Group, World Renew, the CRCNA, or any of its partners.



Comments: (2)

John Fitzgerald
John Fitzgerald - AIB - Dublin 04 September, 2015, 08:52Be the first to give this comment the thumbs up 0 likes

Great thought-provoking post.

In general I would have seen gender as something actively not to be considered, trying to avoid issues of discrimination (see EU rules on insurances) but this is real and practical with definite life-changing benefits.

Graham Seel
Blog group founder
Graham Seel - BankTech Consulting - Concord 04 September, 2015, 16:57Be the first to give this comment the thumbs up 0 likes

Thanks for the comment, John. There are two aspects to consideration of gender. One is the marketing one, in which good companies even in the West consider buying approaches, spending patterns, etc of women as against men. The other is the inclusion one, not so relevant in the rich world, but terribly important in many parts of the world where exclusion of women from financial services is much greater. Having said that, you're right that it can go too far. See, for example, my last post on that topic. I believe there is still quite a bit of work to do to understand how design of products with gender in mind will contribute to full financial inclusion.

Graham Seel
Blog group founder

Graham Seel

Principal Consultant

BankTech Consulting

Member since

17 Apr 2015



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