Towards the financial empowerment of Dominican women
Carolina Cárdenas, IFC Resident Representative for the Dominican Republic.
Santo Domingo, DR
It has been proven that improving women’s access to credit promotes their economic empowerment and translates into savings and investment for their households, a fundamental equation for accelerating a country’s economic reactivation.
But women’s financial inclusion in the Dominican Republic still presents significant challenges. Currently, only 4.7% of registered MSMEs in the country are led by women. Overall, it is estimated that there is a credit gap for women of approximately 1.2 million dollars. Most of this corresponds to access to commercial credit: for every RD$100 owed by a man for commercial purposes, a woman had an honor of less than RD$36 at the end of 2020.
Despite all this, the country has experienced progress in access to other types of loans. Since 2013, the female consumer credit portfolio grew by nearly three percentage points to December 2020 (from 43% to 45.7%), according to the Superintendency of Banks. Mortgage loans, on the other hand, and according to the same source, show a reduction in the gender gap between 2013-2020 of 4.6 percentage points in favor of women, standing today at 49.9%.
A study by IFC and Banco BHD León revealed that one of the main barriers to the increase in credit is that financial institutions are unaware of the needs and behaviors of this market segment and therefore have limited capacity to devise channels and products that are adapted to them.
For women, their relationship with a financial institution must go beyond a disbursement; non-financial services play a decisive role: the institution that can provide tools to help them grow and develop as entrepreneurs have a greater chance of becoming more attractive offer and a long-term ally. To respond to this need, financial institutions, including banks and microfinance institutions, have to overcome some operational and regulatory challenges and adopt innovative strategies and solutions based on best practices around the world.
This evolution occurs in a global marketplace where women play an increasingly prominent role in business. An IFC report indicates that between 2012 and 2019, women in Latin America increased their participation in the economically active population (EAP) by 22%, compared to 8% for men. This trend is expected to continue over time. Therefore, facilitating access to financial services for women benefits the financial industry, generates more employment, and drives economic growth in the Dominican Republic and the region.