HomeNewsPHL bank account ownership stagnant at 20%–WB report
PHL bank account ownership stagnant at 20%–WB report
WOMEN, young Filipinos and the poor are getting the short-end of the stick when it comes to owning bank accounts in the Philippines, a World Bank report revealed.
The World Bank's The Global Findex Database 2021 showed that the gender gap in account ownership in the Philippines is at 8 percentage points while the age gap is 15 percentage points.
The income gap in terms of account ownership in the Philippines and Turkey, the report stated, has remained stagnant at over 20 percentage points.
"The very big increase in the male-female gap in the Philippines and the large decrease in Pakistan seem hard to explain. Only five countries had a negative male-female differential in 2021, while the gaps for India, the Republic of Korea and Sri Lanka were zero," Peter J. Morgan, a senior consulting economist and advisor to the dean at Asian Development Bank Institute (ADBI), wrote in an Asiapathways weblog.
The report noted that in East Asia and the Pacific region, where the Philippines belongs, there was "virtually no gender gap" in account ownership in Indonesia, Mongolia and Thailand.
The age gap in account ownership in the Philippines is similar to the global age gap but was described worse compared to China and Turkey where there is no major difference in account ownerships between age groups.
The report also stated that Myanmar, another member of the Association of Southeast Asian Nations (Asean) country, where younger adults are 11 percentage points more likely than older ones to have an account.
For the income gap in account ownership, the World Bank said, many developing economies like the Philippines still have income gaps that are in the double-digits.
The report stated that Mozambique, Myanmar, Nigeria, Uganda and Zambia, where account ownership ranges from 45 percent to 66 percent, the gap is more than 20 percentage points.
However, the World Bank said Mongolia and Thailand have already achieved near-universal account ownership with almost equal coverage of richer and poorer adults.
"Gender and income are not the only individual characteristics that appear to matter for the likelihood of owning an account. Age, educational level, employment status and rural residency are all associated with significant differences in account ownership," the report stated.
If these underserved sectors such as women are given access to accounts, the report stated, these women will be more empowered and have a louder voice in the household in terms of finances.
The report stated that a study in the Philippines showed that women who used commitment savings products that encouraged regular deposits into a personal bank account increased their decision-making power in the home.
This financial independence also shifted the spending of their families to household goods relevant to their needs, such as washing machines.
Morgan said part of the efforts to improve access to bank accounts is to use financial technology (fintech), such as having a mobile money account or having made or received a digital transfer.
While this may bring to the fore the need to address the digital divide, fintech remains to offer opportunities to have financial inclusion not only for women but young and low-income people.
"Given that fintech is expected to play an important role in promoting financial inclusion, the digital gender gap threatens to pose a significant barrier to increasing the financial inclusion of women," Morgan said.
"This points to the need for policies to increase both digital financial access and digital financial literacy for women," he added.
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