Financial products need a women-centric design. It’s about breaking down prejudice

  • Failure to design financial products and services without considering women perpetuates existing inequalities.
  • Women-centered design aims to dismantle these barriers, giving women entrepreneurs a more level playing field.
  • When women are able to have better access to finance, they can make a significant economic contribution to society.

The women are 17% more likely be killed than men in a car crash, and a sexist design process is to blame.

Too often, human-centered design treats “human” as the proxy for human. The crash test dummies have sizes and weights representing the average man, which means the seat belt does not take into account a woman’s body shape, and the results are lethal. While death is an extreme example, comfort and practicality are a regular burden for women because the world is designed for men, by men, with women being mistakenly seen as a niche group, compared to 50% of the market.

The impacts of not designing products that put women at the center of the design process can also have dramatic economic impacts, leading to an endless cycle of inequality. Imagine being refused a loan because of your husband’s debt or because you cannot find a man to guarantee your loan, as is still the case in some parts of the world.

What is female-centered design?

Women-centred design recognizes that the needs of women and the barriers they face are fundamentally different from those of men. Barriers can include laws and political systems that disadvantage women, harmful social and gender norms, and limited access to finance due to lack of credit history or collateral, male guarantor requirements or restrictions on land ownership.

The woman-centered design process can be summarized as follows:

  • Discover by understanding the needs, wants and barriers that women face.
  • To define and synthesize key issues and opportunities.
  • Idea new ways to serve women.
  • Test first ideas and concepts quickly with women.
  • Adapt and design new products and services that meet the needs of female customers.
  • Launch and iterate products based on regular feedback.

How breast cancer screening became part of a business loan

CARE Ignite The program supports women entrepreneurs looking to grow their businesses by providing much-needed access to finance, technology and networks, and building entrepreneurial capacity and skills. To do this, we work with our local partners to develop products and services tailored to their specific needs. Our job is to ensure that the voices of these women are heard in the boardroom, where key business decisions that impact the customer are made, typically, by men.

In Peru, we wanted to develop a tailor-made loan product for women entrepreneurs with our microfinance partner Financiera Confianza, who believe that investing in women is a great investment. By adopting a women-centric approach, we were able to learn more about their barriers to access, imagine and test solutions with them through focus groups, interviews, pitch tests and surveys. virtual. We discovered three key things: they couldn’t get the right size loans because they had no credit history; they needed greater repayment flexibility and shorter seasonal loans for busy periods; and they were unable to cover all their medical expenses, especially preventive care.

The end result was a loan product designed exclusively for women. The loan does not require any credit history and includes an alternative credit assessment, based on references and behaviors, and does not take into account their husbands’ debt, unlike other products on the market. Repayment is over 45 days to reflect the seasonality of business needs, and the loan includes cancer insurance, covering breast cancer screenings. The maximum loan amount has been reduced so that women can take out a smaller initial loan, pay it off, and upgrade to a larger loan with a new credit history.

The product launched in June 2021, and we continue to iterate and verify female satisfaction to ensure the product remains relevant and demand-driven. The feedback we’ve received is amazing. Delia Nizama, a Peruvian entrepreneur, told us: “It seems important to me that it is precisely women entrepreneurs who are going to use this precious tool, that they be consulted on what else we expect from them. We’ve seen incredible traction, with 15,000 loans disbursed in six months, and in the midst of a global pandemic.

Designing for women is simply good business

Some might say these adaptations we’ve made seem risky (eg no credit history needed), especially during COVID-19 where credit markets are shrinking, but global data shows women have better ratios non-performing loans: 3% compared to 4.9% for all SME portfolios according to an IFC assessment of 157 financial institutions. And although it is still early, Emprendiendo Mujer has a default rate of 0.5%, 5.5% better than the rest of the portfolio.

Thus, women are not only better loan clients, but Data also shows that women are stronger entrepreneurs, tend to hire more women, and are more likely to create social impact and value than their male counterparts. Designing for women shouldn’t be such a hard sell.

Investing in Women-center design

Enabling women to have better access to finance could release 330 billion dollars of annual global turnover, but the financial world is still dominated by men. It’s not that men can’t have empathy for women, it’s that men aren’t women. They cannot experience the obstacles that women face every minute of every day. As a result, ideas about women’s needs and barriers will continue to slip through the cracks. If we want to close the gender gap, we need to create products and services that have three characteristics: they add value to women’s lives; are easy to access and use for women; and are affordable based on their financial behaviors.

Enabling women to have better access to finance could unlock $330 billion in annual global revenue.

-International Labor Organization.

How dramatically different would the financial world be if there were more women designing products and services with women’s unique needs and barriers in mind?

To promote women-centered design, here is what we need funders and financial service providers to do:

  • Designing with women, not for them. Put women at the center of the design process and build solutions for their needs.
  • Like our partner Financiera Confianza, invest in a serious effort to bring more women-centric products and services to the world, and maybe even start evaluating men and women across credit reporting mechanisms.
  • Hire more women on product design teams and let women drive the design process like the financial inclusion lead, Jack Bourga, did for our CARE Peru team.
  • Bring more women into the boardroom. Women in the design team are a big step forward, but we can go further. Women need a seat at the table where key financial decisions that impact the client are made.
  • Introduce more financial institutions owned and run by women, such as First Women’s Bank the first female-owned, female-led financial institution in the United States, designed 100% for women, by women.

Until we see these changes happening, we will fail to realize the economic potential of women in our economies.

Director of Women’s Entrepreneurship, Financial Inclusion Specialist and Human-Centered Designer, CARE.

This article was originally published at the World Economic Forum.

Read also : India, Japan exchange notes on China, agree ‘four-point plan’ on Ukraine crisis


Comments are closed.