Across South Asia, the low participation of women in formal entrepreneurship is a cause for concern. Access to finance is persistently the biggest barrier for many female entrepreneurs. In India and Bangladesh, fewer than 40 per cent of women have their own bank account. In Pakistan, this figure falls below 10 per cent.
Yet, despite this challenging environment, women increasingly own and lead micro, small and medium-sized enterprises (MSMEs), which are an essential engine for economic growth. Supporting women’s access to finance can spur economic progress and expand markets. In turn this can improve health and education outcomes for communities at large. To drive up women’s economic participation in South Asia, it is vital to focus on untapped markets of women business leaders, including – though not limited to – the ‘missing middle’ of finance for MSMEs and, specifically, on those owned and led by women.
British International Investment (BII) has a track record of 35 years of investment in the region. To date, we have made close to 95 investments in Asian financial service providers spread across India, Pakistan, Bangladesh, Sri Lanka and Nepal.
Our experience has heightened our awareness of the importance of digital financial services. These can be a key driver of inclusion, particularly for those who have been historically excluded from traditional financial systems, for example, low-income populations, rural populations, minorities and women.
That’s why one way we work with our partners is to accelerate digital transformation. Approaching digital transformation and digital financial services with a gender lens is critical as well as effective – for financial sustainability and impact. The role of transparency through digitisation and financial service providers can help the combined goal of inclusion of women while targeting the financial needs of women-SMEs to grow their businesses.
Our new study carefully outlines the challenges and opportunities of digital financial services for women-owned and -led MSMES, making the business case for financial service providers to consider adopting digital financial services as they look to grow their customer base. Surveys, interviews and desk research were conducted on financial service providers across four key markets: India, Pakistan, Bangladesh and Nepal. The findings point to four key recommendations, which you can read about in the report. We hope these findings provide guidance for South Asian financial service providers to deepen their digital financial services to offer greater transparency and access to much-needed capital.
