Financial inclusion: how do gender biases affect women?

In 2021, 60% of businesses created in Peru were led by women, according to the Lima Chamber of Commerce. In the search for economic independence and better opportunities in a labor market hit by the pandemic, more women have been encouraged to start their own companies.

However, in Peru there are gaps in the level of financial inclusion achieved between women and mensince while 19% of men reach a successful level of inclusion, only 12% of Peruvian women reach this level, according to the report Credicorp Financial Inclusion Index 2021.

The report also reveals that of the group of working women, housewives show disappointing results, since only 15% have credit products in the formal system; on the other hand, the group of dependent workers (48%) and independent workers (35%) report the highest levels.

In the process of creating a business, and taking into account this scenario, In addition to the idea of ​​what one wants to develop, it is necessary to have the necessary budget to start the company. Given this, one of the options that people resort to is to obtain a bank loan. At that point, women face biases that can limit their access to the money they need.

What are the gender biases in the financial sector?

When talking about gender bias, reference is made to the predisposition or subjectivity when making decisions about a person, which can generate discrimination. Recent studies show that despite the fact that credit analyzes are standardized, they can be biased by the people who carry out these analyzes, explains Karina Azar, consultant to the Inter-American Development Bank (IDB).

And although there are many types of bias, the IDB has identified three: the performance bias, which is when the capacity of women is undervalued and that of men is overvalued. This is linked to business stereotypes: women then have to prove that they are more talented, more experienced and more profitable.

Another of the strongest biases is motherhood, since it is considered that women who are mothers are less committed to their work and the errors they may commit are more emphasized. It is linked to the stereotype that they are less time dedicated to the business and more focused on the family.

Finally, the affinity bias, which refers to people feeling more comfortable with people like you. Many times the mentors in the financial sector are men because they have more experience and this creates a vicious circle in which, not having more women as a reference, makes them see themselves as more difficult and complex people to deal with.

An example of this is the construction sector. The 30% of construction-oriented career students are women, according to a report by the National Training Service for the Construction Industry (Sencico). In this area where women make their way, Rosario Torpoco Viladegut, a member of the board of directors of Cerámicos Peruanos SA, tells us about some of the difficulties that she has identified when applying for loans to start construction projects.

“A large part of the obstacles to access credit for this type of project are due to the differences in income level or employability that women have compared to men in the country. Access to jobs with stable salaries that allow entering the financial system is not easy, especially for women in areas with lower levels of development”, says Torpoco.

What can companies in the financial sector do to change this reality?

The data reveals that there are three reasons why women who do not apply for loans: because they do not need it, because they cannot find an offer that suits their needs, and because they anticipate rejection. It is very important that companies can access this type of information, in order to know what is behind it in order to take concrete actions to ensure that more women can have financial records, says the IDB.

Some of the recommendations for financial companies provided by the IDB are that of change practices and procedures. Products with a gender focus can be perfected and credit application evaluation scores can be standardized.

In addition, it can carry out testimonial campaigns of female clients with successful businesseswhich can help change preconceptions about citizen-led businesses.

For her part, Rosario Torpoco points out that from her experience, “it is necessary to improve the financial culture at the country level. The possibility of accessing credit increases when there is job stability and an increase in income, and this can only be achieved with more and better opportunities for Peruvian women”.