Banking Agents, On the Frontlines of Financial Inclusion
Banking agents, or small shops contracted by banks to process client transactions, are laying the foundation for the digital transformation of the financial sector. They have also become a safer channel for clients to get cash during the pandemic.
How can character count toward identifying good credit clients?
The financing gap for micro, small and medium-sized enterprises (MSMEs) in Latin America and the Caribbean was estimated at $1.2 trillion in 2017, nearly a quarter of the global emerging market total. If this gap were a country, not only would it be a credit desert for most inhabitants, but it would edge out Mexico as number 15 on the list of the world’s largest economies in terms of nominal gross domestic product (GDP).
How men and women sharing the workload can promote regional growth
Women do more unpaid work than men, with significant consequences for the economy. From India to Denmark, the pattern is the same. While women invest an average of 4.5 hours per day in unpaid work, men invest barely 1.5 hours. It is estimated that the unpaid work that women do worldwide is equal to $12 trillion a year, or 11% of global GDP for the year 2025.
In the case of small businesses in Ecuador, which we analyzed in a study I published recently, we found that the most important factor explaining the differences between the profitability of companies managed by men and women is precisely the time dedicated to unpaid work: household tasks and caring for children and the elderly.
This does not mean that women work less in their professions than men. In the sample I studied, men and women invest the same number of hours per day and the same number of days per week in their businesses. But women dedicate a larger number of hours to unpaid work in the home and, to a greater extent than men, also tend to perform many tasks at the same time ― multitasking―combining business activities with household work.
There is extensive literature in psychology showing the negative effects of multitasking on performance. The greater the cognitive demand and the effort required to perform a task, the greater these effects. For this reason, we automatically stop talking to our passenger (task 1) when trying to pass a truck on a narrow road or merge onto a highway (task 2).
However, when in the study we compare companies with the same characteristics (age of the business, capital, number of employees, sector of economic activity, age and years of education of the manager, etc.), including the time managers devote to the business and to unpaid work, we see that companies managed by men and women are equally profitable.
This means that there is enormous economic growth potential if we resolve these disparities. Companies led by women in Latin America and the Caribbean could be an engine of growth for the region if men and women shared household tasks in a more balanced way, but it is difficult to imagine this change happening from one day to the next.
On International Women’s Day we want to emphasize the importance of gender equality in the productivity of the region’s companies. Each of us has the task of contributing to this change. At IDB Invest, along with the Inter-American Development Bank, we have been working for more than a year on our campaign 100% Committed to Gender Equality, in which we have explored how public and private sector projects become more productive when they invest in equality.
Similarly, at IDB Invest, we have created instruments, like the Women’s Empowerment Principles Gender Gap Analysis Tool (WEPs business gender tool); knowledge products, like our study “The Power of Gender Equality in the Workplace;” and we provide advisory services to help companies improve their gender equality standards. The time for sharing the burden is now and it is key to the growth of our region.
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