Mary Ellen Iskenderian | Rewiring Gender Equity Around the Globe

Jennifer Tescher:
Welcome to Emerge Everywhere. I’m Jennifer Tescher, founder and CEO of the Financial Health Network. For two decades, I’ve worked with leaders across industries to answer one central question, how can we make people’s financial lives better? Now I’m sharing these conversations with you. Listen in to hear how these visionaries are rewiring our society to support financial health for all.

2024 marks the 20th anniversary of the Financial Health Network and of the broader financial health movement. And we’re taking this time to reflect on our progress and to think about the headwinds and tailwinds that are going to impact our progress in the years to come. In this episode, we’re going to talk about gender inequity and the challenges that creates for driving financial health for all. Rather than looking at just the situation in the United States, we’re going to zoom out to look at the financial health gender gap that persists around the world. Regardless of where they come from, women lack access to financial services, impacting their ability to achieve financial security. And while it may seem like financial products are largely commodities, it turns out that no product is gender-neutral. Joining me to discuss this is Mary Ellen Iskenderian. In her role as CEO of Women’s World Banking, Mary Ellen is helping to drive the creation of financial products that are designed specifically for women to empower them, their families, and their communities. Mary Ellen, welcome to Emerge Everywhere.

Mary Ellen Iskenderian:
Thanks so much for having me, Jen.

Jennifer Tescher:
I don’t have to tell you that March is Women’s History Month. And in the United States, there’s a lot of continuing focus on gender parity around things like wages, representation in corporate CEO and director roles. Our research demonstrates that the financial health of women certainly lags well behind men. Only one in five women in the United States are financially healthy compared to 29%. Almost a third of men. And women report worse outcomes on all measures of financial health, spending, saving, borrowing, planning, you name it. While all of these are really important issues, though. They look a lot different when you widen the aperture and you consider women of the global south, which is where you do your work. So, I was hoping to start, you could paint the picture for us of what poor women around the world are facing this March.

Mary Ellen Iskenderian:
Well, first of all, thank you so much for presenting that backdrop because I guess I hear those statistics and I think, as I often do, how much more we share as women then divides us actually by geography, by socioeconomic status. Unfortunately, in pretty much every demographic, if you see poorer people having less access to financial services, financial resources, that correlates very closely to women being poorer and having less access. We still see globally that there is a 6% gender gap between men and women in terms of the very formal definition of financial inclusion, which really is only having an account in their own name. But if you look more deeply at what truly being included means. Today, for example, in the developing world where we’re working, ownership of a smartphone or at least an internet enabled phone is absolutely essential to financial services. And digital financial services are a boon to women’s financial inclusion have completely changed the game.

It’s probably the one bright spot we saw during the COVID Pandemic that so many governments made their COVID relief payments digitally delivered. And some countries like India, for example, made payments only to women and only digitally. So, as a result, you saw literally in a matter of weeks after the first lockdown, 25 million new accounts opened almost exclusively by women. So, you saw huge gains being made, but it’s now a question of really making sure that we hold onto those gains and that the women really have access to the full range of financial services, not just that account.

Jennifer Tescher:
In this country, post pandemic, a lot of families have been very challenged. It’s counterintuitive. The government really amped up the social safety net during COVID to a tremendous degree and now has pulled it away, again, pulled the rug out. I’m curious, given the example you just gave in India and elsewhere, have these gains that were made during COVID, have they stuck or are we also seeing some retreat?

Mary Ellen Iskenderian:
It’s a little bit of a mixed picture. So, on the one hand in say, Indonesia where Women’s World Banking does a great deal of work, and where the government has really put a lot of its efforts behind achieving its national financial inclusion strategy, closing the gender gap, we saw this move to digital really open up a huge opportunity for e-commerce for women. So, you’ve seen lots of traditional home-based micro businesses. If you think about it, those businesses lend themselves very well to an e-commerce. So, a woman can still do that home-based business essentially, but reach a much broader population. Particularly if she can get the payments, both payments to her suppliers as well as for items that she sold. If she can get that right through the platform. And we’ve seen a lot of that development in Indonesia as example.

We’re also doing some work in Mexico similarly on one of the largest e-commerce platform. Just seeing more and more women entrepreneurs coming onto that platform and how can that actually broaden be a source of broadening their financial inclusion. So, we’ve seen that. At the same time after this big ramp up, as I was saying before in smartphone ownership and access to the technology that then is the gateway to financial services increasingly, we’ve seen a real slowdown. And where we went, we’re just seeing a slowdown in the growth in ownership, the gap widening again. So, that’s a little bit of a mixed picture. Yeah.

Jennifer Tescher:
So, you started to share a little bit about some of the places in which Women’s World Banking does its work. I didn’t realize the organization turns 45 this year. We’re turning 20. So, we’re pretty excited about that. But 45, that’s an incredible legacy. Tell our listeners a little bit about the history of the organization and how you do your work.

Mary Ellen Iskenderian:
It’s a beautiful history in a lot of respects. I always think of the time that Women’s World Banking was conceived, if you will, was at the first UN conference on human rights for Women, which was in Mexico City in 1976. And it’s quite extraordinary that for women all coming from countries including the United States, that where a woman couldn’t have a credit card or a loan in her own name in 1976, our founding president, Michaela Walsh from the United States, Sihila Bhatt, our founding board chair, Esther Okhlu from Ghana, and Mary Okhlo from Kenya, were all there representing different organizations, met each other, and really came to this idea that human rights would never be fully achievable if women didn’t have economic rights as well. And so, over the course of the next three years, this vision of a global organization that stood for the right of all women to have access to the full range of financial services was born.

And that movement coincided the development of the microfinance movement. And so, the original vision morphed a bit into providing support to microfinance institutions that were founded by women. So, that was the original mission of the organization. I am the third president. And when I joined, just stunning that it was as long ago as it was when I joined in 2006, we were very much still a microfinance membership organization, if you will. We were now no longer limiting ourselves only to organizations that were founded by women. But our strategy was determined a lot by our members. And I think it was really the development of digital financial services. And PESA came to market within months of my joining. There’s no causality there, but those two things happen very much at the same time. Exploding the possibilities for partnerships for companies that could see the low income woman customer as a really viable consumer and business segment to pursue.

And so, limiting ourselves to microfinance institutions really didn’t make sense if our ultimate goal was reaching more women. And so, today, we work across three big pillars. One is still that very traditional business of providing product, marketing, sales, training, everything that a financial service provider might need to serve women customers. And today, fully a third of our 74 member network are fintechs, for example. So, we work with mainstream banks, insurance companies.

Jennifer Tescher:
Oh, I didn’t realize that. That’s interesting.

Mary Ellen Iskenderian:
And still microfinance institutions. But in truth, the microfinance industry has been slow to adopt digitization. And we are such strong believers in that as a mechanism for inclusion that we’ve really widened the institutions that we serve. The second pillar has been a much more active policy advocacy role both in country and on a global stage. Women’s World Banking is the only NGO that participates actively in the financial inclusion workstream of the G20, for example. So, [inaudible 00:11:50] were just down in Brasilia this past weekend.

And that’s been very exciting to make sure that women’s financial inclusion stays on an agenda that can get battered each way every year that the presidency changes. We also have a leadership and diversity for regulators program because you think diversity is lacking in the financial institutions themselves. The regulators globally are even less diverse. And so, we’re very excited about supporting women’s leadership and regulatory bodies as a means of driving more inclusive regulation. And then our third pillar, which is the one that I am perhaps maybe overly proud of, but I’m very proud of since it was a change in the organization that I drove, was our impact investing business. So, we currently have two funds, $150 million plus under management, where we invest directly in inclusive finance organizations, on the thesis that providing more financial services through more gender diverse organizations is a really good business proposition for a financial service provider to adopt.

Jennifer Tescher:
Can you give us an example or two of some investments that you’ve made that you’re particularly excited about?

Mary Ellen Iskenderian:
Yeah. Again, you’re not supposed to play favorites with your children. Our first investment from the second fund is an affordable housing finance company in India that requires that the woman’s name be on the property title to the property that’s being financed. And so, in one go, you are providing a tool of empowerment. She owns an asset. It’s potentially an asset that she could use as collateral if she has a business and wants to finance that. There’s some fascinating research correlation around intimate partner violence and woman’s name on property title. The husband has to deal with her if they split up and she has a legal right to be taken seriously. So, I love that company model. They’re doing phenomenally well. And they’ve been really committed not only to the asset ownership piece for their clients, but in making sure that they’re doing this through a really gender diverse organization.

One of the other companies that also happens to be in India, but we are investing throughout Sub-Saharan Africa and Southeast Asia as well, is a company that has, as it’s a vehicle sale and leasing company, mostly two-wheeler vehicles. But it has a really strong dedicated women’s outreach because they’ve recognized how important mobility, particularly in rural areas, is to women’s empowerment and women’s ability to tap into employment opportunities. And we’ve just recently seen that there’s an appreciable, like two times, 2x difference between women’s take-up of EVs, electric vehicles, and men’s. And we thought it might be because they’re lighter and easier to maneuver. It seems like that’s amongst the reasons, but they are really, really concerned about environmental aspects and really see the cleaner vehicle as the choice they [inaudible 00:15:47].

Jennifer Tescher:
Fascinating.

Mary Ellen Iskenderian:
… Make. Yeah.

Jennifer Tescher:
How will you improve financial health this year? Join hundreds of leaders to reflect, rethink, and rewire the future of financial health at Emerge 2024. Our special twenty-year celebration is happening June 5th to the 7th in Chicago. Learn more and get your ticket at finhealthnetwork.org/emerge.

I want to pick up on something you said a few minutes ago about technology. We’ve talked a lot about technology already in this conversation, more than I had thought we would. But it makes sense, of course. And you were talking about how some of the microfinance organizations have been slower to adopt. I can think of a lot of reasons for that. But I’m curious about the issues around tech versus touch, issues of trust, issues of competency, literacy. So, I know that you’re very pro-tech, and we generally have been as well. But help us see the other side of that argument and why you ultimately think technology is the right thing.

Mary Ellen Iskenderian:
I am so glad you brought that up, Jen, and feel a little remiss in not having brought out myself, the high-tech, high touch and the balance between those two things. Fundamentally, certainly any product rollout that we engaged with, a lot of the policy work that we engage with has to have a digital and financial capabilities element to it. Because if a woman is not comfortable and confident using that technology, let alone having the access, they’ve got to get the access. But then once they do, they’re more comfortable, they’re not going to use it and they’re not going to use the full capacity. And frankly, if there isn’t good consumer protection put in place can really be even more vulnerable to predatory practices if they’re not comfortable with the technology. So, that is absolutely fundamental.

But I think the point you were asking about with making the issues of trust, making sure that the organization, that is the financial service provider, has a human face despite the technology is something that we’re actually quite exciting about and have, to our surprise, a major line of business of ours has been developing women agents for any financial service provider business, any businesses that range from the actual provision of financial services to solar power, solar panels, and the repair of those. Women agents are really, really powerful. We’re seeing some really important commercial distinctions. We have evidence that for both men and women, that they are more comfortable asking women the technological questions. A woman agent. I didn’t know men operated this way, but we’ve had men say to us, “Oh, well, I’d rather ask the ‘stupid question’ of a woman than let another man know that I don’t know the answer to how to use the technology.”

Jennifer Tescher:
Interesting.

Mary Ellen Iskenderian:
So, we’ve seen women have higher rates of account signup in digital accounts. Higher rates of conversion from signup to actual depositing and usage of the account. If there’s a loan product involved, that there are repayment rates of loans made by women agents, for both men and women are higher. And women are really good at cross-selling other products. Which speaks to that issue of trust that you were just mentioning. So, we’re very big believers in that, the tech and the touch, but we’re also very excited that we’re seeing such an important gender difference, and frankly, a real livelihood opportunity for women. I’d say one of our biggest policy successes was the Indian government had identified women in the financial sector as an increasing number of women in the financial sector as employees was one of their goals, they had identified 20% as their target for 2030. But once they had heard about the success that we were having in some of the public sector banks and very rural areas with women agents in India, they bumped that target at our recommendation to 30%. So, we’re really excited about that opportunity.

Jennifer Tescher:
That’s great. So, Mary Ellen, you wrote a book a couple of years ago. And I’m excited to talk about it because it really focuses on this issue of the microloan and its role in broader financial inclusion. I think about when you became the head of Women’s World Banking, you mentioned earlier the third president, I think you said it was 2006. That was a really interesting time that the iPhone was invented in 2007, was introduced in 2007. Technology was changing a lot. But there was also a lot of research coming out, questioning whether microloans were actually making any difference in people’s lives. And your book is called, There’s Nothing Micro About a Billion Women. I absolutely love that title. And in the book, you make the case that microloans aren’t sufficient. So, tell us more about that argument.

Mary Ellen Iskenderian:
Well, thank you very much for mentioning my labor of love. But no, I saw very early on, in fact, I joined the organization in September, 2006. Mohammed Yunus was awarded the Nobel Peace Prize in October, 2006. It was the heyday a of microfinance, and I guess anything that has that much of a spotlight shown on it is going to get people questioning, is it too good to be true?

And what I just saw so very early in my tenure is that women were actually much more likely to come to a formal financial institution, whether it be a bank or a microfinance institution, as seeking a safe, confidential place to save. More so than they were a place to borrow. And would say things like, “Well, I can only get a place to save my money if I borrow.” And one of my earliest trips, I remember being at a branch of wonderful microfinance organization in Pakistan. And the woman said, “Well, I actually have to have two accounts because my husband knows about the loan, and he knows that there’s an account that the loan gets deposited into, and that I have to keep money a balance in there. But I want to be able to save somewhere he doesn’t know about. So, I need a second because of that desire for confidentiality.” And I just kept hearing so often the need to save.

I have an enormous respect for the informal savings groups models that are so popular, and that are a source of savings and community social capital in so many developing countries. And in fact, we believe really strongly at Women’s World Banking that if you can take a practice, a behavior, a model that’s working well in the informal sector and adapt it, you’re going to get buy-in so much more easily than if you’re introducing some completely new product or prototype.

But in any case, we would hear so often from women that the month that they won the pot or that the group savings came back to them, within hours of the group meeting, every family member, every village member was coming to them for a loan. And so, the desire to be able to really save towards your goal in a way that was only known to you and that you had that level of control that a formal financial institution gave you, was really powerful. But we still see a very low percentage of microfinance institutions even still being able to offer savings and an even lower percentage of them offering insurance. Because that insurance in the 2006 era, was about health costs could be the single thing that would just drag a family right back down.

One of the founders of SEWA Bank always talks about poverty being about chutes and ladders, and could just drive right back down. The chute was an unexpected illness or an emergency where everything that you’d saved went to pay for that. But today, we’re just seeing insurance having such an important role in climate resilience as the clients that we’re serving, being right on the front lines of natural disasters and climate shocks. Having access to a much broader range of services besides a small loan, was so evident in the people’s lives that I was encountering that I just felt I needed to be a little evangelical about going beyond just the microloan.

Jennifer Tescher:
So, given the need and the benefit, why is it that there are still some microfinance organizations that are unable, or maybe it’s unwilling, I don’t know, to offer a broader array of products and services?

Mary Ellen Iskenderian:
I think we’re getting there. I think we’re slowly getting there. Microfinance took a big hit during COVID. If the organization didn’t have any digital means of paying attention to the customer. Even if all they were doing was a digital deposit into an account of a loan, some touch point with their customer was absolutely essential. And if all they were doing was the high touch model or the in-person group model, those organizations really, really suffered. So, I think the case for offering a broader range of services, making the step to become a digital first, or at least a digital inclusive organization, was made by the pandemic situation. But it’s hard. It requires a really complete rethink of the way you do your core banking model, the way you run your company. Some of the things that you alluded to earlier about building trust are different in a digital model than when you’ve got that face-to-face in-person contact. But I think frankly for finance institutions really run the risk of being left with the least credit worthy, the least attractive, if you will, customers if they don’t move into this new space.

Jennifer Tescher:
Interesting. So, you had brought us to climate change, to the climate crisis in talking about insurance. And that’s exactly where I wanted to go. In an article you wrote recently, you talked about the idea that gender equality is the most urgent climate action of all. Talk to us about that idea. I thought that was really profound. Say more.

Mary Ellen Iskenderian:
I think it’s a combination of many of the things we’ve been talking about here today in that the population that is, unfortunately, on the front line that is so vulnerable to the way climate is playing itself out in the emerging economies, are women. And when you say women, they are the people who are the protector of the children. Today, there are a 100 million displaced people around the world. That number will only increase with increased climate shocks and further conflict. So, just basic financial services. Being able to get a remittance payment if your spouse has gone off to find work because your land is no longer farmable, the wife stays home, she’s got to be able to receive that payment ideally, digitally. If she’s got a business, she needs to be able to borrow to climate proof it, to have access to adaptive and resilience building technology.
We’re doing some work with seeing what kind of risk mitigation we can provide to banks so that they’re more willing to lend solar irrigation pumps, solar driven technology to more rural women. As I was mentioning before, insurance, you’re seeing an increasing number of crop and agricultural insurance products available. How do we deliver them at an affordable price in a way that the woman smallholder farmer understands? So, I think to me, the urgency of financial inclusion has only grown and it’s no longer just about inclusion. It’s about being able to operate in this world that we’re all living in. The assumption of financial services is even more important than it was when I first got into this racket.

Jennifer Tescher:
So, you got into this racket quite a while ago. Your entire career has been focused on global finance. And at least the last 18 years, if not more, have been focused on women. How did you get there? Why women?

Mary Ellen Iskenderian:
Well, I think I was at the IFC, which is the private sector arm of the World Bank. I seem to stay very long periods of time at places because I was at the World Bank for 18 years as well, and worked primarily in the financial sector there. So, I got to see, and even within that was very much a lot of my career had been in the former Soviet Union and Eastern European countries just after the fall of the Berlin Wall. So, I got a really good look at what the introduction of financial services that really met people’s needs, what that could mean to people’s lives in economies where the bank was the last place you’d go to solve a problem. Really seeing the change in that attitude.

But I feel like I am a good Catholic girl. I’m going to be paying my penance for the rest of my life. Never once did I ever ask a financial institution in those countries, or I worked in Latin America, I worked in South Asia. How many women customers do you have? Do you see in the products or the way women use products than men? Are they better repayers? Worse repayers? It never even crossed my mind to ask those questions. And so, I always am so grateful to the board of Women’s World Banking for having seen something in me because I really had not made that gender difference.

But it was literally my first trip for Women’s World Banking, you see so clearly that it’s women who are doing the hard work of development. When women have control over the way households, finances are spent everywhere around the world. They spend it on children’s education, the whole family’s health, improving the housing stock where they physically live. Everybody eats more nutritionally. And it is such stark contrast to the way men spend money and the things that men spend money on when they are in control of those resources. And so, having seen it once, you can’t unring that bell. You can’t unsee that very stark difference in the way women act when they have access to capital. There’s no looking back. And so, we still see such disparities in women’s access, women’s control that this just feels like a life’s work that I’m really proud to devote myself to.

Jennifer Tescher:
I think that is a great place to end our conversation. Mary Ellen Iskenderian, thank you so much for joining me and Emerge everywhere.

Mary Ellen Iskenderian:
Oh, thank you, Jennifer. This has been a wonderful conversation.

Jennifer Tescher:
The financial health movement will only be successful if everyone comes to the table. Emerge Everywhere is proud to be supported by US Bank, a longtime champion on this journey. Thanks for tuning in to Emerge Everywhere, powered by the Financial Health Network. Visit our website to get the latest financial health insights and resources and join the growing movement at Finhealthnetwork.org.