How does digital finance impact rural women?
This post was co-authored by Dr. Erin Taylor, Dr. Isaac Lyne and Dr. Rida Akzar.
Rural women in the Global South face a double burden of labouring hard both in the household and on the farm while having less social capital or prestige than men (Carneigie et al 2019; Moglia et al 2020; Rigg et al 2004).
International organizations and many researchers believe that digital financial services can help lessen the hardships such women face. For example, they may make it easier for rural women to make and receive payments for their farming produce or other side businesses. They can also make it easier for credit providers to access the market, which may in turn make it easier for rural women without capital to access credit in a timely and convenient way.
Using financial tools through mobile phones finance can certainly reduce the need to travel long distances to a bank branch or microfinance institution. Such services could also provide more convenient and potentially more secure ways to save money while gaining interest and could also provide better access to insurance products.
However, little research has been done on whether digital financial services actually make women’s lives easier.
First, access to digital financial services comes with risks, such as making it easier to become overburdened with debt or falling victim to fraud.
Second, it isn’t clear whether rural women can really access services reliably or make sufficient use of them. For example, women’s lower incomes can make it difficult to save money.
Third, even when gender access to mobile phones is equitable, digital financial practices can embody patriarchal norms (Pei and Chib 2021). Men often maintain control over formal accounts and make decisions about how money should be spent (Johnson 2016), or access better credit without becoming overburdened with debt.
These factors underline the need for gender-sensitive ways to think about the impact of development initiatives in lower-income countries (Carnegie et al 2019), including assumptions about how digital financial tools can make rural women’s lives easier.
We decided to examine this topic as part of a wider systematic literature review on the impacts of digital finance on farming households (both men and women). A literature search revealed 19 papers (8 quantitative papers, 9 qualitative papers, and 2 mixed methods) on the topic of rural women in particular. We noted that impacts tend to fall into two key areas: households and well-being, and work and livelihoods.
Households and well-being
The literature suggests that, in terms of women’s empowerment, digital financial tools can have a range of positive impacts on women living in rural areas. For example, Dorfleitner and Nguyen (2022) undertook a study of the effects of the adoption of mobile money on women’s empowerment in Bangladesh, India, Kenya, Nigeria, Pakistan, Uganda, and Tanzania. They found that mobile money has a positive impact on women's empowerment through managing money, and that the impacts are more pronounced in rural areas. This lines up with an observation by UN Women that rural women are more burdened by household labor than urban women (UN Women 2020).
Similarly, Liu (2022), in a study of rural Chinese women’s bargaining power in marriage, found that online banking helps Chinese women overcome their subordination by helping them curb their husbands' spending and thereby better manage the household budget.
Three papers found that mobile money helps women access healthcare for their families (Bukari and Koomson [2020] in Ghana, Egami and Matsumoto [2020] in Uganda, and Ky et.al. [2017] in Burkina Faso.
Qualitative research on Maasai pastoralists in Kenya (Rutten and Mwangi 2012) suggest that mobile money may help women be resilient in particular ways. However, in Ghana, Sakyi-Nyarko (2022) found no impacts of mobile money on resilience, gendered or otherwise.
Just two papers on the household identified ambivalent impacts: van Klyton (2021, 2022) addresses a situation where women’s use of digital financial services decreased due to a lack of interest and finally resistance to using them, for instance because cash is associated with economic activities, such as travelling to the town to sell produce, that overlap with social activities like shopping with friends and going to church. Gukurume and Mahiya (2020) also note that mobile money use in Zimbabwe can have ambivalent effects since it can involve both productive cooperation and conflict.
Work and livelihoods
We found fewer papers on rural women’s productive activities, but they also suggested that digital finance has positive benefits. It is important to note that none of these papers discussed women as farmers: while there are many papers published on the topic of farming and financial services, especially in China for instance, none of them are gender disaggregated. Instead, papers that are disaggregated focus on women as owners of SMEs.
In Kenya and Uganda, Koomson et al (2022) found that the use of mobile money enhances entrepreneurship opportunities for female rural residents especially. In Bangladesh, Ahad et al. (2013) described how the extension of mobile banking to rural SMEs improved rural-urban SME business and control of finances.
On the negative side, Vashistha et al. (2019), in their study of merchants’ use of payment systems in India, found that sometimes women business owners and customers alike may find cashless payment burdensome in rural localities where cash itself is important for lubricating social relations. This is pertinent to observations elsewhere of reasons why women might be ambivalent towards digital financial services and find reasons to resist them (Van Klyton et al 2021, 2022).
One qualitative paper examines the impact of rural women’s use of a digitalised microfinance service in India called Cashpor (Gaur and Potnis 2022). They point towards rural women’s empowerment in business that also has spillover effects in terms of household impacts. They found that the use of Cashpor in India enhances women’s financial, informational, and digital literacy, and that partly as a consequence of this, their improved position as agentic business operators has empowering impacts on their self-esteem as they foster new subjectivities that can destabilize patriarchal norms within families and communities.
However, focusing on women’s agency arising from improvements in their entrepreneurship is also quite limiting in context: besides not encompassing agentic use of mobile finance that is unrelated to entrepreneurship, this framing may also fail to include women at the lowest levels of income or literacy.
More research needed!
A problem with the available literature is that the majority of the papers focus on positive impacts. This contradicts a wider body of literature (not specific to gender or rural areas) that outlines many problems related to digital financial services. Access to mobile financial tools is known to have increased indebtedness, exposed users to fraud, and widened the digital divide (Kusimba 2021; The Economist 2020). Some of these negative impacts are specific to vulnerable populations (e.g., literacy, device access) but others pose a general risk to the population (e.g., fraud, choice).
Moreover, there are still plenty of software and infrastructural issues to address. Whereas cash transactions are relatively reliable, digital services are plagued with problems causing transactions to fail, often with little means of redress. In Kenya, Kusimba (2021) notes that the ease of transaction associated with mobile money makes it easier for family members and others to demand remittances.
Despite the lack of data on rural women, it is clear that delivering services via mobile cannot be explained by a binary of either positive or negative effects. It seems that mobile access amplifies both positive and negative outcomes depending upon the power dynamics prevalent in a given context. Intrahousehold dynamics and social norms, customs, and institutions influence the demand and supply of financial services, including mobile finance.
Of course, there is still much we do not know about positive impacts. Given the scant amount of research, it seems that the vast majority of rural women’s mobile finance activities and experiences are not well understood. But given the potential risks posed by the increasing availability of financial services via the mobile phone, it is critical that we stop to ask: to what extent do these negative impacts affect women, especially women in rural areas. More research is needed to gain insights into the actual practices, needs and preferences of rural women worldwide.
References
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Bukari, C. and Koomson, I. (2020). Adoption of Mobile Money for Healthcare Utilization and Spending in Rural Ghana. In Churchill, S.A. (ed.), Moving from the Millennium to Sustainable Development Goals: Lessons and Recommendations, pp. 37–60. Springer, Singapore, https://doi.org/10.1007/978-981-15-1556-9
Dorfleitner, G. and Nguyen, Q.A. (2022). Mobile Money for Women’s Economic Empowerment: The Mediating Role of Financial Management Practices. Review of Managerial Science, 1–30, https://doi.org/10.1007/s11846-022-00564-2
Egami, H. and Matsumoto, T. (2020). Mobile Money Use and Healthcare Utilization: Evidence from Rural Uganda. Sustainability, 12(9), 1–34, DOI:10.3390/su12093741
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Gukurume, S. and Mahiya, I.T. (2020). Mobile Money and the (un) Making of Social Relations in Chivi, Zimbabwe. Journal of Southern African Studies, 46(6), 1203–1217, DOI: 10.1080/03057070.2020.1823682
Johnson, S. (2016). ‘We Don’t Have This is Mine and This is His’: Managing Money and the Character of Conjugality in Kenya. The Journal of Development Studies, 53(5), 755–768, DOI: 10.1080/00220388.2016.1205729
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