2023-Public-Sector-Perspectives

Barriers to women’s economic empowerment In Citi’s Women in the Economy II report, four overarching systemic constraints to women’s economic empowerment were identified: • Adverse social norms; • Discriminatory laws and lack of legal protection; • Failure to recognize and redistribute unpaid household work and care; and • Lack of financial, digital and property assets. While transformation needs to occur across all four of these areas to accelerate progress, this article focuses on the large gender gaps in digital and financial inclusion and asset ownership. The level of women actively participating in the workforce in 2022 is expected to remain below pre-pandemic levels across the globe and especially in the emerging markets. The variance in hours of employment between men and women is contributing to the continuation of the gender pay gap. In instances where women are members of the labor market or even business owners, access to financial products is still a challenge. The report notes that in emerging economies, women borrowers are often unable to access basic financial services such as bank accounts. According to the International Finance Corporation (IFC), up to 70% of women- owned SMEs in the formal sector in emerging economies are unserved or underserved by financial institutions. Lack of access to a bank account hinders the ability of women to save or access credit products. True economic empowerment for women will only be achieved when there is equal access to needs-based financial services such as bank accounts, savings products, insurance and credit products as well as financial education. There is also a strong business case to improve access. For those women entrepreneurs and women-owned SMEs that have accessed loans, the evidence shows they tend to have a lower non-performing loan ratio than total SME loan portfolios. Benefits: When economies are inclusive, everyone gains Women in the workforce The ability to choose to work and participate in the economy is fundamental to an individual’s quality of life. The financial inclusion of women equips them with the tools necessary to accumulate assets, earn an income, manage financial risk and fully participate in the economy. It has been shown that when women are given the opportunity to participate in the labor force, economies and societies prosper. Despite this, according to the International Labor Organization (ILO), the current global labor force participation rate for women is just under 47% compared to 72% for men. 3 In low and lower-middle-income countries, the female labor force participation rates are below 40%: change in these countries would clearly have a significant economic impact. 4 In addition to gains in economic growth and output, women’s economic empowerment also drives much wider social and economic multiplier benefits across families and communities. When women have the opportunity to earn money, save and own assets, the door opens for them to potentially start their own business (as they are more likely to have access to credit products). Women- owned or led businesses generally employ more women employees, which can help drive a virtuous circle, further boosting women’s economic empowerment. In addition, women tend to invest more of their income than men in the health, education, and welfare of their families and communities. 5 Reducing the gender gap in the labor force can significantly boost global GDP. The countries with the largest gender gaps have the greatest potential to improve, which could be especially meaningful during times of low to no economic growth. 3 h ttps://www.ilo.org/infostories/en-GB/Stories/Employment/barriers-women#global-gap 4 https://www.worldbank.org/en/topic/gender/overview 5 Citi GPS: Women Entrepreneurs Report 28 Gender Equality in Emerging Markets: Barriers, Benefits and Best Practices