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Financial Education as Stepping Stone to Women’s Economic.

Financial Education as Stepping Stone to Women’s Economic.

“I always teach basic finances using my dolls. Can I introduce Señora María, Señora Teresa and Señora Josefa? Each has a different way of saving money: Señora María has a formal savings account, Señora Teresa buys livestock for breeding and Señora Josefa stores her extra money in a tin can, kept at home. “Rut Pelaiza took the participants to the 63rd session of the United Nations Commission on the Status of Women (CSW) at one of its training sessions with rural women.

At a side event organized by the BBVA Microfinance Foundation (BBVAMF), Rut and others presented women as “precursors of change” focused on financial inclusion and digital transformation. In Peru, 66% of women do not even have a bank account, making it a segment with limited knowledge of key financial concepts. As Gustavo Meza-Cuadra, Permanent Representative of Peru to the United Nations, said at the side event, “There is still a long way to go to integrate women into the financial system. Sharing best practices such as the Rut method is one way to achieve this. “

Financial education is critical to the long-term success of financial inclusion initiatives. It amplifies the “empowering effect” of access and control over resources by entrusting ownership and responsibility to the beneficiaries. Focusing these efforts on women in vulnerable situations is therefore particularly useful. On the one hand, as heads of households (if not single-parent households), they have information that allows for efficient management of family finances. Similarly, basic financial management skills will make users more responsible for products and services.

Microfinance institutions (MFIs) like ours are paying attention to this, and we know that responsible financial inclusion is not just about providing access to credit, savings facilities, or insurance. It also involves learning how to best use these tools to improve the well-being of customers.

At BBVAMF, we apply this approach in our six institutions in Latin America. We pay particular attention to women’s economic empowerment, which currently affects 57% of the more than two million entrepreneurs served in five countries (Colombia, Peru, Chile, Panama and the Dominican Republic). Of these women entrepreneurs, 84% live in precarious conditions, 40% at best have primary education, 45% are single parents with dependents and almost 30% live in remote rural areas with limited access to basic services such as health and health. education.

Despite these potential setbacks, we observed in our assessment of social performance that 37% of women entrepreneurs left their initial level of poverty in the second year of our collaboration with us. In addition, they have higher growth rates than their male counterparts: their sales increased by 19% (against 14%) and their net income and assets increased by 20% and 25% respectively (compared to 12% and 21% respectively). %). These are promising results that strongly support our approach.

These figures are interesting because our clients run businesses with less capital, fewer assets and fewer payouts than men. In general, they also have less knowledge of finance and generally face more barriers to participating in the formal banking system. Most of them also expressed doubts about the possibility of generating additional income, given that their husbands “already take care of the family”. Some people even fear becoming too indebted and joining a financial institution.

Source: SDG Knowledge Hub.